Wrong Capital Gains in AIS on a Share or Mutual Fund Sale? Action Guide

Who this guide is for

This guide is for individual taxpayers in India who sold listed shares, equity or debt mutual fund units, ETFs, or similar securities during the year and found that the capital gains figure in their AIS does not match what they actually earned. It is useful if:

• Your AIS shows a large gain because the cost of acquisition (your purchase price) is missing or shown as zero.
• The same sale appears twice — once from the broker and once from the depository or registrar — inflating the total.
• Shares you bought before 31 January 2018 are not reflecting the grandfathered cost, so the gain looks bigger than it is.
• A switch between mutual fund schemes has been treated as a fresh sale and the original cost is not picked up.
• A transaction shown is not yours at all, suggesting a wrong PAN tagging or possible PAN misuse.

The AIS combines a Taxpayer Information Summary (TIS) on top of detailed source data. The detailed capital gains entries come from reporting entities — your broker, the Asset Management Company (AMC), and the Registrar and Transfer Agent (RTA). Because the source data can be incomplete, the AIS figure is meant to help you, not to replace your own computation. This guide does not give personalised tax advice; for a large or complicated gain, consult a qualified Chartered Accountant.

If your mismatch is across property sale, fixed deposit interest or salary rather than securities, start with our companion guide on the AIS and Form 26AS mismatch action plan.

What you can do this weekend

Friday evening

Log in to the income tax e-filing portal at incometax.gov.in. Open the Annual Information Statement for the relevant financial year and go to the capital gains section. Note the exact line that looks wrong: the security name, the sale value, the cost shown (if any), the dates, and the reporting source. Download the AIS in PDF and JSON so you have a saved copy with the original figures.

Look closely at whether the cost of acquisition column is blank, zero, or clearly lower than what you paid. A missing cost is the single most common reason an AIS capital gain looks inflated. Also scan for the same trade appearing twice from two different sources.

Saturday

Download your supporting statements. From your broker, get the capital gains profit and loss report (often called the tax profit and loss or tax report) for the full year — this already applies the correct purchase cost and grandfathering. For mutual funds, get the capital gains statement directly from the AMC or from the registrar (CAMS or KFintech), and pull your consolidated account statement (CAS) from the depository (NSDL or CDSL) or from the registrar.

Now reconcile line by line. Match each AIS capital gains entry against the broker report and the CAS. For every mismatch, write down what the AIS says versus what your statement says, and the reason — missing cost, wrong date, grandfathering ignored, duplicate, switch treated as redemption, or a transaction that is not yours.

Compute your own correct capital gain for the year from the broker and registrar statements. This is the number you will actually report. Keep your working clear enough that you could explain it to a tax officer later.

Sunday

Open the AIS again and submit feedback against each wrong entry. Choose the option that fits — for example, information is not fully correct, the information relates to another PAN or year, or it is a duplicate — and enter your correct value. Save the acknowledgement and screenshot the modified figure.

Prepare your ITR draft using your own computed capital gains, not the AIS number. If the gain is large, the security types are mixed, or you are unsure about set-off of losses, book a short paid consultation with a Chartered Accountant before you file. Getting the schedule of capital gains right the first time avoids a defective-return notice later.

Documents and evidence checklist

Step-by-step action plan

Step 1 — Open the AIS and isolate the wrong entry

Log in to the e-filing portal and open the Annual Information Statement for the relevant year. Drill into the capital gains information. For the entry that looks wrong, record the security or scheme name, sale value, cost of acquisition shown, dates, and the reporting source. Download both the PDF and JSON versions so the original record is preserved before any feedback changes the displayed value.

Step 2 — Understand why AIS capital gains are often wrong

The AIS pulls capital gains data from statements filed by reporting entities. Several things commonly go wrong at the source:

• Missing or zero cost of acquisition: Only the sale value is reported, so the entire sale price looks like gain.
• Grandfathering ignored: For listed shares and equity funds bought before 31 January 2018, the higher of actual cost or 31 January 2018 fair value should generally be used; if it is not, the gain is overstated.
• Duplicate reporting: The same sale is reported by both the broker and the depository or registrar.
• Switches and SIP units: A switch between schemes is treated as a sale, and individual SIP lots may not be matched to their own cost.
• Wrong PAN tagging: A transaction that belongs to another person or a different year is shown against your PAN.

Remember: the AIS is informational. Your legal obligation is to report the correct gain computed from your own records, not to mirror the AIS.

Step 3 — Download and reconcile your broker and registrar statements

Get your broker's capital gains report for the full year. A good broker tax report already applies the correct cost and grandfathering, and separates short-term from long-term gains. For mutual funds, download the capital gains statement from the AMC or registrar, and pull your CAS. Match every AIS line to a statement line. Where they differ, note the precise reason. This reconciliation is the heart of the whole exercise.

Step 4 — Compute your correct capital gain

From the reconciled statements, compute your actual short-term and long-term capital gains for the year. Apply the correct cost of acquisition, holding period, and grandfathering. Set off eligible losses as the law allows. If the position is complex — bonus or rights shares, ESOPs, foreign securities, or large debt fund redemptions — have a Chartered Accountant verify the computation, since the rules vary by instrument and can change between years.

