1. What is the new statement introduced by the Income Tax Department that provides comprehensive information about financial transactions?
The Income Tax Department has introduced a new statement called the Annual Information Statement (AIS), which provides detailed information about financial transactions.
2. How can a taxpayer obtain the Annual Information Statement (AIS)?
Taxpayers can download the AIS in PDF, JSON, or CSV formats from the Income Tax Department’s website.
3. Can a taxpayer report incorrect information in the AIS?
If a taxpayer finds any errors, duplicate entries, or information pertaining to another person or year in the AIS, they can provide online feedback to rectify the issue.
4. What are the top transactions that need to be reported in the AIS?
The top transactions to be reported in the AIS are as follows:
- Salary: Detailed breakup of salary, perquisites, profits in lieu of salary, etc.
- Rent Received: Details of rent paid, date of payment, and tax deduction made.
- Dividends: Dividends paid/declared by companies.
- Interest from savings bank: Interest paid/credited/accrued on a savings account.
- Interest from deposit: Interest paid/credited/accrued on deposits.
- Interest from others: Interest paid/credited/accrued on sources other than savings accounts and deposits.
- Interest from income tax refund: Interest received on income tax refunds.
- Rent on plant & machinery: Rent paid for the use of plant and machinery.
- Winnings from lottery or crossword puzzle: Winnings from lottery or crossword puzzle games.
- Winnings from horse race: Winnings from horse racing events.
5. How does the AIS help taxpayers in preparing their tax returns?
The AIS provides taxpayers with comprehensive financial information, making it easier to accurately report the correct information in their income tax returns.
6. How is salary information reported in the AIS?
Employers submit a detailed breakup of salary, perquisites, profits in lieu of salary, etc., which is then provided to the employee (taxpayer) in Form 16. This information is displayed in the AIS.
7. How is rent received and reported in the AIS?
Tenants responsible for paying rent deduct tax at source and report details of rent paid, date of payment, and tax deduction in Form 26Q. This information is also provided to the taxpayer in Form 16A.
8. How are dividends reported in the AIS?
Dividends disbursed/announced by corporations are recorded within the AIS as part of the Statement of Financial Transactions (SFT). The deductor furnishes Form 16A to the taxpayer, containing this particular information.
9. How is interest from various sources reported in the AIS?
Interest from savings bank accounts, deposits, and other sources is reported in the AIS under the Statement of Financial Transactions (SFT). The deductor provides this information to the taxpayer in Form 16A.
10. Are there any special tax rates for winnings from the lottery, crossword puzzles, or horse races?
Yes, there are special tax rates applicable to winnings from the lottery, crossword puzzles, and horse races. The payer deducts tax at the applicable rate and reports the information in Form 26Q, which is then provided to the taxpayer in Form 16A.
11. How is the receipt of the accumulated balance of PF from the employer reported in the AIS?
The employer or recognized provident fund reports the information about the accumulated balance due to an employee in Form 26Q. This information is reported on a quarterly basis and is subject to tax at a special rate. The deductor provides this information to the deductee (taxpayer) in Form 16A.
12. How is the interest from an infrastructure debt fund reported in the AIS?
The payer reports the information relating to interest paid in Form 27Q. This information is reported on a quarterly basis and is subject to tax at a special rate. The deductor provides this information to the deductee (taxpayer) in Form 16A.
13. How is the interest from a specified company by a non-resident reported in the AIS?
The payer reports the information relating to interest paid in Form 27Q. This information is reported on a quarterly basis and is subject to tax at a special rate. The deductor provides this information to the deductee (taxpayer) in Form 16A.
14. How is the interest on bonds and government securities reported in the AIS?
The payer reports the information relating to interest paid in Form 27Q. This information is reported on a quarterly basis and is subject to tax at a special rate. The deductor provides this information to the deductee (taxpayer) in Form 16A.
15. How is the income regarding units of a non-resident reported in the AIS?
The payer reports the information about the income in respect of units of a non-resident in Form 27Q. This information is reported on a quarterly basis and is subject to tax at a special rate. The deductor provides this information to the deductee (taxpayer) in Form 16A.
16. How are an offshore fund's income and long-term capital gain from units reported in the AIS?
The payer reports the income and long-term capital gain from units payable to an offshore fund in Form 27Q. This information is reported on a quarterly basis and is subject to tax at a special rate. The deductor provides the information regarding dividends to the deductee (taxpayer) through the issuance of Form 16A.
17. How are the income and long-term capital gains from foreign currency bonds of Indian companies reported in the AIS?
Form 27Q is used by the payer to report income and long-term capital gains derived from foreign currency bonds or shares of Indian companies. This reporting is done on a quarterly basis and is subject to taxation at a special rate. The deductor then furnishes this information to the deductee (taxpayer) through issuing Form 16A.
18. How is the income of foreign institutional investors from securities reported in the AIS?
The payer reports the information about the income of foreign institutional investors from securities in Form 27Q. This information is reported on a quarterly basis and is subject to tax at a special rate.Form 16A is utilized by the deductor to provide the deductee (taxpayer) with the information as mentioned earlier.
