the income tax department already knows most of what is in your bank account, demat account, and mutual fund folio . banks report cash deposits above ₹10 lakh. brokers report every buy and sell. mutual fund houses report dividends and redemptions. property registrars report stamp duty payments .
by the time the itr portal opens, the data is already there. the question is whether the investor has checked it.
the three documents to check first
form 26as. this is the tax passbook. it shows tds deducted by employers, banks, and other deductors. it also shows advance tax payments and refunds issued . it is available on the traces portal.
annual information statement (ais). this is a broader view. it includes everything in form 26as plus interest income, dividends, mutual fund redemptions, share trades, property purchases, and foreign remittances . it is available on the income tax portal under the ais menu.
taxpayer information summary (tis). this is a summarised version of ais. it shows total amounts under different categories like salary, interest, and dividends. it gives two values: one processed by the system and another confirmed by the taxpayer or the source .
how to reconcile capital gains
the capital gains statement from the broker is the starting point . it shows purchase price, sale price, holding period, and the resulting gain or loss.
the next step is matching it with ais. if a transaction appears in ais but not in the return, it will likely trigger a notice . small mismatches are not ignored. they are flagged.
unrealised gains should not be reported. only gains from actual sales during the financial year are taxable .
where to report different types of income
capital gains. go in schedule cg. short-term and long-term gains have separate sections . equity ltcg under section 112a gets the ₹1.25 lakh exemption. debt funds bought after april 1, 2023 are taxed at slab rate under section 50aa .
dividend income. goes in schedule os (income from other sources). the gross dividend amount must be reported, not the post-tds amount. tds under section 194k can be claimed as credit .
interest income. also goes in schedule os. bank interest, fixed deposit interest, and bond interest are all taxable. if the total interest exceeds certain limits, tds is deducted .
which itr form to use
itr-1. only for residents. cannot be used if there are capital gains of any kind. even if the gain is below the exemption limit .
itr-2. for individuals with salary, pension, or other income and capital gains. no business income. this is the most common form for investors .
itr-3. for individuals with business or professional income alongside capital gains. required for those who trade f&o or intraday .
the deadline
for ay 2026-27, the due date for itr-2 (capital gains only, no business income) is 31 july 2026 . for itr-3 (business income) without audit, the due date is 31 august 2026 .
frequently asked questions
1. what is the difference between form 26as and ais?
form 26as shows only tds, tcs, and tax payments. ais shows a broader view of income, investments, and financial transactions .
2. can i file itr-1 if my equity ltcg is below ₹1.25 lakh?
no. itr-1 cannot be used if there are any capital gains, even if the gain is below the exemption limit .
3. do i need to report unrealised gains in my itr?
no. only gains from actual sales during the financial year are taxable .
4. what happens if my investment records do not match ais?
mismatches can trigger notices or delay refunds. reconcile before filing. if a transaction in ais is incorrect, feedback can be submitted through the portal .
5. where do i report dividend income in itr?
under schedule os (income from other sources). gross dividend must be reported, and tds credit can be claimed .
