AIS Mismatch Notice for Traders: What It Means and How to Handle It
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.
What the AIS shows for F&O traders
The AIS aggregates data reported by your brokers under SFT (Statement of Financial Transactions). For equity and F&O traders, the AIS typically includes:
- Gross sale proceeds from equity shares (not gain, the full sale value)
- F&O transaction data (often gross buy plus sell values, not net P/L)
- Dividend income from shares and mutual funds
- TDS deducted by brokers and exchanges
- Interest income from savings and FDs
The key point: the F&O figure on AIS is usually not the turnover or net P/L. It may be the total contract value or gross transaction amount, which is many times larger. Do not try to match your ICAI turnover to the AIS F&O figure: they measure different things.
How to reconcile your AIS before filing
Step 1: Download your AIS from the income-tax portal (Services โ AIS). Step 2: Compare the income items against your actual income: salary slips, broker P&L, bank statements. Step 3: For any item that is incorrect, submit feedback via the AIS portal. Step 4: Report actual income on your ITR, not the AIS figure if it is wrong.
When a mismatch notice arrives
If you receive a notice asking why your ITR does not match your AIS, it is usually a 143(1) processing adjustment or a preliminary inquiry. Do not ignore it. Respond with:
- A clear explanation that AIS shows gross F&O transaction value, while ITR reports net realised P/L
- Your broker P&L statement (downloaded from Zerodha Console, Upstox, Dhan, etc.)
- Your Aktai Tax report or equivalent showing ICAI turnover and net P/L computation
- If applicable, your CA letter explaining the turnover methodology
The department generally accepts the ICAI absolute-sum method when it is properly documented. The more documentation you provide upfront, the faster the notice closes.
If you already filed and find a real error
If reconciliation reveals that you genuinely missed income on your ITR (say, dividend income or an equity sale not captured), file a revised return before December 31 of the assessment year. See belated and revised returns for traders. If the window is closed, the 143(1) process gives you a chance to respond. Proactive disclosure before a notice is always better than explaining after.
Frequently asked questions
What is the AIS?
The Annual Information Statement (AIS) is a comprehensive tax data repository maintained by the income-tax department. It aggregates information from banks, brokers, depositories, mutual funds and other reporting entities about transactions that may generate income. It includes F&O transaction data, equity sale proceeds, dividend income, interest, and more.
Why does my AIS show a different figure than my broker P&L?
The AIS typically shows gross transaction data: the total value of buy and sell transactions, not the net profit or loss. Your broker P&L shows realised profit or loss. These are fundamentally different numbers. A โน1 crore gross transaction value on AIS might correspond to a โน3 lakh net loss on your P&L. This difference is expected and not a mismatch to worry about as long as you report the correct net P&L on your ITR.
What should I do if I find an error in my AIS?
The portal lets you submit feedback on each AIS transaction. If a value is incorrect (wrong amount, duplicate entry, or a transaction that is not yours), use the Feedback option on the AIS portal to mark it as incorrect. The reporting entity is then asked to correct it. File your ITR using the correct figures and note the discrepancy in your records.
I already filed my ITR and then found an AIS mismatch. What now?
If the filing window is still open (usually December 31 of the assessment year), file a revised return with the corrected figures. If the window is closed, wait for the 143(1) intimation. If the department flags the mismatch, respond with a rectification under Section 154, attaching your broker P&L and an explanation of the difference.