Tax Audit Deadline September 30: Why AIS, TDS and GST Figures May Not Match Your ITR and What Taxpayers Should Do

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As the September 30 tax audit deadline approaches, businesses and professionals should pay close attention to one issue that can easily complicate tax compliance: differences between their books of account, GST returns, Annual Information Statement (AIS), Taxpayer Information Summary (TIS), Form 26AS and Income Tax Return (ITR).

For Assessment Year 2026–27, the Income Tax Department has confirmed that the tax audit report for applicable taxpayers is due by September 30, 2026. The department has also been reminding taxpayers to file their audit reports early rather than waiting until the last day.

However, completing a tax audit is not simply about meeting a deadline. A crucial part of the process is ensuring that financial information reported across different tax systems can be properly reconciled.

A mismatch does not automatically mean that income has been concealed or that the taxpayer has made a mistake. Differences may arise because of timing, accounting treatment, duplicate reporting or incorrect information submitted by another party. The important task is to identify the reason and maintain supporting documentation.

Why Can GST Turnover and Books of Account Be Different?

One of the most common reconciliation issues relates to turnover.

A business may find that the turnover shown in its Profit and Loss Account does not exactly match the outward supplies appearing in GST returns. Such a difference deserves attention, but it is not necessarily evidence that either figure is wrong.

Differences may arise because of credit notes, debit notes, advances, year-end adjustments, cancelled invoices, exempt or non-GST supplies, accounting cut-off dates or transactions reported in a different GST period.

For example, an invoice may be recorded in the books at the end of March while the corresponding GST reporting or adjustment is reflected in another return period. Similarly, an accounting entry may be subsequently reversed through a credit note.

Before the tax audit is completed, taxpayers should therefore reconcile turnover according to the books with GST data and prepare an explanation for legitimate differences.

The purpose should not be to artificially make both numbers identical. The purpose should be to establish why they differ and whether both have been reported correctly under the applicable rules.

AIS Figures May Not Always Equal Taxable Income

The Annual Information Statement has become an important source of information while preparing an ITR.

AIS can contain information reported to the Income Tax Department from different sources. The department explains that AIS includes categories such as TDS/TCS information, specified financial transactions, tax payments, demand/refund information and other reported information. Taxpayers are also allowed to provide feedback where information appearing in AIS is incorrect.

This makes AIS extremely useful for detecting transactions that may otherwise be overlooked.

However, taxpayers should not simply copy every amount appearing in AIS into their taxable income.

Suppose AIS shows a securities transaction. The transaction value appearing in the statement may not itself represent the taxable capital gain. The taxpayer may still need to determine the cost of acquisition, applicable expenses, holding period and other relevant information before calculating taxable income.

Similarly, a transaction might appear twice, belong to another financial year or have been incorrectly reported by the reporting entity.

The Income Tax Department itself notes that AIS contains information presently available with the department and that taxpayers are still expected to verify their information and report complete and accurate income in the return.

Therefore, AIS should be treated as an important reconciliation tool—not as a replacement for books, bank statements and supporting records.

What Should You Do If AIS Contains Incorrect Information?

Do not ignore an incorrect entry simply because it came from a third-party reporting system.

First identify the transaction and compare it with your own records.

Check supporting documents such as:

Bank statements, invoices, investment statements, interest certificates, contract notes, accounting ledgers and other relevant documents.

If the information reported in AIS is incorrect, taxpayers can use the feedback facility available through AIS. The AIS system can show the reported value as well as a modified value after taxpayer feedback or confirmation from the information source.

Where appropriate, the taxpayer may also need to contact the institution or reporting entity responsible for submitting the incorrect information.

TDS Mismatch Can Directly Affect Your Tax Credit

A TDS mismatch requires particularly careful attention because it can affect the amount of tax credit available to the taxpayer.

Imagine that a customer deducts TDS from a professional payment but reports an incorrect PAN while filing the TDS statement. Your books may correctly show the income and TDS deducted, but the corresponding credit may not properly appear against your PAN.

