AIS vs Form 26AS for Traders: What Each Shows and How to Reconcile Them
Note: This is general information, not tax advice, and tax rules change. Verify the current figures against the Income Tax Act, the relevant Finance Act and ICAI guidance, and confirm your own position with a qualified Chartered Accountant.
Form 26AS: the tax credit ledger
Form 26AS is a taxpayer's credit statement. It shows:
TDS deducted by employers, banks, or others on your income (salary, interest, dividends, professional fees). Each TDS entry shows the deductor's TAN, the amount deducted, and the income head.
Advance tax paid by you directly to the government, matched by challan.
Self-assessment tax paid at the time of filing.
TCS collected at source on certain purchases (LRS remittances, car purchases over thresholds, etc.).
For most F&O traders, Form 26AS primarily shows advance tax challans and any TDS on interest or dividends. F&O profits carry no TDS, so the trading activity itself does not appear in 26AS.
AIS: the full transaction picture
The Annual Information Statement replaced the old Form 26AS Part E for securities data. AIS is far more detailed. For traders it shows:
Securities transactions: every buy and sell reported by the exchange or broker to the Income Tax department, including the gross sale and purchase values, segregated by type (equity, mutual fund, derivatives).
Dividend income as reported by companies or mutual funds.
Interest income from banks, bonds, and post office deposits.
Salary as reported by the employer (TDS).
Other receipts including rent, professional fees, and GST turnover (if GST-registered).
Why the AIS figure always looks enormous
For securities transactions, AIS aggregates both sides of the trade: the total sale consideration from all disposals in the year. It does not net cost of acquisition.
If you actively trade F&O, every settlement is a "sale." A day with 10 contracts settled contributes 10 settlement values to the AIS total. The resulting AIS securities number is always a gross figure, not a profit figure.
The Income Tax system expects your ITR to account for this. Reconciliation is the process of explaining, to yourself first, why the AIS number differs from your ITR income.
How to reconcile AIS with your broker P&L
Step 1: Download the AIS from the Income Tax portal and export it as a PDF or JSON.
Step 2: Compare the AIS securities transaction total with your broker P&L statement. Look for the gross sale consideration column in your broker report, not the net P&L column.
Step 3: If amounts differ, identify the source. Common causes: a broker reported a transaction under a slightly different PAN mapping, a back-office correction was not reflected in AIS, or AIS captured a delivery trade that you treated as a corporate action (like a bonus or split).
Step 4: If the AIS data is wrong, use the feedback mechanism on the portal to mark the entry as incorrect and explain the discrepancy. AIS has a built-in feedback field for each line item.
Step 5: If you cannot resolve it before the filing deadline, file based on your actual broker data and add a disclosure note in the return. Read how to handle an AIS mismatch notice if you receive one after filing.
The three things to check in Form 26AS before filing
Advance tax credits: every challan you paid should appear here. If one is missing, find the BSR code and challan number and enter it manually in the ITR.
TDS from employers: the amount in 26AS should match your Form 16 Part A. Any discrepancy here means the employer has not deposited the TDS or mapped it to the wrong PAN. Raise it with HR or payroll before filing.
Bank interest TDS: banks deduct 10% TDS on FD interest above ₹40,000. Check that the figure matches your bank certificate.
What happens if you file without checking AIS
The Income Tax department's processing system (CPC) compares AIS data to your ITR after filing. If securities transaction values in AIS are significantly higher than what you declared, the system may issue a Section 143(1) adjustment notice or flag the return for scrutiny.
A 143(1) notice for an AIS discrepancy is usually resolvable by responding with the reconciliation. But it takes time and creates uncertainty. The better path is to reconcile before filing, not after.
Aktai Tax reconciles your broker P&L data against AIS patterns and flags likely discrepancy points before you file. Upload your broker files at Aktai Tax and use the report as your pre-filing reconciliation base.
Frequently asked questions
Why does my AIS show much higher numbers than my actual profit?
AIS shows the gross sale consideration from your securities transactions, not your profit. If you sold shares worth ₹50 lakh during the year but bought them for ₹48 lakh, your AIS shows ₹50 lakh in sale value, not the ₹2 lakh gain. Your ITR reports the net gain after cost, which is why the AIS figure is almost always much higher than your taxable income.
Do I need to reconcile AIS before filing ITR?
Yes. The Income Tax department compares your AIS data with your ITR filing. If material securities transactions in AIS are not reflected in your ITR, the system may issue an AIS mismatch notice under Section 143(1) or trigger scrutiny. Reconciling before filing prevents most of these issues.
Form 26AS shows TDS that was not deducted from me. What do I do?
This can happen when a broker incorrectly maps a transaction to your PAN. Raise a correction request with the deductor (broker or bank). If the deadline is close, disclose the discrepancy in your ITR and attach an explanation. Do not claim TDS credit for deductions that did not actually apply to you.
Where do I download AIS and Form 26AS?
Both are available on the Income Tax portal (incometax.gov.in). Log in, go to Annual Information Statement under the e-File or Services menu. Form 26AS is also accessible via the TRACES link on the same portal, but the AIS section is the more complete source for securities data.