Reconciling a Client's Bank Statement Against AIS and SFT Before Filing

Why the bank statement is your reconciliation anchor

Almost every transaction that ends up in AIS also settles through a bank account. Interest is credited there, dividends land there, an FD is funded from there, property consideration and share purchases move through it, and cash deposits are made into it. That makes the statement the one ledger where a reportable event and its cash leg both appear, which is exactly why it is the right anchor for reconciliation.

Keep the three portal documents in their proper roles. Form 26AS is essentially a tax-credit statement: TDS, TCS, advance and self-assessment tax, refunds, and some high-value SFT data. AIS is wider and carries the income and transaction data itself, drawn largely from SFT filings under section 285BA read with Rule 114E. TIS is the processed summary that actually drives the pre-fill. In practice you reconcile income and transactions to AIS, reconcile the tax you claim to 26AS, and treat TIS as the number the utility will show the client.

The goal is a two-level match. First reconcile at category level, so the interest total, the dividend total and the cash-deposit total each tie out. Then go line by line on the material and the high-value items, because those are the ones that draw a query when they do not agree.

Which statement entries map to AIS and SFT reportables

Not every line in a statement is reportable, but a predictable set of entries maps straight onto AIS and the SFT thresholds. Tag these as you work through the statement, and total each category per account and per PAN. The thresholds below are the commonly applied Rule 114E limits; treat them as the trigger for reporting, not as the point at which the income becomes taxable.

• Cash deposits into savings accounts. Where cash deposits aggregate to Rs 10 lakh or more across a person's savings accounts in a financial year, the bank reports them and they surface in AIS. In current accounts the commonly applied threshold is Rs 50 lakh of cash deposits or withdrawals. Tag every cash-deposit narration and total it per account and per PAN.
• Interest income. Savings interest and fixed-deposit interest credited by the bank are reported and appear in AIS, with TDS on FD interest also visible in 26AS. Reconcile the interest credits in the statement to the AIS figure, and use it to claim the correct deduction under section 80TTA or 80TTB.
• Dividend income. Dividends credited to the account are reported by the company or registrar and pre-fill in AIS under dividend. Match each credit and confirm the client has offered the full year, not only the payments they remember.
• Fixed and time deposits. New time deposits aggregating Rs 10 lakh or more in a year are reportable, with renewals generally excluded. Both the debit that funds the FD and the maturity credit show in the statement.
• Securities and mutual funds. Purchases of shares, bonds, debentures or mutual fund units aggregating Rs 10 lakh or more are reported, and the cash legs run through the account. AIS also carries broker and registrar sale data that feeds capital gains, which is a frequent source of under-reporting.
• Immovable property. Purchase or sale of property of Rs 30 lakh or more, or the stamp duty value, is reported by the registrar. At least part of the consideration usually moves through the bank, so the statement corroborates the dates and amounts.
• Credit card payments. Card bill payments of Rs 1 lakh or more in cash, or Rs 10 lakh or more by any other mode in a year, are reportable. The paying debit sits in the statement.
• Foreign remittances and forex. Outward remittances under the LRS, with their Form 15CA and 15CB trail, and purchase of foreign currency of Rs 10 lakh or more appear in AIS; the funding debit is in the statement.
• Business receipts and GST turnover. For business clients, AIS may carry GST turnover and third-party reported receipts. The corresponding collections land in the current account, so the statement is your bridge between AIS turnover and the books.

The mismatches that actually trigger notices

Most differences between a statement and AIS are not fraud, they are structure. Knowing the recurring patterns lets you resolve them quickly instead of treating each one as a fresh mystery. These are the ones that, left unexplained, turn into an intimation under section 143(1) or a query.

