🧾Module 6: Understanding TDS, Form 26AS & AIS
🧩 Introduction
As a beginner navigating the Indian tax system, you’ll often hear terms like TDS, Form 26AS, and AIS. These tools are crucial in ensuring that the right amount of tax is deducted, tracked, and credited to your PAN. In this blog, we’ll simplify these terms and explain how they affect your income tax filing process.
🔍 What is TDS (Tax Deducted at Source)?
TDS stands for Tax Deducted at Source. It is a mechanism where the tax is deducted by the payer before making certain payments like salary, rent, interest, commission, etc.
✅ Common Scenarios Where TDS is Deducted:
- Salary by your employer (Section 192)
- Bank interest (Section 194A)
- Rent payments (Section 194I)
- Professional fees (Section 194J)
- Sale/purchase of property (Section 194IA)
💡 Example:
If you earn ₹10,000 interest from a fixed deposit and the bank deducts ₹1,000 as TDS at 10%, you will receive ₹9,000, and ₹1,000 will be credited to your PAN with the Income Tax Department.
🧾 What is Form 26AS?
Form 26AS is your tax passbook. It is a consolidated annual tax statement that shows:
- TDS deducted and deposited
- Advance Tax or Self-Assessment Tax paid
- Refunds issued by the Income Tax Department
- High-value transactions (as reported by banks, mutual funds, etc.)
🔐 Where to Access It?
- Visit https://www.incometax.gov.in
- Login → e-file → Income Tax Returns → View Form 26AS
📊 Why It’s Important:
Before filing your return, you should always compare the TDS shown in your Form 26AS with what you’ve actually received. Any mismatch can lead to tax notices or refund delays.
📋 What is AIS (Annual Information Statement)?
AIS is a newer, more detailed version of Form 26AS. Introduced by the Income Tax Department, AIS provides:
- TDS/TCS details
- SFT (Specified Financial Transactions)
- Interest, dividend, and mutual fund income
- GST data (if applicable)
- Foreign remittances
🆕 Key Difference from Form 26AS:
AIS shows both reported and derived value. If you find incorrect data, you can give feedback directly in the AIS portal.
🗂️ How to Download:
- Login to incometax.gov.in
- Go to “Services” → AIS
- Download PDF or JSON version
🧠 Why These Three Tools Matter
| Tool | Purpose | Benefit |
|---|---|---|
| TDS | Ensures timely tax deduction | Avoids lump sum tax at year-end |
| Form 26AS | Summary of taxes paid/deducted | Helps during tax filing |
| AIS | Full income + transaction record | Ensures transparency and accuracy |
🧭 Tips for Beginners
- Always check your Form 26AS before filing ITR.
- Match income and TDS amounts from Form 16/Form 16A with Form 26AS.
- Use AIS to track other incomes like interest/dividends.
- Raise corrections if any mismatch is found.
- Link PAN with your bank account for smooth refunds.
🧮 Real-Life Scenario
Let’s say Neha is a freelancer who earned ₹5,00,000 during the year. Her clients deducted TDS of ₹50,000. She checked Form 26AS, saw only ₹40,000 credited, and raised the issue with her client. After correction, the missing ₹10,000 reflected in her AIS. This helped her claim the full refund during ITR filing.
🎯 Conclusion
TDS, Form 26AS, and AIS are essential tools in the income tax ecosystem. Understanding them will help you stay compliant, avoid penalties, and ensure you never miss out on claiming your rightful refunds.
