Form 26AS, AIS and Your Books: A Reconciliation Before You File Your ITR

Before filing an income-tax return, compare your books with Form 26AS and the Annual Information Statement (AIS). The purpose is not to make all three totals look identical. It is to understand why they differ, verify what is taxable, and ensure that the correct tax credit is claimed in the correct year.

A difference can be routine. It can also point to an unrecorded receipt, an incorrect report by a deductor, a duplicate AIS entry or a TDS credit that needs further review. A document-level reconciliation separates these possibilities.

This article addresses returns for FY 2025-26 (AY 2026-27), which remain governed by the Income-tax Act, 1961 and the Income-tax Rules, 1962. From Tax Year 2026-27, the Income-tax Act, 2025 and the Income-tax Rules, 2026 apply, with renumbered provisions and forms. The reconciliation discipline is the same; the references will change.

Start by recognising the three different bases

The three records do not always measure income on the same basis.

Your books ordinarily record income according to the accounting method followed by the business. Form 26AS reflects tax deducted and reported by deductors. For professional fees under section 194J, deduction is generally linked to the time of credit or payment, whichever is earlier. AIS is broader: it reflects information reported by deductors, banks, financial institutions and other reporting entities, across several information categories.

This creates ordinary timing differences. A March invoice may appear in the books even though the client credits, pays and reports TDS in the next financial year. Equally, a payment received during the year may produce a Form 26AS entry for income the books recorded in an earlier year.

Do not force these records into one total without first identifying the basis and period of each entry.

Keep four records together

For the relevant financial year, keep:

• Ledger and income schedules from the books
• Form 26AS
• AIS and Taxpayer Information Summary (TIS)
• A reconciliation working sheet with source documents

At document level, the working sheet should capture:

• Client or reporting entity name and PAN, where available
• Invoice or receipt reference and date
• Taxable value and GST, if any
• Date of income recognition in the books
• Date of credit or payment
• TDS amount and Form 26AS reference
• AIS information category and reported value
• Difference reason, action owner and closure status

A fictional example: books to Form 26AS

Assume a consulting practice has professional income of ₹24,00,000 in its books for the year.

The net difference is ₹1,50,000. The three items behind it total ₹2,30,000 in absolute terms, and each calls for a different response.

The ₹1,20,000 is a timing difference: the income belongs to this year, and the TDS will appear in next year's Form 26AS. The ₹40,000 is the reverse — income already offered last year, with TDS appearing now. The ₹70,000 needs follow-up: a client who did not deduct, did not report, or reported late. If tax was deducted but does not appear in Form 26AS, obtain the deductor's confirmation and follow up for correction of the TDS statement.

None of these items, on its own, means income is missing from the return.

A separate reconciliation: Form 26AS to AIS

For professional fees, much of the AIS information comes from the same TDS statements that feed Form 26AS. Differences between AIS and the books therefore usually arise from other information categories, and are best reconciled starting from the TDS-reported figure.

AIS exceeds the books by a net ₹80,000. Only ₹25,000 of it is income to be offered — the savings bank interest that was never entered in the books. The ₹1,20,000 is a duplicate and the ₹85,000 belongs to another year. Treating the full ₹80,000 as additional income would overstate the return; ignoring it would miss the interest.

Reported values also need checking. Where GST is shown separately on a service invoice, CBDT Circular No. 23/2017 dated 19 July 2017 clarifies that TDS is generally deducted on the amount excluding GST. Information flowing into AIS from other reporting streams may use a different value. Separate the taxable value and GST component before treating any AIS difference as income.

Use AIS feedback where the information needs correction

AIS is not only a viewing statement. The portal provides a feedback facility against individual information entries.

After checking the underlying documents, submit feedback against an AIS item where appropriate. The available options can include:

• Information is correct
• Information is not fully correct
• Information relates to other PAN/year
• Information is duplicate
• Information is denied

In the example above, the ₹1,20,000 entry calls for duplicate feedback and the ₹85,000 entry for 'relates to other PAN/year.' Select the option that matches the facts, enter the corrected information or explanation where the portal requests it, and retain a copy of the submission with the supporting documents. Review the resulting status and its effect on TIS before finalising the return.

Feedback does not replace a correction by the reporting entity where one is required. If the issue is a TDS reporting error, follow up with the deductor as well.

Check the year in which TDS credit is claimed

Tax credit is not simply a cash-receipt exercise.

Rule 37BA provides that credit for TDS is to be given for the assessment year for which the related income is assessable. It also provides for credit to be given to another person where the income is assessable in that person's hands in specified circumstances.

The ₹40,000 row in the first table is exactly this situation: TDS appears in this year's Form 26AS, but the income was offered in the previous year. A credit should be matched to the year in which the related income is offered, subject to the applicable law and facts. Review the TDS entry, invoice date and payment date together, and do not claim or carry forward a credit merely because it appears in one statement.

A practical review sequence

• Confirm which Act and rules govern the year being filed.
• Freeze the income schedule from the books.
• Match Form 26AS entries to client-wise income and TDS records.
• Separate timing differences from clients that did not deduct or report.
• Identify Form 26AS credits that relate to income of another year.
• Review every AIS entry not already explained by the books or Form 26AS.
• Separate taxable value and GST where relevant.
• Submit AIS feedback for incorrect, duplicate or unrelated information.
• Follow up with deductors for TDS-statement corrections where needed.
• Review the year of assessability and TDS credit under Rule 37BA.
• Keep the reconciliation, feedback acknowledgements and source records with the return working papers.

A well-prepared reconciliation does more than reduce filing-time pressure. It gives the business a cleaner income trail, supports tax-credit claims and highlights client reporting issues before they become difficult to resolve.

Basis of this illustration

This is an original educational example using fictional data, not a client case study. The amounts illustrate reconciliation direction and process only. Income recognition, TDS credit, GST treatment, AIS feedback and return reporting must be reviewed against the current law, portal guidance and underlying documents.

Content reviewed on 21 September 2026.