Tag: Reconciliation

Marketplace Settlement Reconciliation for Amazon and Flipkart Sellers

Selling on Amazon, Flipkart and other marketplaces brings reach and volume, but the money that reaches your bank account rarely matches the sales figure on your dashboard. Commissions, shipping charges, storage fees, GST on fees, tax collected at source, TDS, returns, promotions and reserves all sit in between. Regular e-commerce settlement reconciliation is the only way to know your real margin, claim every credit you are entitled to and keep your GST and income-tax filings consistent.

This guide explains what goes into a marketplace settlement, a step-by-step reconciliation method, a worked example for a single order, and the common leakages sellers recover once they start reconciling properly.

Key takeaways

Reconcile at the order level: each order ID should trace from the order report to the settlement report and then to the bank credit.
Marketplace fees carry 18% GST, which is usually available as input tax credit when the invoices are correctly captured.
GST TCS at 0.5% of net taxable supplies and income-tax TDS at 0.1% under section 194-O are deducted from payouts and must be claimed back through returns.
Returns, customer refunds, RTO shipments and reimbursement claims are where most money is lost if not tracked.
A monthly routine tied to your GST filing calendar keeps the books, returns and marketplace data aligned.

What a marketplace settlement contains

Marketplaces pay sellers periodically, often weekly or more frequently, net of deductions. A typical settlement includes:

Order value: the selling price including GST, and shipping charges collected from customers where applicable.
Marketplace fees: referral or commission fee, fixed or closing fee, shipping or weight handling fee, pick-and-pack and storage fees for fulfilment programmes, and payment collection fees.
GST on fees: charged at 18% by the marketplace on its services.
GST TCS: collected by the marketplace under section 52 of the CGST Act.
Income-tax TDS: deducted under section 194-O (carried forward under the Income-tax Act, 2025).
Adjustments: customer returns, refunds, cancellations, promotional discounts, advertising charges and reserves or holds.
Reimbursements: compensation for lost or damaged inventory and other claims.

Each marketplace provides downloadable order, payment and tax reports. Save them monthly, because older reports can be harder to retrieve later.

A worked example for one order

A seller sells a product at ₹1,180 including GST at 18% (taxable value ₹1,000, GST ₹180). The settlement for this order shows:

Item	Amount (₹)
Order value received from customer	1,180
Less: commission, closing and shipping fees	(200)
Less: GST on fees at 18%	(36)
Less: GST TCS at 0.5% of taxable value	(5)
Less: TDS under section 194-O at 0.1%	(1)
Net amount credited to bank	938

In the books, this should be recorded as:

Sales ₹1,000 and output GST ₹180 (reported in GSTR-1 and GSTR-3B)
Marketplace fees ₹200 as an expense, with ₹36 input tax credit
TCS ₹5 as a receivable, claimed from the electronic cash ledger after it appears in your TCS credit data
TDS ₹1 as advance tax credit, claimed in the income-tax return
Bank ₹938

Most sellers make the mistake of booking ₹938 as sales. That understates turnover, loses the ITC on fees and leaves TCS and TDS unclaimed. Our article on GST for e-commerce sellers explains the TCS mechanism in more detail.

Step-by-step e-commerce settlement reconciliation

Download monthly reports: order or sales report, settlement or payment report, tax invoice reports for fees, returns report and inventory reports for fulfilment stock.
Build an order-level sheet: list every order ID with invoice value, GST, fees, TCS, TDS, adjustments and net settlement.
Match to the bank: group orders by settlement ID and match each payout to the bank credit. Our guide on bank reconciliation best practices covers the bank side.
Verify fees: compare charged fees with the marketplace’s published rate card for the category and weight slab. Flag unusual charges.
Track returns and cancellations: ensure refunded orders are reversed in sales through credit notes, and that returned stock is received back in saleable condition or claimed.
Reconcile GST TCS: match TCS in your records with the TCS data filed by the marketplace, and accept it on the GST portal so the credit reaches the cash ledger.
Reconcile TDS: match 194-O TDS with the tax credit statement before filing the income-tax return.
Book summary entries: post monthly journal entries from the reconciled sheet and keep the working as support.

Common leakages and how to recover them

Weight or dimension disputes: incorrect weight slabs lead to higher shipping fees; raise a correction with the marketplace.
Lost or damaged inventory in fulfilment centres: file reimbursement claims within the marketplace’s time window.
Customer returns not received: a refund issued but no product returned can often be claimed under seller protection programmes.
Duplicate or incorrect fee charges: especially after policy changes or promotions.
Unclaimed TCS and TDS: small per order but significant across a year.
Reserves not released: check that held amounts are released after the holding period.