Step 5 — Submit AIS feedback on each wrong entry

In the AIS, use the feedback option against each incorrect capital gains line. Pick the response that matches your case — for example that the information is not fully correct, relates to another PAN or year, or is a duplicate — and enter your correct value. The portal will show a modified figure and generate an acknowledgement. Submitting feedback does not change your filed return; it records your objection in the system and is your evidence that you raised the error.

Step 6 — File your ITR on your correct figure, on time

File your income tax return using your own computed capital gains, not the AIS number. Do not wait for the AIS to update — that can take time and is outside your control. Fill the capital gains schedule from your working, attach nothing you cannot support, and keep your statements ready. For help filing online, see the official portal guidance and, if needed, a Chartered Accountant.

Step 7 — Fix the data at source where a private entity made the error

If the root cause is wrong data from a broker, AMC or registrar, raise it with that entity directly. Ask them to correct their filed statement of financial transactions so the AIS reflects the right figure in a future refresh. If they are SEBI-regulated and do not resolve it, you can escalate to SEBI through the SCORES platform. Our companion guide on a stuck mutual fund redemption via AMC, RTA and SEBI SCORES walks through how to engage these entities.

Step 8 — Respond promptly to any tax notice

If the department later raises a query, a defective-return notice, or a demand based on the AIS figure, respond within the time allowed with your reconciliation and statements. Our guides on a defective income tax return notice under Section 139(9) and an income tax demand notice or refund adjustment set out how to reply. Keep your CA in the loop for anything beyond a routine clarification.

Escalation ladder

Copy-paste feedback / complaint template

Use this when writing to your broker, AMC or registrar to correct the data they reported. Replace the text in square brackets with your own details before sending.

When RTI can help

The Right to Information Act, 2005 applies to public authorities, which includes the Income Tax Department under the Central Board of Direct Taxes. RTI is a tool to access information, so it can support — but not replace — the AIS feedback route. It can be useful in these situations:

• Status of a grievance you have already filed: If you raised a grievance with the Income Tax Department about the wrong AIS entry and got no response, an RTI to the relevant Central Public Information Officer can ask for the current status and any noting on your grievance.
• Records or procedure you are entitled to: You can seek the procedure followed for AIS feedback processing or copies of communications relating to your own case, to the extent the law permits disclosure.
• Backing up an appeal: If a discrepancy escalates into an assessment dispute, information obtained through RTI can strengthen your records, though substantive relief comes from the assessment and appeal process, not from RTI.

To file an RTI online, see our step-by-step RTI filing guide. The CPIO must respond within 30 days. If the reply is missing or inadequate, see filing a first appeal under RTI Section 19 and the broader first and second appeal guide. For advanced strategies, The RTI Playbook covers using RTI in complex disputes with government departments.

When RTI will not help

RTI has clear limits in an AIS capital gains dispute:

• RTI cannot correct the AIS: The figure comes from data filed by reporting entities. The designated correction route is AIS feedback on the income tax portal, plus a correction request to the entity that reported the data. RTI does not change the AIS entry.
• Private brokers, AMCs and registrars are not public authorities: RTI does not apply to a private broker or fund house. For their errors, use the entity's grievance process, and SEBI SCORES if they are SEBI-regulated.
• RTI does not speed up your refund or assessment: It is an information tool, not a way to force a faster substantive decision. The grievance facility, AIS feedback, and the assessment process are the channels that change outcomes.

Common mistakes to avoid

• Copying the AIS figure straight into your ITR: The AIS is a reference. If its cost of acquisition is wrong, you will over-report your gain and pay tax you do not owe. Always report from your own computed figure.
• Delaying your return to wait for an AIS correction: The AIS may not update before the due date. File on time on your correct number and submit feedback separately. Late filing only adds interest and penalty exposure.
• Ignoring grandfathering for pre-2018 shares: For listed shares and equity funds bought before 31 January 2018, the grandfathered cost usually reduces the gain. Check that your broker report applied it.
• Missing duplicate entries: The same trade can appear from two sources. Reconcile carefully so you do not report — or get taxed on — the same gain twice.
• Treating a fund switch as a tax-free move: A switch between schemes is generally a sale for tax purposes. Make sure the cost is correctly matched so the gain is neither overstated nor understated.
• Not keeping the AIS feedback acknowledgement: Without proof that you flagged the error, it is harder to defend your position later. Save the acknowledgement and a screenshot of the modified value.
• Assuming a stranger's transaction is harmless: If the AIS shows a sale you never made, it could point to PAN misuse. Take it seriously — see our guide on PAN misuse and unknown accounts — rather than just denying it and moving on.
• Going it alone on a complex computation: For large gains, mixed instruments, or loss set-offs, a Chartered Accountant's review is worth the fee and reduces the risk of a notice.

For the wider picture on tax-record discrepancies across income heads, see the AIS and Form 26AS mismatch guide, and browse the full library in Tax and GST practical guides.