AIS filing: 5 common SFT reporting mistakes entities must avoid before May 31

The Annual Information Statement (AIS) has become an important part of India’s digital tax system, helping taxpayers access financial information linked to their PAN in one place and file Income-tax Returns more accurately.

AIS allows taxpayers to access important financial information linked to their Permanent Account Number (PAN) directly through the Income-tax portal. Details related to interest income, dividends, securities transactions, mutual fund investments, property deals and other specified financial transactions are available in one place.

This enables taxpayers to verify financial information while filing Income-tax Returns (ITRs), improving accuracy and reducing the chances of errors. The system also promotes greater transparency and smoother compliance.

Role of reporting entities in AIS ecosystem

A large network of institutions supports the AIS framework. These institutions, known as Reporting Entities, form the backbone of the AIS ecosystem.

Banks, cooperative banks, mutual funds, companies, property registration authorities, foreign exchange dealers and several other specified entities regularly furnish Statements of Financial Transactions (SFTs). The information submitted by them is reflected in AIS and helps taxpayers view financial data linked to their PAN.

The filing of SFTs is a statutory requirement under Section 285BA of the Income-tax Act, 1961, read with Rule 114E of the Income-tax Rules. The framework continues under the Income-tax Act, 2025 as well.

The due date for filing SFTs for FY 2025-26 is May 31, 2026.

These reporting requirements strengthen the AIS ecosystem and help create a more transparent, efficient and compliance-friendly tax administration system.

5 common SFT reporting errors entities must avoid

The effectiveness of AIS depends heavily on the accuracy and quality of information reported by Reporting Entities. Even minor mistakes in SFT filing can create unnecessary inconvenience for taxpayers. Here are five common errors Reporting Entities should avoid:

Incorrect or missing PAN details

Wrong or incomplete PAN information can lead to financial transactions being mapped incorrectly in AIS, creating confusion for taxpayers during ITR filing.

Duplicate reporting of transactions

Duplicate entries may result in inflated transaction values appearing in AIS and can trigger unnecessary scrutiny or taxpayer grievances.

Incorrect transaction values

Errors in transaction amounts, especially in joint accounts or jointly held assets, can create mismatches in taxpayer records and affect return filing accuracy.

Poor reconciliation of records

Failure to reconcile transaction data internally before filing SFTs may lead to inconsistencies between reported information and actual records.

Delay in SFT filing and weak quality checks

Late filing, inadequate verification and lack of periodic quality checks before submission can affect the reliability of AIS data and create compliance issues.

Simple measures can reduce reporting mistakes

Many of these issues can be avoided through basic but important compliance measures. Reporting Entities should validate PAN details before filing, reconcile transaction data thoroughly, ensure timely submission and conduct regular quality checks before uploading SFTs.

The Income-tax Department continues to support Reporting Entities through awareness programmes, stakeholder engagement and outreach initiatives. These efforts aim to improve reporting standards, reduce errors and strengthen the compliance ecosystem.

Accurate SFT reporting critical for taxpayer experience

As India moves towards a more digital and transparent tax administration system, timely, accurate and complete SFT reporting has become increasingly important.

The information submitted by Reporting Entities directly impacts taxpayer experience and supports voluntary compliance. Correct SFT reporting is therefore not only a statutory obligation but also an important contribution towards building a transparent, efficient and taxpayer-friendly tax ecosystem.