Sellers who start reconciling regularly often find that recoveries alone cover the cost of the effort. Keep a simple claims log with the order ID, issue, date raised, amount and outcome, so nothing slips past the marketplace’s claim window.

Aligning with GST and income-tax filings

Sales in GSTR-1 should match your order-level data, and the marketplace’s TCS statement should agree with your sales net of returns.
ITC on marketplace fees should reconcile with the invoices appearing in your GSTR-2B.
Turnover in the income-tax return should match GST turnover and the marketplace data reflected in the Annual Information Statement.
Stock in fulfilment centres should be included in closing inventory at the year end.

Frequently asked questions

How often should Amazon and Flipkart settlements be reconciled?

At least monthly, before filing GST returns. High-volume sellers often reconcile weekly with each settlement cycle.

Can I claim ITC on marketplace commission?

Yes, GST charged on marketplace fees is generally available as input tax credit if you are a registered seller and the invoices appear in your GSTR-2B.

How is GST TCS deducted by marketplaces recovered?

It is credited to your electronic cash ledger after you accept it on the GST portal, and can then be used to pay tax or claimed as a refund.

Should I record sales at the net settlement amount?

No. Record sales at the full invoice value and account for fees, TCS and TDS separately, so that turnover, credits and expenses are all correct.

If you sell on marketplaces and would like help setting up a monthly settlement reconciliation, our e-commerce accounting team would be happy to help.

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This article is general information based on the law as of September 2026, and is not legal or tax advice. Please check the facts of your own case with a professional before acting.

November 6, 2026

Annual Information Statement (AIS) and TIS: How to Reconcile Before Filing

The income-tax department now receives a large volume of information about each taxpayer: salary and TDS from employers, interest from banks, dividends from companies, mutual fund and share transactions from registrars and brokers, property purchases from registrars, and much more. All of this appears in the Annual Information Statement. Careful AIS reconciliation before filing is the single most effective way to avoid mismatch intimations and scrutiny questions later.

This guide explains what the AIS and the Taxpayer Information Summary (TIS) contain, how they relate to the tax credit statement, how to reconcile them with your own records, and how to use the feedback facility when something is wrong. A sample reconciliation shows how differences are typically explained.

Key takeaways

The AIS lists information reported by third parties; the TIS summarises it by category and feeds the pre-filled return.
TDS and TCS credits are claimed based on the tax credit statement (Form 26AS, which is Form 168 under the new law for later years), and AIS mirrors this data.
Five feedback options let you confirm, correct, deny or flag information as duplicate or belonging to another PAN or year.
Differences are normal; what matters is that you can explain each one and your return reflects the correct figure.
Reconciling a few weeks before the due date leaves time for deductors or reporting entities to correct errors.

What AIS and TIS contain

The AIS is organised into broad parts:

TDS and TCS information: salary, interest, rent, professional fees, sale of property, and other payments on which tax was deducted or collected.
Statement of financial transactions (SFT): savings and deposit interest, dividends, purchase and sale of shares and mutual funds, cash deposits, credit card payments, and property transactions above reporting thresholds.
Payment of taxes: advance tax and self-assessment tax paid.
Demand and refund: outstanding demands and refunds issued.
Other information: data such as GST turnover, interest on income-tax refunds and information from other government sources.

The TIS aggregates these entries by category (for example, total interest from savings accounts) and shows a processed value and a derived value after any feedback. The pre-filled return uses these figures, which is why reconciling them matters.

You can download both from the income-tax e-filing portal under the AIS section, in PDF, JSON or CSV format.

A step-by-step AIS reconciliation

Download everything: AIS, TIS and the tax credit statement for the financial year.
Gather your records: salary slips and the salary certificate, bank statements and interest certificates, broker capital gains reports, mutual fund statements, rent receipts, property documents and tax payment challans.
Match TDS line by line: compare each deductor, amount paid and tax deducted with your records. Differences here directly affect your credit.
Review SFT entries: check interest, dividends and securities transactions against statements; look for duplicates, joint accounts and transactions of family members reported under your PAN.
Check the year: interest reported on accrual versus receipt, or year-end transactions reported in the wrong year, are common causes of mismatch.
Record your reconciliation in a simple working sheet: AIS value, your value, difference and explanation.
Submit feedback for genuine errors, then file the return with the correct figures.

