ITR Scrutiny Alert: Salary, FD Interest and TDS Errors to Avoid

Income tax return scrutiny can happen when the details mentioned in your ITR do not match the records available with the Income Tax Department.

These differences may relate to salary income, FD interest, TDS/TCS credit, capital gains, or high-value transactions. That is why taxpayers should check AIS, bank statements, and other investment records before filing their returns.

What Is AIS, and Why Should You Check It Before Filing ITR? 

AIS stands for Annual Information Statement. 

It is a record of your financial transactions available with the Income Tax Department. AIS includes details such as salary, interest income, TDS/TCS, securities transactions, foreign remittances, and other reported information.

Before filing your ITR, compare AIS with Form 16, Form 26AS, and investment records. If the details do not match, the system may flag the difference and request clarification.

Common ITR Filing Mistakes That May Trigger Scrutiny

Errors may include salary details, savings interest, TDS/TCS credits, capital gains, or high-value transactions.

Here are the key details you should verify carefully before submitting your ITR:

Area to Check	What It Means
Salary details	Salary in ITR should match Form 16, AIS, and employer TDS records
FD or savings interest	Bank interest shown in AIS should be fully reported in the ITR
TDS/TCS credit	Claimed tax credit should match Form 26AS and AIS
High-value transactions	Large investments, property deals, credit card spending, or foreign remittances should align with declared income
Capital gains	Gains from shares, mutual funds, property, or other assets should be correctly reported

How Can Salary Errors Lead to a Notice? 

Salary income should match Form 16, employer TDS filings, and tax department records.

If your ITR shows a lower taxable salary, it may be treated as underreported income. Before filing, check allowances, deductions, employer details, and total taxable income carefully.

Why Should FD and Savings Interest Be Reported? 

Interest from fixed deposits, recurring deposits, savings accounts, and income tax refunds may appear in AIS.

Many taxpayers miss small interest amounts because they do not treat them like regular income. Even if TDS has already been deducted, the interest still needs to be reported under the correct income head.

What Happens When TDS or TCS Details Do Not Match? 

A mismatch can occur when the tax credit claimed in the ITR exceeds what appears in Form 26AS or AIS.

This may delay refunds or lead to an adjustment notice. Taxpayers should verify TDS certificates, Form 16A, bank entries, and tax credit statements before submitting the return.

Why Do High-Value Transactions Matter?

Large transactions reported by banks, brokers, property registrars, or other institutions may be visible in AIS.

These transactions may include the following:

• Large mutual fund investments
• Property purchase or sale
• High credit card payments
• Foreign remittances
• Securities transactions

If these transactions do not match your declared income or savings pattern, the department may seek an explanation.

How Can Capital Gains Mismatch Happen?

Capital gains can arise from selling shares, mutual funds, property, gold, or other assets.

Errors may happen when a sale is visible in AIS, but the gain is not reported, or when the calculation is incorrect. Taxpayers should check the purchase cost, sale value, holding period, indexation (where applicable), and the correct tax treatment.

How to Reduce the Risk of Income Tax Scrutiny?

Before filing your ITR, carefully match all key records.

Use this checklist:

• Compare AIS with Form 26AS
• Match salary details with Form 16
• Report FD, RD, savings account, and refund interest
• Check TDS and TCS credits
• Verify capital gains from broker statements
• Review high-value transactions
• Keep documents ready for any difference
• Correct AIS feedback if there is a reporting error

AIS may also contain duplicate or incorrect data, so reconcile it with your actual records before filing. 

Final Outlook

Income tax return scrutiny is often triggered by missing or mismatched information, not just high income.

Before submitting your return, carefully review your salary, interest income, tax credits, investments, and capital gains. If any detail differs from tax records, keep documents ready and file the correct information in your ITR.

Source: https://www.moneycontrol.com

Disclaimer: This content is for education and awareness purposes only and should not be considered investment advice or a recommendation. Investments in securities markets are subject to market risks. Read all the related documents carefully before investing.