AIS mismatch for RSU holders: why your foreign income doesn't show up (and what to do)

You opened the Annual Information Statement (AIS) on the ITD portal to cross-check your figures before filing ITR-2. For the salary income, the number roughly matches Form 16. But for your RSU perquisite — there's nothing. Or there's a different number. Or there are entries that shouldn't be there (sell-to-cover proceeds showing up as capital gains).

This happens to nearly every Indian RSU holder. AIS was not designed with cross-border equity compensation in mind. Here's what's happening and how to handle it.

What AIS is — and what it isn't

The Annual Information Statement (AIS) aggregates financial data about you from multiple reporting sources: banks, employers (via TDS returns), mutual funds, brokers registered in India, registrars, and others. It went live in November 2021 as a replacement for the older Form 26AS.

What AIS does capture:

• Salary TDS deducted by your Indian employer (matches Form 16 Part A)
• Domestic bank interest and dividends
• Domestic share sales reported by Indian brokers
• Tax payments (advance tax, self-assessment tax, TDS credits)

What AIS does not reliably capture:

• RSU perquisite value computed by the employer's payroll (it may appear under "Salary" in TDS data, but the breakdown is not always granular)
• Foreign dividends paid directly by the US company
• Schedule FA assets (by design — Schedule FA is self-reported)
• Foreign share sales through a non-Indian broker
• The distinction between sell-to-cover and a voluntary sale

This is why your AIS looks incomplete or mismatched for RSU income.

The four mismatch scenarios and how to handle each

Scenario 1: RSU perquisite appears in AIS under Salary but the amount differs from Form 16

Why it happens: Your employer submits quarterly TDS returns (Form 24Q) to the ITD. AIS pulls the salary figure from these TDS returns. If the TDS return was filed before the employer's year-end payroll reconciliation, the numbers may differ slightly. The final reconciled figure is what appears in Form 16 Part B.

What to do:

• File based on Form 16 Part B. This is the authoritative employer-reported figure, prepared after reconciliation.
• In AIS, submit feedback on the Salary entry: select "Information is correct" and note the Form 16 amount if prompted. If the AIS amount is materially wrong (not just rounding), submit "Information is partially incorrect" and enter the correct amount from Form 16.
• The return filed on Form 16 figures will be processed by CPC; the AIS feedback reduces the chance of a mismatch notice.

Scenario 2: AIS shows no RSU perquisite or salary income at all

Why it happens: If you work for a foreign company (the employing entity is a non-Indian company) and the RSU perquisite is managed outside Indian payroll, there may be no TDS return filed with the ITD for that income.

What to do:

• File ITR-2 based on your actual income (Form 16 + broker statements). Do not underreport because AIS is blank.
• The ITD compares your filed return against AIS; blanks in AIS don't protect you from assessments.
• Ensure your CA has the perquisite computation clearly documented in case of a future query.

Scenario 3: AIS shows sell-to-cover proceeds as capital gains

Why it happens: Some brokers report sell-to-cover transactions to financial intelligence units or registrars in a way that eventually flows into AIS as a sale of shares.

What to do:

• Do not add this as a capital gain in your ITR-2. The sell-to-cover is a component of the vest transaction, not a separate sale. The perquisite (salary income) already covers the gross vest value.
• In AIS, submit feedback on the Capital Gains entry: select "Information is incorrect" and explain: "This is a sell-to-cover transaction at vest, part of RSU perquisite already included in salary income under Schedule S. Not a separate capital gain."
• Keep the broker statement showing the sell-to-cover activity type alongside the vest event — this documents your position.

Scenario 4: AIS shows a partial or net dividend (not the gross dividend)

Why it happens: Some banks credit foreign dividends (net of US withholding) directly to your savings account. AIS may pick up this credit as "interest" or "other income" from the bank credit data. The amount shown (net of US withholding) is lower than the gross dividend you're supposed to report.

What to do:

• Report the gross dividend (before US withholding) from your 1042-S or broker statement as Income from Other Sources in ITR-2.
• Claim the US withholding as Foreign Tax Credit via Form 44.
• In AIS, submit feedback: "This is the net dividend after US withholding. Gross dividend is [amount] as reported in ITR-2 under IFOS. FTC claimed via Form 44."