A sample reconciliation

Item	AIS/TIS value (₹)	Your records (₹)	Difference and explanation
Savings bank interest	42,300	42,300	Matches
Fixed deposit interest	1,86,000	1,24,000	Joint deposit with spouse reported fully under your PAN; your share is 2/3
Dividend	18,500	9,250	Same dividend reported twice (duplicate)
Sale of mutual fund units	6,40,000	6,40,000	Sale value matches; compute gain using cost from statement
TDS on rent (from tenant)	24,000	36,000	Tenant deducted but has not filed one quarter’s TDS statement; follow up for credit

In this example, the return would show the correct fixed deposit interest and dividends, with feedback submitted for the joint deposit and duplicate dividend. For the missing rent TDS, the taxpayer asks the tenant to file or correct the TDS statement, because credit is generally allowed only when it appears in the tax credit statement.

For capital gains, remember that AIS shows sale value, not profit. You still need the purchase cost and dates to compute gains correctly; our guide to capital gains tax rates explains the rates and holding periods.

Using the feedback options

For each AIS entry, you can choose one of the following:

Information is correct
Information is not fully correct – enter the correct amount
Information relates to other PAN or year
Information is duplicate – identify the matching entry
Information is denied – for transactions that do not relate to you at all

After feedback, the modified value appears alongside the reported value, and the derived value in TIS is updated. In some cases, the information is sent to the reporting entity for confirmation. If the source confirms its original figure, you may need to follow up with it directly.

Feedback does not replace filing the correct return. Its value is in creating a record of your explanation, which helps if the department later questions a difference.

What happens if you do not reconcile

If the return shows lower income than the AIS without explanation, the processing system may make adjustments or issue an intimation. Our article on section 143(1) intimations explains how to respond when that happens. Larger unexplained differences can also lead to compliance e-campaigns or scrutiny selection. Reconciling upfront is far easier than explaining later.

Practical tips

Start early: download AIS in June or July; many deductors file corrections around the first quarter due dates.
Watch joint holdings: banks often report joint account interest under the first holder’s PAN.
Check high-value entries: property purchases, large cash deposits and credit card payments are frequently reviewed.
Keep evidence: save the working sheet and supporting statements with the return acknowledgement.
Revisit after filing: AIS is updated during the year; if new information appears, consider whether a revised or updated return is needed.

Frequently asked questions

Is AIS reconciliation mandatory before filing?

It is not a separate legal requirement, but it is strongly advisable, because returns are processed against this data and mismatches can lead to adjustments or notices.

What is the difference between AIS and TIS?

AIS lists individual transactions reported by third parties, while TIS summarises them by category and shows the values used in the pre-filled return.

Will my TDS credit be allowed if it appears in AIS but not in Form 26AS?

Credit is generally given based on the tax credit statement. Both draw from the same TDS data, so check whether the deductor’s statement has been filed and processed correctly.

Can I change AIS feedback later?

Yes, feedback can generally be modified, and the latest submission is considered.

If you would like help reconciling your AIS before filing or responding to a mismatch, our tax team would be glad to assist.

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This article is general information based on the law as of September 2026, and is not legal or tax advice. Please check the facts of your own case with a professional before acting.

November 4, 2026

Month-End Close Checklist: A Faster, Cleaner Close for Growing Businesses

A reliable month-end close checklist is what separates businesses that make decisions on last week’s numbers from those that wait until the auditor arrives. As a company grows, transactions multiply, and without a structured close the books drift: bank balances do not match, GST credits are missed, and management reports arrive too late to be useful.

This article sets out a practical close process for growing Indian businesses, with a day-by-day calendar, the reconciliations that matter most, tax tie-outs, and tips for shortening the close without cutting corners.

Key takeaways

A good close runs on a fixed calendar with a named owner for every task.
Reconciliations of bank, cards, payment gateways, receivables, payables and statutory ledgers are the core of the close.
Book accruals and prepaids every month, not just at year-end, so profit is meaningful month on month.
Tie out GST, TDS and payroll ledgers to returns and portals as part of the close, not as a separate exercise.
Finish with a variance review and a short MIS pack; most businesses can realistically close within about a week.

Why a structured close pays off

A disciplined monthly close delivers benefits well beyond tidy books:

Better decisions: leaders see margins, cash and receivables while there is still time to act.
Fewer tax surprises: GST input tax credit and TDS issues are caught within the same month.
Smoother audits: year-end becomes the twelfth close, not a separate project.
Stronger lender and investor confidence: timely, consistent MIS builds credibility.

