As Indian authorities expand financial transparency, investors are advised to verify their data against official records like AIS and Form 26AS before submitting their income tax returns to avoid delays and penalties.
Before filing an income tax return, Indian investors should assume that much of their financial activity is already visible to the tax department. Banks report high-value cash deposits, brokers report trades, mutual fund houses report redemptions and dividend payouts, and property registrars share stamp duty-related data. That is why the first task is not gathering new records, but checking whether your own numbers match what the system already has.
The Income Tax Department’s Annual Information Statement, or AIS, is the broadest place to start. According to the department’s own guidance, it brings together tax deducted at source, tax collected at source, specified financial transactions and tax payments, and it is designed to help taxpayers pre-fill returns and improve voluntary compliance. Form 26AS is narrower, but still essential: it works as a tax credit statement showing TDS, TCS, advance tax, self-assessment tax and refunds. Taxpayer Information Summary, or TIS, then compresses the AIS into a simpler view of income categories such as salary, interest and dividends.
For investors, capital gains are where errors most often surface. The broker’s capital gains statement should be checked against the AIS line by line, because even a small mismatch can draw attention or delay a refund. Only actual sales made during the financial year belong in the return; unrealised gains are not taxable. Equity long-term capital gains within the Section 112A framework may qualify for the ₹1.25 lakh exemption, while debt funds bought after 1 April 2023 are taxed at slab rates under Section 50AA. Dividend income and interest should be reported in Schedule OS, with the gross dividend amount shown and tax deducted at source claimed as credit.
The choice of return form matters just as much. ITR-1 is not available if there are any capital gains, even when the gain falls below the exemption threshold. ITR-2 is the usual form for individuals with salary, pension or other income alongside capital gains, provided there is no business income. ITR-3 is meant for those with business or professional income as well, including people active in futures and options or intraday trading. For assessment year 2026-27, the due date for ITR-2 was 31 July 2026, while ITR-3 without audit is due on 31 August 2026.
Disclaimer: This article is intended to inform and educate, not to recommend or endorse any financial product, investment or strategy. Please consider your own financial circumstances and seek professional advice where appropriate before making financial decisions.