19. How is the insurance commission reported in the AIS?
The payer reports the information about the insurance commission received in Form 26Q on a quarterly basis. The deductor furnishes the deductee (taxpayer) with the mentioned information through the issuance of Form 16A.
20. How are the receipts from a life insurance policy reported in the AIS?
A life insurance policy receipt is generally exempt under section 10(10D) if specific conditions are met. However, if the conditions are unmet, the receipts become taxable, and tax is deducted under section 194DA. The payer reports this information in Form.
21. How is the withdrawal of deposits under the National Savings Scheme (NSS) reported in the AIS?
Withdrawals from the National Savings Scheme (NSS) are taxable, and tax is deducted on such withdrawals. The payer reports this information in Form 26Q on a quarterly basis. The information is conveyed to the deductee (taxpayer) by the deductor through the utilization of Form 16A.
22. How is the receipt of commission on the sale of lottery tickets reported in the AIS?
Commission earned on the lottery business is subject to tax deduction under section 194G. The payer reports this information in Form 26Q on a quarterly basis. The deductor transmits this information to the deductee (taxpayer) by means of Form 16A.
23. How is the income from investment in a securitization trust reported in the AIS?
Income earned from investments made in a securitization trust is subject to the tax deduction. The payer reports this information in Form 27Q on a quarterly basis. The deductor transmits this information to the deductee (taxpayer) by means of Form 16A
24. How is the income on account of the repurchase of units by a mutual fund or UTI reported in the AIS?
Receipt of income on account of the repurchase of units by a mutual fund or UTI is subject to tax deduction under section 194F. The payer reports this information in Form 26Q on a quarterly basis. The deductor transmits this information to the deductee (taxpayer) by means of Form 16A.
25. How are interest, dividends, or other sums payable to the government reported in the AIS?
Income from interest, dividends, or other sums payable to the government is not subject to tax deduction. The payer reports this information in Form 26Q on a quarterly basis. The deductor transmits this information to the deductee (taxpayer) by means of Form 16A.
26. How is the payment to non-resident sportsmen or sports associations reported in the AIS?
The deductor reports the details pertaining to the remuneration paid to non-resident sportsmen or sports associations using Form 27Q. Subsequently, the deductor supplies this information to the deductee (taxpayer) through Form 16A.
27. How is the sale of land or building reported in the AIS?
The transfer of immovable property and its corresponding sales consideration are recorded within the Statement of Financial Transactions (SFT).This information will be shown in the Annual Information Statement (AIS) of all sellers to enable feedback submission. Additionally, the sale of immovable property is reported in Form 61 when the transacting party does not furnish PAN. PAN is populated based on the Aadhaar and other attributes of the person. Information related to receipts under specified agreements is reported by the person making payment for the specified agreement. The deductor transmits this information to the deductee (taxpayer) by means of Form 16A
28. How are receipts from the transfer of immovable property reported in the AIS?
The buyer of the property reports information related to receipts from the transfer of immovable property in Form 26QB. The deductor provides this information to the deductee (taxpayer) in Form 16B.
29. How is the sale of a vehicle reported in the AIS?
The sale of a motor vehicle is reported in Form 61 when the transacting party does not furnish PAN. The Permanent Account Number (PAN) is generated by populating the necessary information from Aadhaar and other relevant attributes of the individual.
30. How is the sale of securities and units of mutual funds reported in the AIS?
When reporting depository transactions in the Statement of Financial Transactions (SFT), the estimated sale consideration for debit transactions is determined using the best available asset price from the depository, such as the end-of-day price. However, it is important to note that taxpayers have the flexibility to modify the sales consideration and other relevant information before filing their tax returns.
31. How are off-market debit transactions reported in the AIS?
In the Statement of Financial Transactions (SFT) reporting of depository transactions, the depository reports details of off-market debit transactions. The value of the transaction is computed based on the end-of-day price of the security. If the consideration is available, it is also shown.
32. How are off-market credit transactions reported in the AIS?
During the reporting of depository transactions in the Statement of Financial Transactions (SFT), the depository provides information regarding off-market credit transactions. The value of such transactions is calculated using the end-of-day price.
33. How are business receipts reported in the AIS?
The contractee reports Information on the amount paid to a contractor in Form 26Q. Similarly, information regarding the amount paid to a service provider is reported by the recipient of services in Form 26Q. The deductor also provides this information to the deductee (taxpayer) in Form 16A.
34. How are business expenses reported in the AIS?
The tax collector reports details related to the acquisition of alcoholic liquor through the submission of TCS Form 27EQ on a quarterly basis. Subsequently, the tax collector provides the taxpayer with this information in the form of Form 27D.
35. How are rent payments reported in the AIS?
The person making the payment in Form 26QC reports information regarding rent payments. The deductor transmits this information to the deductee (taxpayer) by means of Form 16C.
36. How are miscellaneous payments reported in the AIS?
The person making the payment in Form 26QD reports information regarding miscellaneous payments. The deductor transmits this information to the deductee (taxpayer) by means of Form 16D. Additionally, the purchase of bank drafts or pay orders may be reported in Form 61 if the transacting party does not furnish PAN. PAN is populated using Aadhaar and other personal characteristics of the individual.
