Reconciling Your Tax Documents.
How to spot broker reporting errors in your AIS before the tax department does.
Ramesh sat with his tea, looking at a letter from the tax office. He had filed his returns carefully, matching every rupee of his salary. Yet, the computer screen before him showed a tax mismatch of ₹45,000 on stock transactions he barely remembered making, now flagged as unpaid dues.
When you buy or sell shares, the tax department is watching. They do this through three documents. The first is Form 26AS, which is like your official tax passbook. It records the tax already deducted from your salary, bank interest, or sale of property. Think of it as the receipt for taxes you have already paid.
The second is the Annual Information Statement, or AIS. This is a detailed ledger. It tracks every single share buy, mutual fund sale, and dividend payout you received during the year. The third is the Taxpayer Information Summary, or TIS, which simply groups these transactions into neat totals so you can fill your tax forms easily.
However, computers can make mistakes. Brokers sometimes report the wrong purchase price or double-count a transaction. If you file your returns blindly using only Form 26AS, or assume the tax portal's pre-filled stock market data is always correct, you risk getting a tax notice. Reconciling these documents is how you catch these errors early.
Gold rate vs the making charges
When you buy gold jewellery, the total bill has two parts: the actual gold value at the market rate, and the extra making charges which can be 10% to 20% of the cost. If you pay the bill blindly without checking the breakdown, you risk paying for charges you never incurred. Reconciling your tax documents is exactly like verifying a jewellery bill. Your broker statements show the actual weight of the gold you bought, while the AIS is the final bill from the tax department. You must check both to ensure you do not pay tax on money you never made.
Why this matters
Reconciling your portfolio is not just about paperwork; it is about protecting your hard-earned savings. If the tax department's computer thinks you made a large profit because of a broker's reporting error, the burden of proof lies on you. Catching these discrepancies before filing saves you from stressful notices and unnecessary penalties later.
Where people go wrong
- Filing returns using only Form 26ASForm 26AS does not show your stock transactions. You must check the AIS to avoid underreporting capital gains.
- Trusting pre-filled tax portal data completelyBrokers sometimes report incorrect purchase prices or transaction values. Always cross-check the pre-filled numbers against your actual contract notes.
- Ignoring incorrect transactions in the AISMismatches do not disappear on their own. You must submit online feedback on the portal to correct any errors before filing.
Form 26AS tracks tax deductions, while the AIS lists every individual stock and mutual fund transaction.
Brokers can report incorrect buy prices, making your capital gains look higher than they actually are.
Submit online portal feedback immediately if you find any incorrect transaction details in your AIS.
We often ignore small mismatches in our tax documents because the portal feels intimidating, hoping the system will overlook what we choose to ignore.