• Gross versus net. AIS interest is typically reported gross of TDS while the statement shows the net credit. Reconcile to the gross figure, then trace the TDS to 26AS.
• Timing and accrual. Interest the bank books near the year-end cutoff, or accrues on a cumulative FD, can sit in a different year in AIS than the credit date suggests. Cumulative fixed deposits are a classic under-reporting trap because no cash hits the account until maturity.
• Omitted accounts. AIS aggregates across every account linked to the PAN. If the client gave you three statements but holds a fourth dormant account with a little interest or a stray cash deposit, AIS still carries it and the return falls short.
• Joint accounts and double counting. Interest or a deposit in a joint account can appear in more than one holder's AIS. Decide who offers it, so the same rupee is neither taxed twice nor missed entirely.
• Denied or misattributed cash deposits. A cash-deposit line in AIS that the client says is not theirs, or belongs to another PAN or year, needs evidence and an AIS feedback entry, not silence.
• Unexplained high-value cash. A large cash deposit with no documented source is among the most common triggers for a query. Attribute it in the statement to a source you can support, such as recorded sales, a loan, a gift or an earlier withdrawal redeposited, before filing.
• Sales never offered. Broker-reported share or mutual fund sales in AIS with no matching capital-gains computation are a frequent scrutiny and 143(1) adjustment source.

A by-hand cross-check workflow

The method does not depend on any tool. Worked carefully, it closes out even a busy statement in a defined set of steps.

1. Assemble the full set: every bank statement for the year across all accounts, plus the client's AIS, TIS and 26AS downloaded from the portal.
2. Normalise each statement into a single categorised view with date, amount, direction, counterparty and a category, and roll credits and debits up by counterparty so a year of scattered narrations becomes a party-wise ledger.
3. Flag the reportable entries from the mapping above and total each category per account and per PAN.
4. Lay the AIS line items beside your categorised totals and match head by head: interest to interest, dividend to dividend, the SFT cash-deposit figure to your cash-deposit total, and so on.
5. Chase the residuals both ways. Anything in AIS with no statement entry, and anything material in the statement with no AIS line, is a question to resolve before filing.
6. Resolve each difference to a reason: timing, gross versus net, a missing account, a joint holding, or a genuine omission that changes the return.
7. Where AIS itself is wrong, record the correct position and raise AIS feedback. Where the return is wrong, fix the computation.

Where the hours go, and how to cut them

Steps 2 and 3 are where the time disappears. Building a clean party-wise ledger from a year of inconsistent narrations, then categorising every line, is mechanical work that does not need a CA's judgement, only a CA's review. This is the part Greenote Lite automates: feed it the client's Excel or CSV statement and it returns an audit-ready workbook with a party-wise ledger, every transaction categorised and named, a category summary, and an ITR summary that flags the AIS and SFT relevant lines.

Narration formats differ from one bank to the next, so a credit that reads one way on an SBI statement reads another on an HDFC or ICICI statement. The engine auto-detects the format and resolves names across those variants, and rows it cannot attribute go under an honest Suspense head rather than a wrong guess, so your reconciliation starts from a tidy ledger instead of raw rows. You still apply the judgement in the matching and residual steps; the tool removes the transcription.

Once the ledger is clean, close the loop and document it. Write the reconciliation up as a workpaper: category totals, the AIS figure against each, the reason for every difference, and the evidence behind the high-value items. This is the document that answers a later notice in a single reply instead of a fresh investigation.

Use the AIS feedback facility for genuinely wrong entries. The portal lets you mark each line as, for example, information is correct, not fully correct, relates to another PAN or year, duplicate, denied, or income is not taxable. Keep the acknowledgement with your workpapers. Remember the distinction: correcting AIS does not change the client's tax, correcting the return does. File the feedback where AIS is wrong, and revise the computation where the income is wrong, and do both when both apply.

Making this repeatable across a client base

Across a practice, this is the same procedure repeated many times over with different narrations. The judgement does not scale, but the preparation does, and that is the part worth taking off your desk. Retain the working each time, because a 143(1) adjustment or a later query is answered fastest by the reconciliation you have already done, dated and evidenced.

If you want the party-wise ledger, the categorisation and the AIS and SFT aware ITR summary prepared for you so finalisation goes to the questions that matter, the first statement on Greenote Lite is free for the first set of transactions, then it is pay per statement with no subscription and no card. The statement is processed in memory and deleted the moment the report is ready, so nothing of your client's data is retained. Verify your email with a one-time code and run it on a statement you are already working this season.