First, understand what is Annual Information System (AIS).
In straightforward words, these are your financial transactions’ information that is reported by various financial institutions.
Let’s take some examples
Let’s suppose you invest in some mutual funds or you invest in shares.
What will happen here?
Mutual fund agency reports this transaction to the income tax department how much investment you have done with?
That means the income tax department knows that you have invested in the mutual fund.
Now let’s carry on with this example
Suppose now you sell these mutual funds then also mutual fund agency reports to the income tax department that you have sold these mutual funds with exact numeric figures of your investment.
Now income tax department also knows about your sale of the investment.
Nobody can hide their financial transactions.
Let’s take some other examples.
If you buy or sell a house or flat or immovable property, then you will go for registration of such property. This is also a financial transaction.

What will happen now?
Registration authority (REGISTRAR) will report to the income tax department that this person has bought or sold his property with the exact numeric figure. If you sold your flat worth rs 1cr then the registration authority mentions this figure in their report. Buyers’ and sellers’ information is reported by the registration authority to the income tax department. If you buy a car then the car dealer collects TCS (Tax Collection at source) from you.
What does that mean?
That means The income tax department knows that you have bought a car. You cannot hide these transactions from income tax departments. Just like that, there are so many financial transactions or I can say every major financial transaction income tax department knows.
You can see your all major financial transactions in AIS on the income tax website. I hope now you get to understand what is Annual information statement (AIS). And you don’t try to hide your financial transactions with the income tax department. If you will try to hide then it will give pain in the future. Plan your finances wisely.