If you have ever spotted a small dividend or a couple hundred rupees in interest in your annual information statement (AIS), chances are you debated whether it is even worth the trouble to include it in your income tax return (ITR). After all, it is not pre-filled in the ITR, and the amount feels negligible. But should you ignore it?
The AIS, which records detailed information of your income, is maintained by the Income Tax Department and reflects everything from your mutual fund redemptions and stock sales to interest from fixed deposits (FDs), dividends, rent receipts, and even overseas remittances. Many taxpayers, especially salaried individuals, often assume that if it is not auto-filled in their return, it can be skipped. But that’s a risky assumption.
Says Shefali Mundra, tax expert at ClearTax: “Even small-value incomes like minor bank interest or dividends must be reported. The AIS is the tax department’s consolidated record of your financial activities. Omitting any taxable income, regardless of amount, can result in mismatches, scrutiny, or penalties for under-reporting.”
Common Gaps Go Unnoticed
It’s important to remember that pre-filled ITR data is just a starting point. It does not always capture every entry from your AIS. If a dividend of Rs 40 or interest income of Rs 120 appears in the AIS, but is missing from your return, the department may still flag it. And if the discrepancy is not explained, it could lead to a notice or a demand for explanation later.
What often happens is this: you download your Form 16, maybe glance at Form 26AS, file the return, and move on. Later, the tax department might flag a mismatch even if the difference is minor.
The risk is that in most cases, the system might just auto-adjust and raise a demand for tax on the unreported income. But in some situations, especially if these omissions stack up over multiple years, it can prompt a closer look from the department.
What You Should Do
Here are a few things you should do.
To start with, check your AIS, even if everything looks fine in the pre-filled return. Download it from the income tax portal and match it with your actual bank and investment statements. If you spot any entries that are missing in your ITR, add them manually.
And if something in AIS seems wrong, for instance, a dividend that was not credited or an inflated interest figure, you can flag it. The AIS portal has a feedback mechanism. Select the reason (like “Amount incorrect” or “Not related to me”) and upload documents, if you have any. It is also a good idea to reach out to the bank or institution responsible and ask them to correct their reporting.
Adds Mundra: “A lot of these issues come from incorrect Permanent Account Number (PAN) linkage or delayed reporting by financial institutions. Taxpayers should ensure PAN is correctly updated everywhere and avoid last-minute filing.”
A Quick List of Where People Go Wrong
Trusting only the pre-filled data and skipping AIS entirely
Ignoring small entries like small interest or dividends
Not raising objections to incorrect AIS data
Believing Form 26AS and AIS show the same information (but they don’t)
Overlooking capital gains and foreign income that don’t auto-populate
In short, the numbers may be small, but the system that tracks them is getting more detailed each year. And so, even if it feels trivial, it’s worth to put in the extra few minutes to report it.