A day-by-day month-end close checklist

The calendar below assumes a close target of about seven working days. Adjust it to your size and systems, but keep the sequence.

Day	Focus	Key tasks
Day -2 to 0	Pre-close	Remind teams of cut-off, chase pending bills and expense claims, confirm stock count plans
Day 1	Cash	Import bank and card statements, reconcile all bank accounts and payment gateways
Day 2	Revenue and receivables	Complete invoicing, match receipts, review credit notes and ageing
Day 3	Purchases and payables	Book vendor bills, match with GRNs and POs, reconcile key vendor ledgers
Day 4	Accruals and adjustments	Accrue unbilled expenses and revenue, prepaid amortisation, depreciation, provisions
Day 5	Payroll and tax	Reconcile salary, PF, ESI and TDS ledgers; tie GST ledgers to returns and GSTR-2B
Day 6	Review	Trial balance review, flux analysis, intercompany and suspense clearing
Day 7	Reporting	Finalise MIS pack, commentary and lock the period

Reconciliations that matter most

Cash and bank

Reconcile every bank account, credit card and wallet to the statement balance. Unreconciled items older than 30 days deserve investigation. Payment gateway settlements need special attention: match gross collections, fees, GST on fees and net payouts separately.

Receivables and payables

Review debtor ageing and follow up on overdue balances.
Confirm balances with top customers and vendors at least quarterly.
Clear unapplied receipts and advance payments.
Watch payments to MSME vendors, since delayed payment can affect tax deductions under the income-tax rules on MSME dues.

Statutory ledgers

GST: match output tax with GSTR-1 and GSTR-3B, and input tax credit with GSTR-2B and your actions in the Invoice Management System. Our guides on GSTR-2B vs GSTR-3B reconciliation and the IMS explain how.
TDS: ensure deductions booked equal challans paid and that ledger balances clear each month.
Payroll: reconcile gross salary, deductions and employer contributions to the payroll register.

Inventory and fixed assets

Reconcile stock ledgers with physical counts on a rotating basis, and update the fixed asset register for additions, disposals and capital work in progress.

Accruals, cut-off and adjustments

Many small businesses book expenses only when bills arrive, which makes monthly profit swing wildly. A cleaner approach:

Accrue recurring expenses such as rent, utilities, professional fees and interest even if bills are pending.
Recognise revenue for services performed but not yet invoiced, and defer amounts billed in advance.
Amortise prepaids such as insurance, software subscriptions and annual maintenance contracts.
Charge depreciation monthly from the fixed asset register.
Review provisions for bonus, leave encashment, warranties and doubtful debts.

Keep a standard journal list so that recurring entries are posted consistently every month.

Review and reporting

Before locking the period, review the numbers as a reader would:

Flux analysis: compare each major line with the previous month and budget. Explain movements above a set threshold.
Margin checks: gross margin by product or service line should be within expected ranges.
Balance sheet sense check: no unexpected negative balances, suspense or clearing accounts at nil or explained.
Cash view: closing cash, receivables and payables, with a short forward look.

A compact MIS pack usually includes a profit and loss statement with budget comparison, balance sheet, cash flow summary, receivable and payable ageing, and three to five key performance indicators with commentary.

Tips for a faster close

Automate bank feeds and use rules for recurring transactions.
Close sub-ledgers continuously: reconcile banks weekly, not monthly.
Use templates for reconciliations, accruals and MIS so work is repeatable.
Set materiality: do not delay the close for small items; accrue and adjust next month.
Lock periods after closing to prevent back-dated entries.
Document the process so that it does not depend on one person.

Outsourcing parts of the close to an experienced team can also bring discipline and continuity, especially for businesses without a full in-house finance function.

Frequently asked questions

How long should a month-end close take?

It depends on size and systems, but many growing businesses can close within five to eight working days with a clear calendar, automated feeds and standard templates.

What is the most important step in the month-end close?

Bank and cash reconciliation. If cash is right, most other errors surface quickly during the rest of the close.

Should small businesses book accruals every month?

Yes, at least for significant recurring items. It makes monthly profit meaningful and avoids a large catch-up at year-end.

Can GST and TDS reconciliations be part of the close?

They should be. Tying statutory ledgers to returns and GSTR-2B every month prevents missed credits and notices later.

If you would like help designing a reliable month-end close or running it for your business each month, our accounting team would be happy to assist.

WhatsApp +91 83687 74072

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This article is general information based on the law as of September 2026, and is not legal or tax advice. Please check the facts of your own case with a professional before acting.

October 27, 2026