We have compared the spectral aerosol optical depth (AOD, τλ) and aerosol fine mode fraction (AFMF) of Collection 004 (C004) derived from Moderate‐Resolution Imaging Spectroradiometer (MODIS) on board National Aeronautics and Space Administration's (NASA) Terra and Aqua platforms with that obtained from Aerosol Robotic Network (AERONET) at Kanpur (26.45°N, 80.35°E), India for the period 2001–2005. The spatially‐averaged (0.5° × 0.5° centered at AERONET sunphotometer) MODIS Level‐2 aerosol parameters (10 km at nadir) were compared with the temporally averaged AERONET‐measured AOD (within ± 30 minutes of MODIS overpass). We found that MODIS systematically overestimated AOD during the pre‐monsoon season (March to June, known to be influenced by dust aerosols). The errors in AOD at 0.66 μm were correlated with the apparent reflectance at 2.1 μm (ρ*2.1) which MODIS C004 uses to estimate the surface reflectance in the visible channels (ρ0.47 = ρ*2.1/4, ρ0.66 = ρ*2.1/2). The large errors in AOD (Δτ0.66 > 0.3) are found to be associated with the higher values of ρ*2.1 (0.18 to 0.25), where the uncertainty in the ratios of reflectance is large (Δρ0.66 ± 0.04, Δρ0.47 ± 0.02). This could have resulted in lower surface reflectance, higher aerosol path radiance and thus lead to overestimation in AOD. While MODIS‐derived AFMF has binary distribution (1 or 0) with too low (AFMF < 0.2) during dust‐loading period, and ∼1 for the rest of the retrievals, AERONET showed range of values (0.4 to 0.9). The errors in τ0.66 were also high in the scattering angle range 110°–140°, where the optical effects of nonspherical dust particles are different from that of spherical particles.