Another possibility is that the deductor has deducted the tax but has not filed the relevant TDS statement correctly or has filed it late.

The Income Tax Department's Tax Credit Mismatch service allows taxpayers to check differences between TDS/TCS or other tax credits claimed in the ITR and the amounts reflected in Form 26AS.

If a TDS mismatch exists because of an error by the deductor, the department's guidance says that the taxpayer should inform the employer or other deductor, who may need to file a revised TDS return.

This is important because simply having a TDS certificate or accounting entry may not automatically resolve a mismatch in the tax system.

Form 26AS, AIS and TIS: Don't Treat Them as the Same Document

Although these statements are connected, taxpayers should understand their different roles.

Form 26AS primarily helps verify tax-credit information such as TDS and TCS. The Income Tax Department notes that from AY 2023–24 onwards, Form 26AS on the TRACES portal displays TDS/TCS-related data, while other taxpayer information is available through AIS.

TIS, meanwhile, provides category-wise aggregated information. It can show the value processed by the system and the value accepted by the taxpayer or confirmed by the source after considering feedback.

A sensible reconciliation process therefore involves checking all relevant sources instead of depending on just one statement.

Tax Audit Report and ITR Must Also Be Reconciled

Taxpayers sometimes concentrate heavily on GST and AIS reconciliation but overlook differences between their tax audit report and final ITR.

This can create another set of problems.

The profit shown in the financial statements is not necessarily the same as taxable business income. Various provisions of the Income-tax law can require additions, deductions or adjustments before taxable income is calculated.

For example, taxpayers may need to examine applicable disallowances, depreciation adjustments, brought-forward losses, statutory payments, TDS-related compliance and other tax adjustments.

The tax audit report should therefore be reviewed together with the final tax computation and ITR rather than being treated as an isolated compliance document.

A Practical Reconciliation Process Before Filing

Before finalising the tax audit and return, taxpayers and their tax professionals should ideally create a reconciliation working paper covering the major data sources.

Start with the books of account and financial statements. Establish the final turnover, expenses, profit and important balance-sheet figures.

Next, compare turnover and relevant transactions with GST returns and identify every significant difference.

Then download and review AIS and TIS. Match interest income, dividends, business or professional receipts, securities transactions and other relevant entries against the underlying records.

After that, verify TDS and TCS credits with Form 26AS and the relevant certificates. Where a credit is missing or incorrect, identify whether the issue relates to the PAN, deductor reporting or another filing error.

Finally, compare the tax audit report with the tax computation and proposed ITR. Check that applicable income, deductions, disallowances, depreciation, losses and other material disclosures have been properly considered.

Maintain documentary evidence explaining significant differences rather than relying on memory after the return has been filed.

Don't Change Correct Books Merely to Match AIS or GST

One of the most important principles in reconciliation is that a mismatch should be investigated—not mechanically eliminated.

If your books are correct and supported by invoices, bank records and other evidence, changing them merely because another system displays a different amount may create a fresh problem.

Likewise, AIS information should not automatically be treated as taxable income without understanding the nature of the transaction.

The objective is to establish the correct figure, understand the reason for differences and correct genuinely erroneous information wherever possible.

Conclusion

With the September 30, 2026 tax audit deadline approaching, reconciliation should be treated as a core part of the filing process rather than a last-minute formality. The Income Tax Department has confirmed September 30 as the due date for tax audit reports for FY 2025–26/AY 2026–27 and has urged taxpayers to file early.

Differences between books, GST returns, AIS, TIS, Form 26AS and the ITR are possible and do not automatically indicate wrongdoing. What matters is whether taxpayers can identify the reason for those differences and support the figures ultimately reported.

Businesses should therefore use the remaining time to reconcile turnover, verify reported income, check TDS/TCS credits, review tax adjustments and preserve supporting documents.

A well-documented reconciliation today can significantly reduce the risk of tax-credit problems, unexplained discrepancies and avoidable questions later.

Disclaimer: This article is for general informational purposes only. Tax treatment depends on individual facts and applicable law. Taxpayers should consult a qualified tax professional before taking decisions based on specific transactions.

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