AIS and TIS reconciliation before you file ITR FY 2025-26: the four-year ITR-U window changes the math

Why AIS and TIS matter more in FY 2025-26 than in any earlier year

The Income Tax Department now runs an end-to-end automated matching layer between the data third parties report against your PAN and the figures you self-disclose in the ITR. Three things have changed in the last 18 months. First, the volume of reporting feeds has roughly doubled, with high-value credit-card spends, mutual fund SIP redemptions, demat transactions, and rent-paid disclosures now flowing in. Second, the compliance portal user interface has matured to the point that a taxpayer can submit feedback on any line item without involving a chartered accountant. Third, the Finance Act 2025 extended the ITR-U window to 48 months under Section 139(8A), which means the Department has four full years to surface a mismatch and force an updated return.

The combined effect: an unreconciled ITR filed in May or June 2026 is much more likely to attract a Section 143(1) intimation, a CPC notice, or a scrutiny under Section 143(2) than at any prior point. The cost of getting the original return wrong has gone up, both in late-fee terms and in the additional tax escalator on the eventual ITR-U.

How AIS is structured

AIS is now a four-tab statement. The first tab is the part-A summary, identifying the taxpayer and the financial year. The second tab covers TDS and TCS information, sourced from Form 26AS and the TDS statements of every deductor. The third tab covers SFT (Statement of Financial Transactions) reporting, the long list of high-value transactions reported by banks, mutual fund registrars, sub-registrars, depositories, and card issuers. The fourth tab covers "Other information", which includes GST turnover (for proprietors), Form 61A demat off-market transfers, and increasingly, foreign remittance data from LRS-reporting banks.

Most line items in the SFT tab carry a reporter ID, a transaction date, an amount, and an information source. Where the same transaction is reported twice (for example, a mutual fund redemption appears in both SFT-018 from the AMC and SFT-005 from the bank credit), AIS lists both lines and the taxpayer is expected to flag the duplicate via feedback.

How TIS computes the pre-fill

TIS is the Department's view of what the taxpayer should report, expressed in ITR-aligned buckets: salary, house property, business income, capital gains (split into STCG and LTCG and further split by asset class), other sources, exempt income, and total income. The TIS computation runs an algorithm on AIS that applies a small number of standard treatments: dividends gross of TDS, interest gross of TDS, FIFO for capital gains where the AMC did not supply specific lots, grandfathering rule for equity units acquired before 31 January 2018 only where the AMC supplied the pre-grandfathered cost.

The TIS values pre-fill the ITR-2, ITR-3 and ITR-4 forms. If the taxpayer accepts the pre-fill blindly, the ITR matches TIS and the return clears CPC processing in 21 days. If the taxpayer overrides without supporting feedback on AIS, the override triggers a mismatch flag and the return falls into the variance bucket. The Section 143(1) intimation arrives within 12 to 18 weeks, citing the specific mismatch.

The five most common mismatches and how to handle them

Mutual fund capital gains. The single largest source of variance. The AMC reports FIFO-based capital gains to the SFT, but the investor may have used specific identification lots, may have received bonus units, may have switched between schemes within the same fund house (a "switch" is technically two transactions, a redemption and a fresh purchase), and may have held units allotted before 31 January 2018 with grandfathered cost. KAMRIT's reconciliation workflow asks the AMC for the redemption statement at folio level, recomputes the gain on the investor's preferred method, and submits feedback on AIS where the AMC figure overstates.

Dividend reporting. Listed-company dividends are reported by the registrar (Link Intime, KFin) under SFT-015. The reported figure is gross of any DTAA withholding for non-resident shareholders and gross of any cash component for stock dividends. For residents, the figure is typically correct, but timing differences exist where the dividend is declared in March 2026 and paid in April 2026. AIS books the dividend in the year of declaration; the investor often books it in the year of receipt. Reconciliation is a timing-only difference and rarely needs feedback.

Foreign income from RSUs and ESPP. Indian residents working for US-listed parents typically receive RSU vesting and ESPP purchases that are taxed twice, once on vesting (perquisite under Section 17(2)) and once on sale (capital gains). The vesting is captured in Form 16 from the Indian payroll if the parent has set up a perquisite chargeback. The sale is not captured in AIS because the brokerage (E*TRADE, Charles Schwab) does not report to Indian SFT. The taxpayer must self-disclose under Schedule CG and Schedule FA. DTAA relief under Article 25 of the India-US DTAA is computed manually using the Form 67 disclosure.

