The Annual Information Statement (AIS) serves as a comprehensive record of significant financial transactions undertaken by taxpayers, monitored closely by the Income-tax Department.

This statement plays a crucial role in promoting transparency and ensuring compliance with tax regulations.

Let's explore the various financial transactions that are part of the AIS along with their respective monetary limits prescribed in respect of a person for submitting “ Statement of Financial Transactions” by the reporting entities:

1. Cash Transactions for High-Value Instruments:

Transactions where cash is used to purchase bank drafts, pay orders, or banker's cheques amounting to ten lakh rupees or more in a financial year are reported in the AIS. This helps track the source of the cash used for purchase of such banking instruments.

2. Cash Payments for Pre-paid Instruments:

Cash payments exceeding ten lakh rupees during the financial year for purchasing pre-paid instruments issued by the RBI are reported in the AIS. This help in tracking unexplained investment, if any, for purchase of such instruments.

3. Significant Cash Deposits and Withdrawals:

Cash deposits or withdrawals (including through bearer's cheques) aggregating to fifty lakh rupees or more in a financial year, across one or more current accounts, are captured in the AIS. Additionally, cash deposits exceeding ten lakh rupees other than the current account are included for monitoring in the AIS .

4. High-Value Time Deposits:

Time deposits (excluding renewals) aggregating to ten lakh rupees or more in a financial year are reported in the AIS. This information assists in tracking the source of investment in such deposits

5. Credit Card Payments:

Payments of one lakh rupees or more in cash, or ten lakh rupees or more through other modes, against credit card bills in a financial year are part of the AIS. This aids in monitoring credit usage and expenditures.

6. Acquisition of Securities and Investments:

Payments for acquiring bonds, debentures, shares (including share application money), or units of mutual funds exceeding ten lakh rupees in a financial year are reported in the AIS.

7. Foreign Exchange Transactions:

Payment for purchase of foreign currency exceeding ten lakh rupees during a financial year, through various payment methods, are included in the AIS.

8. Property Transactions:

Purchases or sales of immovable property valued at thirty lakh rupees or more, as determined by stamp valuation authorities, are recorded in the AIS. Real estate transactions above this threshold are closely monitored for tax compliance.

9. High-Value Goods or Services Payments:

Cash payments exceeding two lakh rupees for the sale of goods or services (excluding specified transactions) by any person are reported in the AIS. This aids in tracking high-value business transactions and income sources.

10. Income Sources:

Income such as capital gains from listed securities or mutual funds, dividend income, and interest income are detailed in the AIS. This information assists in accurate tax assessments and income reporting.

In addition to the above, the following transactions are included in the AIS based on the TDS and TCS statements filed.

• Transactions involving TDS- The information contained in the TDS statements filed in respect of income and tax deducted thereon is included in the AIS to track the reporting on which TDS is made.
• Transactions involving TCS- The information contained in the TCS statements filed in respect of payments on which tax is collected at source is included in the AIS to track the source of payments or investments.

Conclusion

The AIS is instrumental in the Income-tax Department's efforts to combat tax evasion, promote voluntary compliance, and ensure fair taxation. By capturing and analyzing these diverse financial transactions within specified monetary limits, the department can effectively monitor economic activities and enforce tax laws. Taxpayers are encouraged to maintain transparent records and report their financial activities accurately to uphold the integrity of the tax system. The AIS serves as a vital tool in fostering a transparent and accountable financial ecosystem.

[Disclaimer- The article is only for educational purposes and is not to be construed as tax advice. The relevant provisions of the Income-tax Act may be referred to, for complete understanding.]