AIS shows many financial transactions, but not all are taxable. Learn about 10 common AIS entries that may not attract tax while filing ITR AY 2026-27.
July 7, 2026 17:56 IST
When you file your Income Tax Return (ITR) for AY 2026-27, you’ll probably notice that your Annual Information Statement (AIS) contains far more financial transactions than you expected.
In fact, several entries in your AIS are merely informational. They are reported by banks, financial institutions, employers, registrars, and other entities to improve transparency and help taxpayers accurately report their income. Their presence in the AIS doesn’t automatically mean they are taxable or that you’ll receive a tax notice.
The Annual Information Statement (AIS) is an information and reconciliation tool that helps taxpayers verify transactions reported to the Income Tax Department. A transaction appearing in the AIS does not automatically mean it is taxable. Taxpayers should reconcile AIS entries with their financial records and determine their taxability based on the provisions of the Income-tax Act before filing their return.
As you prepare your ITR for AY 2026-27, it’s important to know which AIS entries genuinely increase your tax liability and which ones simply serve as a record of your financial activities.
Here are 10 common transactions that may appear in your AIS but may not attract any tax, depending on your individual circumstances.
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Savings account deposits and withdrawals: Deposits or withdrawals reflected in the AIS are not taxable merely because they appear there.
These are banking transactions and not income by themselves. However, taxpayers should be able to explain the source of significant deposits, if required, said Pranav Sai S, tax expert at ClearTax.
Fixed deposit opening or closure: Opening or closing a fixed deposit is an investment transaction and does not attract tax. Only the interest earned on the fixed deposit is taxable.
Recurring deposit transactions: Contributions made towards a recurring deposit are not taxable. The taxable component is the interest earned on the deposit, not the principal invested.
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Mutual fund purchases: Purchasing mutual fund units is an investment transaction and does not result in any tax liability. Tax arises only when the units are redeemed or sold and capital gains are realized.
Share purchase transactions: Buying shares is not a taxable event. Tax becomes applicable only when the shares are sold and a capital gain or loss is realized, stated Pranav Sai S.
Credit card bill payments: High-value credit card payments may appear in the AIS as specified financial transactions. However, paying a credit card bill does not constitute income and is therefore not taxable, commented Pranav Sai S.
Foreign remittances for personal use or education: Such remittances may be reported in the AIS but are not taxable merely because they appear there. Their taxability depends on the source and nature of the funds.
Purchase of immovable property: Buying a property is not a taxable event for the purchaser. While the transaction may be reported in the AIS, the purchase amount itself is not taxable income.
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Advance tax or self-assessment tax payments: These entries reflect taxes already paid by the taxpayer and are not taxable income. They are adjusted against the final tax liability while filing the return, according to Pranav Sai S.
Exempt income such as PPF interest: Certain exempt incomes, including interest earned on a Public Provident Fund (PPF), may appear in the AIS. Although such income may need to be disclosed wherever applicable, it does not attract tax.
Disclaimer: This article is for informational purposes only and does not constitute professional tax advice. Tax laws and regimes are subject to frequent changes by the government. Readers should verify details with official Income Tax Department notifications or consult a Chartered Accountant before making any financial decisions.
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This article was first uploaded on July seven, twenty twenty-six, at fifty-six minutes past five in the evening.
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