Interest from joint accounts. Banks report interest against the first holder's PAN for SFT purposes. AIS shows the full interest against the first holder, even if the actual beneficial ownership is split between spouses. The first holder typically reports their proportionate share and submits feedback on AIS marking the balance as "Information relates to other PAN", with the second holder's PAN identified. Failure to submit feedback leads to a 143(1) on the first holder.

Rent paid above ₹50,000 per month under Section 194-IB. When a tenant deducts TDS at 5 percent on rent above ₹50,000 per month and files Form 26QC, the rent flows into both Form 26AS and AIS of the landlord. The TDS is captured in Form 26AS at 5 percent of annual rent. The landlord must report the rent as house property income and claim the TDS credit. Mismatch arises when the landlord disputes the rent figure (often due to maintenance carve-outs the tenant did not separate).

The compliance portal feedback workflow

Feedback is submitted at the line-item level. The taxpayer logs into the compliance portal, navigates to the AIS tile, drills into the specific transaction, and chooses one of seven feedback flags. The most useful flags are "Information is not fully correct" (where the amount is wrong, used for mutual fund FIFO overstatements), "Information relates to other PAN" (used for joint-account interest), and "Information is duplicate" (used where SFT-005 and SFT-018 both report the same transaction).

Feedback is forwarded to the original reporter for confirmation. The reporter has 30 days to accept or reject. Where the reporter accepts, the AIS line is annotated and TIS is recomputed within 7 working days. Where the reporter rejects, the AIS line stays as filed but carries a feedback-rejected flag, and the taxpayer's ITR position becomes the contested view. The Section 143(1) processing now defers to the feedback flag for low-value items but escalates to manual review for high-value items.

How the four-year ITR-U window changes the cost of getting it wrong

Under the pre-2025 regime, the ITR-U window was 24 months from the end of the relevant assessment year. For AY 2026-27 the window would have closed on 31 March 2028. The Finance Act 2025 extended this to 48 months, so the window now closes on 31 March 2030.

The additional tax escalator under Section 140B is now tiered across four slabs. An ITR-U filed by 31 March 2027 pays 25 percent of tax-and-interest on the additional disclosed income. The slab moves to 50 percent for filings in FY 2027-28, 60 percent for FY 2028-29, and 70 percent for FY 2029-30. The Income Tax Department has effectively built a four-year window in which to detect a mismatch and recover the additional tax at a punitive rate.

Reconciling AIS and TIS before filing the original return is the cheapest path. The original return carries no escalator. The next-cheapest path is a revised return under Section 139(5) before the AY-end (31 March 2027), which carries no escalator but does require the original return to have been filed by 31 December 2026.

Where KAMRIT positions reconciliation in the engagement

KAMRIT runs AIS and TIS reconciliation as the gate-zero deliverable of every ITR engagement. For salaried individuals with two or fewer Form 16s, the reconciliation is typically a 2-hour effort with no portal feedback. For HNIs with mutual funds, demat holdings, foreign income, and multiple property transactions, the reconciliation can extend to 8 to 12 hours and four to six portal feedback submissions, with a 14-day wait for TIS recomputation. The reconciliation memo becomes the audit trail if a 143(1) is later issued. Comparable platform players such as ClearTax and Tax2Win pre-fill from AIS automatically but do not run the feedback loop; CAclubindia and TaxGuru run editorial coverage of the AIS architecture but do not offer reconciliation as a service. KAMRIT's positioning is on the human-driven reconciliation, with the platforms used as supporting tools.

If your FY 2025-26 has any of the patterns flagged in this post, mutual fund redemptions, joint bank accounts, RSU vesting, foreign income, or high-value rent paid, talk to KAMRIT before you file. A senior associate from the direct tax desk reconciles AIS line by line, submits feedback where needed, and files the original return with a clean trail. Fixed-fee from ₹15,000 for resident individuals. Send a brief to the Income Tax Return Filing page or start a conversation with a senior partner.