Use of tech, AI aiding direct tax compliance, says CBDT Chairman

Around 44 lakh e-mails were sent to taxpayers in December for mismatches between their declared income and financial transactions based on technology-based risk assessment, Central Board of Direct Taxes (CBDT) Chairman Nitin Gupta said. With the use of technology, including artificial intelligence and changes in the law, the possibilities of tax evasion have been plugged to a great extent and have helped in improving tax compliance, Gupta said in a post-budget interview to The Indian Express.

“New technology is used everywhere. We shot off around around 44 lakh emails in December to those (taxpayers) where the returned income and financial transactions were having some sort of mismatch based on the risk-assessment analysis. Just nudging the taxpayers that this is what we are finding, please check whether you have rightly disclosed your income in the return of income,” Gupta said.

The higher buoyancy in direct tax revenue, as outlined in the Budget 2024-25 presented recently, has come mainly on the back of technology along with other measures being taken to plug leakages, Gupta said. “There are a multitude of factors. One is the use of technology for the data which is available with us, and its disclosure to the taxpayer through AIS (Annual Information Statement), and then, we are prefilling returns… we have also done quicker processing, quicker issue of refunds, there is better taxpayer confidence in the tax department. Changes have been made in the law in the sense that whatever were the possibilities of evasion, I’m using this word, they’ve been plugged to a great extent. So the taxpayer is expected to not to resort to those methodologies (for evasion),” he said.