India’s Income Tax Department is now powered by artificial intelligence, and it’s reshaping how taxpayer compliance is monitored. The Central Board of Direct Taxes (CBDT) has deployed AI tools to track online behaviour, flag mismatches in filings, and gently push non-filers toward action.
Behavioural Tracking and Red Flags
-
- AI monitors repeated visits to the Annual Information Statement (AIS), often a sign of filing confusion or avoidance.
-
- In FY24, 9 crore returns were filed, but 7.42 crore taxpayers viewed their AIS multiple times—averaging 3.5 visits each.
-
- Over 40 crore AIS were generated from 650 crore financial transactions, forming a vast data pool for pattern detection.
Compliance Nudges and Outcomes
-
- SMS and email nudges led to Rs 963 crore in withdrawn illegitimate claims and Rs 409.5 crore in additional tax collection.
-
- AI flagged cases like Rs 1 crore in FD interest income with no return filed, and HRA claims of Rs 18 lakh against Rs 5,000 monthly rent.
-
- 89 lakh updated ITRs were filed, yielding Rs 9,577 crore in extra taxes.
Strategic Shift and Future Outlook
-
- AI cross-references Form 16, Form 26AS, and AIS to validate deductions and exemptions.
-
- A tiered e-assistance model is being developed for focused, digital-first communication.
-
- The goal is to build a 360-degree taxpayer profile, not to intimidate but to encourage accurate and timely filings.
Sources: Moneycontrol, Indian Express, Economic Times.