Submitting AIS feedback: step by step

1. Log into incometax.gov.in — Services — Annual Information Statement (AIS)
2. Find the relevant entry under the applicable category (Salary, Capital Gains, Other Income, etc.)
3. Click the entry — Optional: Provide feedback
4. Select the appropriate feedback type:
   • Information is correct — amount matches your records
   • Information is not fully correct — amount differs; enter the correct amount
   • Information relates to other person/year — misattributed entry
   • Information is duplicate/included in other information — sell-to-cover already in salary
   • Information is denied — entry doesn't relate to you at all
5. Enter a brief explanation (2-3 sentences is sufficient)
6. Submit

AIS feedback is recorded and considered during CPC processing. It does not change what you file — your ITR-2 is filed on the correct figures regardless of what AIS shows. The feedback reduces the probability of an automated mismatch notice.

What happens if you file despite a mismatch

Filing despite an AIS mismatch is normal and expected for RSU holders — the key is to file the correct figures (not the AIS figures) and submit feedback.

The CPC processes your return against AIS automatically:

• Minor differences (under 10%): CPC usually processes without query. The feedback you submitted reduces further scrutiny.
• Material differences (above 10%): CPC may issue a deficiency notice under Section 143(1)(a). Respond within the notice period (typically 30 days) with your explanation (Form 16 + broker statement).
• No response: CPC will adjust your income to match AIS and issue a demand. You can then appeal, but it's easier to respond to the 143(1)(a) notice.

The risk of not submitting AIS feedback is a higher probability of automated scrutiny.

The 3-way reconciliation: AIS vs Form 16 vs ITR-2

Before filing, build this simple table for every income category:

Completing this table before filing gives you a clear audit trail. If CPC issues a 143(1)(a) notice later, this table is the basis of your response.

What to do if AIS feedback is rejected

The ITD portal allows you to submit feedback, but the underlying AIS data is not always updated. This is expected — corrections require the original reporter (your employer, your bank) to file a correction.

If your feedback was submitted but AIS still shows the wrong figure:

1. This does not affect your ITR-2 filing. File based on correct figures regardless.
2. Request your employer (payroll team) to file a correction in Form 24Q if the salary/perquisite amount is wrong.
3. For capital gains mismatches from a non-Indian broker: your feedback + supporting documentation (broker statement) is your evidence. Keep the AIS feedback timestamp and the supporting document.
4. If a notice does come, your AIS feedback timestamp plus Form 16 or broker statement is your documented position.

Foreign income not showing in AIS at all

If you received foreign income (dividends, salary from a US entity, capital gains on foreign shares) and none of it appears in AIS, this is common. AIS relies on Indian reporting sources. Foreign income appears in AIS only if your Indian bank received the credit or your Indian employer included it in a TDS return.

If neither applies — for example, your US employer paid the RSU perquisite directly and didn't file a TDS return with the ITD — then AIS will be blank. You still must report this income in ITR-2. Blank AIS is not an exemption from reporting foreign income.

In this scenario:

• Report salary/perquisite income in Schedule S of ITR-2 based on your pay stubs and employer statement.
• Report foreign capital gains in Schedule CG and Schedule FSI.
• Report foreign dividends in Schedule OS and Schedule FSI.
• File Schedule FA for foreign assets held.
• No AIS feedback is needed for blank entries (blank is not an incorrect entry, just a missing one).

Should you wait for AIS to be corrected before filing?

No. AIS is a reference document, not a filing prerequisite. File your ITR-2 on Form 16 and your broker statements. Submit AIS feedback concurrently or shortly after filing. Waiting for AIS to be updated or corrected can cause you to miss the July 31 deadline (or the December 31 belated return deadline).

The one scenario that does need AIS attention before filing

If AIS shows income you don't recognise — a salary from an employer you didn't work for, a capital gain from shares you didn't sell, a dividend from a company you don't hold — submit AIS feedback marking it as "Information is not correct" or "Information relates to other person" before filing. If you include it in your ITR-2 to match AIS, you overstate income. If you exclude it without feedback, CPC may generate a mismatch notice. The feedback creates a record that you identified the discrepancy.

Quick reference

For the specific case where AIS shows gross RSU sale proceeds that don't match your Schedule CG net capital gain, see the detailed reconciliation guide: Form 26AS vs AIS discrepancy for RSU holders.