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When it comes to filing your Income Tax Return (ITR), dividend income often creates confusion for taxpayers. A common issue arises when the dividend credited to your bank account differs from the amount reflected in the Annual Information Statement (AIS) or Taxpayer Information Summary (TIS). This discrepancy usually leaves investors wondering: which figure should they use while filing their ITR?

Why the Dividend Amounts Differ

According to tax experts, the difference occurs because the dividend deposited in your bank account is the net dividend—the amount you receive after the deduction of Tax Deducted at Source (TDS). On the other hand, AIS and TIS may display both gross dividend (before tax deduction) and net dividend.

Gross dividend represents the actual income earned from shares or mutual fund schemes, while the bank account only shows the balance after TDS has been deducted by the company or intermediary distributing the dividend.

What Should Be Reported in ITR?

Chartered Accountant Suresh Surana explains that for tax compliance, it is mandatory to report the gross dividend income in your ITR. This means you must disclose the total dividend earned before any TDS is deducted.

Taxpayers can then claim the TDS amount reflected in Form 26AS or TIS as credit while filing their returns. This ensures that the correct tax liability is calculated, and any deducted tax is adjusted against your final dues.

Importance of Matching Information

It is crucial to reconcile the dividend details shown in your bank account with those mentioned in Form 26AS, AIS, and TIS. While the bank will only show the net amount credited, the official tax statements provide a more comprehensive picture of your income and taxes deducted.

By cross-verifying, you not only ensure accurate income reporting but also safeguard your right to claim TDS credit. Failing to match these records may lead to mismatches in your return processing, unnecessary notices, or even delays in refunds.

What If There Is a Mismatch?

In some cases, the dividend amount reported in AIS may not tally with your bank account statement. This could be due to reporting errors by intermediaries or timing differences in dividend credit.

If such discrepancies are found, taxpayers are advised to use the feedback option available on the AIS portal. Through this feature, you can request corrections for one or multiple transactions at the same time. This process eliminates confusion and ensures that the data in your AIS matches the actual income you have received.

Key Takeaways for Taxpayers

1. Always report gross dividend income in your ITR, not just the net credited to your bank.

2. Use Form 26AS/TIS for TDS credit to avoid paying extra tax.

3. Match bank statements with AIS/TIS to ensure accuracy in income reporting.

4. Submit feedback on the AIS portal if any inconsistencies are noticed.

5. Accurate reporting boosts confidence that your return is correct and protects you from future tax complications.

Final Word

Dividend income may seem straightforward, but the difference between gross and net amounts often confuses taxpayers. The golden rule is simple: disclose your gross dividend in the ITR and use the TDS credit reflected in official tax documents. By carefully reconciling your statements with AIS and 26AS, you can ensure smooth filing and avoid unnecessary queries from the Income Tax Department.

Disclaimer: The views quoted above are based on expert opinion and should not be treated as professional financial advice. Taxpayers are encouraged to consult a certified tax advisor before making any decisions regarding income reporting or investments.