What is the annual information statement and where does its data come from?
It is a compilation, held against your Indian tax identifier, of what third parties have reported about you: banks, registrars, brokers, companies and similar reporting entities. You are not its author. Each line is somebody else's description of a transaction, and both the usefulness and the danger of the compilation follow from that. It shows you what the tax administration has been told, and a return that contradicts it without explanation invites an enquiry. Read it before filing rather than after, and treat each line as a question to be answered, what was this, is the description right, and does my return account for it, rather than a figure to be copied.
My statement shows a transaction I did not make, how do I correct it?
Through the feedback route on the statement itself, which records your response against the reported line, and then through the entity that reported it. The compilation is not the source of the information and cannot be edited as though it were: the correction has to come from the reporting entity's own filing. So do both. Mark the line as incorrect so your position is on record before the return is filed, and ask the bank, registrar or broker to correct what it reported. Keep the acknowledgement of the feedback with the return papers. It is the evidence that the discrepancy was addressed rather than ignored.
Does the statement include income I earned outside India?
It can. Alongside what Indian institutions report, the compilation carries information India receives from other countries under exchange arrangements, which is why an overseas account a client had not mentioned sometimes appears in it. Two consequences follow for anyone with a cross-border file. What you did not report at home may already be known here, which changes the calculation about voluntary correction considerably. And the foreign information is often described in the other country's terms and converted, so the amount shown may not match the figure in your own records even where the underlying facts are identical.
Why is the figure in my statement higher than my actual gain?
Because what gets reported is usually the transaction, not the income. A registrar reports the consideration for a property transfer and a broker reports the proceeds of a sale; neither knows your cost, your improvements or your expenses of sale. So a modest gain can sit behind a large reported number, and the difference is not an error to be corrected but a computation to be evidenced. Keep the purchase documents, the improvement invoices and the transfer costs with the return. The reported figure is where an enquiry starts, and the cost documents are what turn it into the figure you actually filed.
Do I have to report something just because it appears in the statement?
No. The compilation records what was reported about you, not what is taxable, and lines in it are frequently not income at all: a transfer between your own accounts, a maturity of capital, a gift, or somebody else's transaction reported against your identifier. What you cannot do is leave a difference unexplained. The discipline is to reconcile, so that for every line either it is reflected in the return or there is a documented reason it is not. That reconciliation, kept with the return, is the difference between answering an enquiry in one letter and answering it in five.
Why does the same bank interest appear twice in my statement?
Duplicate reporting is common and has ordinary causes: two branches of one bank reporting the same account, an entity reporting a period twice, or one holding reported by both a broker and a registrar. It does not double your income, but a return filed on the compilation's totals will overstate it, and a return filed on the correct figure will appear to understate it. So identify the duplicate, mark it through the feedback route, and keep the bank's own statement showing the single credit. File on the true figure and hold the explanation for the difference, rather than filing on a total you know is wrong.
What is cross-border tax?
Cross-border tax is what applies when income, assets or people touch more than one tax system at once — someone living in one country and earning in another, a company selling or hiring abroad, a family holding property in a second country. The work is rarely one country's rules applied harder; it is reconciling two sets of rules and claiming the relief that stops the same income being taxed twice at full rates. See what we do.
I have not filed for several years while living abroad — what are my options?
Both countries have routes back, and using one before they contact you is what preserves the relief. On the US side there are procedures aimed at taxpayers whose failure was not wilful, including one designed for people living outside the country, and separate procedures for late account reports and information returns alone. Canada has its voluntary disclosures programme and taxpayer relief for penalties and interest. Filing quietly and hoping is the one approach with no protection attached to it. See catch-up filing.