37. How are cash deposits reported in the AIS?
Information regarding cash deposits in an account other than a current account is reported by the reporting entity in Form 61A. This information will be shown in the Annual Information Statement (AIS) of all account holders to enable the feedback submission. Similarly, information regarding cash deposits in a current account is also reported by the reporting entity in Form 61A, which will be shown in the AIS of all account holders.
38. How are cash withdrawals reported in the AIS?
The reporting entity submits details about cash withdrawals from a current account in Form 61A, which will be visible in the Account Information System (AIS) for all account holders to facilitate feedback submission. In certain instances, cash withdrawals from non-current accounts are reported by the reporting entity in SFT-004, and this information is also displayed in the AIS for all account holders. Moreover, information regarding cash withdrawals is reported by the reporting entity through the TDS statement 26Q, which the deductor provides to the taxpayer in the form of Form 16A.
39. How are cash payments reported in the AIS?
Information pertaining to cash payments for goods and services is reported by the reporting entity in Form 61A. Furthermore, information pertaining to the purchase of bank drafts, pay orders, or banker’s cheques in cash is also reported by the reporting entity in Form 61A. Similarly, information regarding the purchase of prepaid instruments in cash is reported by the reporting entity in Form 61A.
40. How are outward foreign remittances and the purchase of foreign currency reported in the AIS?
Information regarding outward foreign remittances is reported by the authorized dealer in Form 15CC. Additionally, information about remittances under the Liberalized Remittance Scheme (LRS) for educational loans taken from financial institutions mentioned in Section 80E is reported by the authorized dealer through TCS Form 27EQ for specified foreign remittances made by the remitter’s PAN. The same applies to remittances under LRS for purposes other than purchasing an overseas tour package or educational loan from a financial institution, which the authorized dealer reports through TCS Form 27EQ for specified foreign remittances made by the remitter’s PAN.
41. How is the receipt of foreign remittances handled?
The deductor reports payments made to non-residents for royalty or technical services in Form 27Q. The deductor then provides this information to the deductee (taxpayer) in Form 16A. Authorized dealers report foreign remittances made by the remitter’s PAN in Form 15CC. Additionally, the authorized dealer reports the receipt of foreign remittance by the remittee in Form 15CC.
42. How is information regarding foreign travel reported?
The deductor reports information about foreign travel in the TCS Form 27EQ (quarterly statement). The collector then provides this information to the taxpayer in Form 16D. If the transacting party does not furnish the PAN, travel-related payments to any foreign country may be reported in Form 61. PAN is populated using Aadhaar and other personal characteristics of the individual.
43. How is the purchase of immovable property reported?
The Property Registrar reports information about the immovable property through SFT. This information is made available in the AIS of all buyers to facilitate feedback submission. When paying for the purchase of property, the buyer is responsible for deducting tax from the amount paid to the seller, depending on the applicable threshold. This information is reported in Form 26QB. Furthermore, the property seller reports the buyer’s details in the schedule CG of the ITR. If the transacting party does not furnish the PAN, the payment for purchasing immovable property may be reported in Form 61. PAN is populated using Aadhaar and other personal characteristics of the individual.
44. How is the purchase of a vehicle reported?
The deductor reports information about the purchase of a motor vehicle in the TCS Form 27EQ (quarterly statement). The collector then provides this information to the taxpayer in Form 16D. If the transacting party does not furnish the PAN, the payment for purchasing a motor vehicle may be reported in Form 61. PAN is populated using Aadhaar and other personal characteristics of the individual.
45. How is the purchase of time deposits reported?
The reporting entity, such as a bank, reports information regarding the purchase of time deposits in the Statement of Financial Transaction (SFT). Information regarding investment in time deposits is reported in Form 61 when the transacting party does not provide the PAN. PAN is populated using Aadhaar and other personal characteristics of the individual.
46. How is the purchase of securities and units of mutual funds reported?
The reporting entity includes information about the purchase of shares (including share application money) and units of mutual funds in the Statement of Financial Transaction (SFT). This information is reported by mutual fund companies and other reporting entities in the Statement of Financial Transaction (SFT).
47. How is information about credit/debit card applications handled?
Information regarding the application for issuing credit/debit cards is reported in Form 61 when the transacting party does not furnish the PAN. PAN is populated using Aadhaar and other personal characteristics of the individual.
48. How are the details of the account balance reported?
Details of bank accounts, excluding savings and time deposits, that were opened during the year are reported in Form 61. Bank accounts with a balance exceeding INR 50,000 at the end of the financial year are also reported in Form 61.
49. How is the income distributed by a business trust reported?
The payer reports information about income from units of business trust in Form 27Q. This information is reported on a quarterly basis and is subject to tax at a special rate.
50. How is the income distributed by an investment fund reported?
The deduct or reports information about the income distributed by an investment fund in Form 26Q quarterly.
As a result, it is important to be cautious while filing your next ITR and maintain proper records for the items mentioned above, as the Income Tax Department now possesses additional knowledge about you. The department may inquire about these transactions at any time.