ITR Filing 2026: Don't panic! These 8 AIS transactions are usually not taxable

ITR filing 2026: The Annual Information Statement (AIS) has become an essential document for taxpayers while filing their Income Tax Returns (ITRs). However, tax experts say many transactions appearing in the AIS are merely informational and do not automatically attract tax or result in an income tax notice.

As the deadline for filing Income Tax Returns (ITRs) approaches, taxpayers are increasingly relying on the Annual Information Statement (AIS) to verify their financial transactions. While the AIS provides a comprehensive record of transactions reported against a taxpayer's Permanent Account Number (PAN), experts caution that its entries should not be confused with taxable income.

"The Annual Information Statement (AIS) is a comprehensive financial information statement that captures various transactions reported against a taxpayer's PAN by banks, employers, financial institutions, registrars, and other reporting entities. However, the presence of a transaction in AIS does not automatically mean that it is taxable," said CA (Dr.) Suresh Surana.

According to him, the AIS primarily serves as "an information and reconciliation tool to help taxpayers accurately file their Income Tax Returns (ITR) and improve transparency in the tax system." The actual taxability of any transaction depends on the provisions of the Income-tax Act and the nature of the transaction.

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Which AIS transactions are generally not taxable?

Surana said several commonly reported financial transactions do not create an immediate tax liability.

Bank deposits and withdrawals: Cash deposits or withdrawals may appear in AIS under the Specified Financial Transactions (SFT) framework if they cross prescribed thresholds. However, these transactions are not taxable if they merely represent movement of the taxpayer's own money. Only income generated from such accounts, such as savings account interest, is taxable.

Opening or closing fixed deposits: Investing in a fixed deposit or receiving the principal amount on maturity is not taxable. Although time deposits above the reporting threshold may be reflected in AIS, only the interest earned is subject to tax.

Purchase of mutual funds: Buying mutual fund units is simply an investment. Tax liability arises only when the units are redeemed or sold, resulting in capital gains, or when taxable distributions are received.

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Purchase of shares and securities: Similarly, purchasing shares does not create a tax liability. Tax is applicable only when the securities are sold or transferred and capital gains are realised.

Purchase of immovable property: Buying a residential or commercial property may be reported in AIS if the transaction value meets the prescribed threshold. However, the purchase itself is generally not taxable for the buyer. Future rental income or capital gains on sale may attract tax.

Credit card bill payments: High-value credit card payments may also appear in AIS. However, these payments merely represent settlement of personal expenditure and do not constitute taxable income.

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Advance tax and self-assessment tax payments: These payments are reflected in AIS to facilitate tax credit reconciliation. Since they are taxes paid by the taxpayer, they are not taxable receipts.

AIS Transactions: Taxable vs not taxable

Transaction appearing in AIS	Taxable?	Why?
Cash deposits/withdrawals in bank accounts	No	Movement of your own funds is not taxable; only interest earned is taxable.
Opening a Fixed Deposit (FD)	No	Investing in an FD is not income; only the interest earned is taxable.
FD principal received on maturity	No	Return of capital is not taxable; only accrued interest is taxed.
Purchase of Mutual Funds	No	Buying MF units is an investment; tax arises only on redemption/sale if capital gains are made.
Purchase of Shares/Securities	No	Buying shares does not create tax liability; tax applies only when they are sold.
Purchase of Immovable Property	No	Buying property is not taxable for the purchaser; rental income or capital gains on sale may be taxable later.
Credit Card Bill Payments	No	Repayment of personal expenses is not income; reported only as a high-value transaction.
Advance Tax Payment	No	It is a tax paid by the taxpayer, not taxable income.
Self-Assessment Tax Payment	No	Reflected for tax credit reconciliation; not taxable.

AIS entries do not automatically trigger notices

Surana clarified that taxpayers should not assume an AIS entry means they will receive a tax notice.

"The appearance of a transaction in the Annual Information Statement (AIS) should be viewed as an information-reporting mechanism that helps taxpayers and the Income-tax Department reconcile financial transactions. Its inclusion in AIS does not, by itself, determine taxability," he said.

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However, he cautioned that "significant mismatches between AIS information and the income reported in the return, or unexplained high-value transactions, may warrant further verification by the tax authorities."

What actually creates a tax liability?

Transaction	Taxable?
Salary income	✅ Yes
Interest from FDs/Savings Account	✅ Yes
Dividend income	✅ Yes
Rental income	✅ Yes
Capital gains on sale of shares	✅ Yes
Capital gains on redemption of mutual funds	✅ Yes
Capital gains on sale of property	✅ Yes
Business or professional income	✅ Yes

Reconcile your AIS before filing ITR

Surana advised taxpayers to carefully compare the AIS with Form 16, Form 26AS, bank statements, interest certificates and capital gains statements before filing their return.

"If taxpayers come across duplicate entries, inaccurate information, or transactions that do not pertain to them, they should submit feedback through the AIS portal," he said.

He added that taxpayers should rely on reconciled financial records while filing their ITR. "The appearance of a transaction in AIS is only a starting point; the actual tax treatment must be determined based on the underlying facts of the transaction and the relevant provisions of the Income-tax Act," Surana said, adding that proper reconciliation can help avoid future notices, queries and compliance-related issues.

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