Think your AIS is accurate? Tax pro spots Rs 1.9 lakh income duplication in real case

A recent experience shared by Rahul Jain, Managing Partner at Sanjay Misra & Co., highlights the risks of trusting the Annual Information Statement (AIS) without cross-verification. While reviewing a client’s Income Tax Return (ITR), Jain encountered a discrepancy that could have led to inflated income being reported, resulting in higher taxes or even penalties.

The AIS had listed interest income of Rs 4,10,000 for the client. It showed Rs 2,00,000 from the Office of the Post Master, Dehradun (which also appeared in Form 26AS), and another Rs 2,10,000 reported from CRPC, Chennai. At first glance, these looked like two separate sources, but the mismatch prompted Jain to investigate further. Upon obtaining an Interest Certificate from the Post Office, it became clear that the actual income was only Rs 2,20,000.

The same income had been reported twice—once under the Post Office and again under CRPC, likely due to internal data routing or duplication in the reporting mechanism. Had this error gone unnoticed, the client would have over-reported income by Rs 1.9 lakh, potentially leading to unnecessary tax liability.

Key lesson? Don’t take AIS entries at face value. Always cross-check high-value figures—especially interest income, stock sales, and dividend earnings—with original documents like bank statements, Form 16A, or interest certificates. Even professionals can be misled if they depend solely on AIS.

The Income Tax Department itself has stressed the importance of verifying AIS data before filing ITR. In FY 2024–25, the department identified over 68,000 cases where the AIS and ITR did not match. These mismatches are now flagged quickly, as the department increasingly relies on pre-filled data and financial tracking to monitor compliance.

Errors in AIS can lead to several issues: refund delays, notices, tax scrutiny, and steep penalties. Under-reporting or misreporting income can attract penalties up to ₹5 lakh, with daily fines between ₹10,000 and ₹15,000 for continued non-compliance.

AIS is designed to make tax filing more transparent by showing income from multiple sources—salary, interest, dividends, property rent, stock trades, and more. But it’s not infallible. Duplications, incorrect tagging, or outdated entries are common.

How to fix AIS errors?
If you spot an inconsistency, log in to the income-tax e-filing portal, navigate to AIS, and check the transaction details under Part B. You can click on the relevant entry and use the ‘Optional’ tab to submit feedback. Once accepted, the Taxpayer Information Summary (TIS) updates automatically. You’ll also receive an acknowledgement for records.

Ultimately, AIS is a useful tool—but not a perfect one. Use it as a guide, not gospel. Cross-verification is your best defence against incorrect filings and avoidable tax trouble.