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. Your Indian employer may have reported the income in a way that doesn't flow cleanly into AIS's salary category.

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. The ITD sees "Indian resident sold X shares of Company Y for $Z" and reflects it in the Capital Gains section of AIS.

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 NRE/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 on the relevant entry: "This is the net dividend after US withholding. Gross dividend is ₹[X] 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.

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

Scenario	File on	AIS feedback action
AIS salary ≠ Form 16	Form 16	"Information is partially incorrect — correct amount is ₹X per Form 16"
AIS shows no RSU income	Broker statement + Form 16	No feedback needed (blank AIS entry is not flagged by CPC)
AIS shows sell-to-cover as capital gain	Exclude from Schedule CG	"Duplicate — sell-to-cover included in salary perquisite"
AIS shows net dividend only	File gross dividend; claim FTC	"Partial — gross is ₹X; net shown is after US withholding"
AIS shows unrecognised income	Don't include in ITR-2	"Information is incorrect / relates to other person"