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I-T dept leverages tech to scrutinise tax returns, recovers Rs 36,000 cr

With one more quarter to go, the income tax department expects the recovery amount to further rise to Rs 50,000 crore by the end of the financial year


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BS Web Team New Delhi

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The income tax (I-T) department is leveraging data analytics and advanced technology to detect discrepancies in income tax returns. Technology has enabled the income tax department to recover Rs 36,000 crore from outstanding tax demand in the ongoing financial year, according to The Economic Times (ET). This amount includes Rs 27,000 crore recovered from corporate tax and Rs 9,000 crore from personal income tax till December 20, 2023. With one more quarter to go, the income tax department expects the recovery amount to further rise to Rs 50,000 crore by the end of the financial year.

Tax recovery likely to go up

A senior official told ET that the I-T department expects the tax recovery to rise as it has already sent several notices to several taxpayers. The notices have been sent to taxpayers whose tax returns reflect a mismatch with their income. The department expects these individuals to file revised returns.

The window to file a revised or late tax return for assessment year 2023-24 (AY24) closes on December 31.

India's direct tax collections

India's direct tax collections stood at Rs 13.70 trillion till December 17, which is 20.66 per cent more than the collections last year. This included corporate tax of Rs 6.94 trillion and personal tax, including securities transaction tax of Rs 6.72 trillion. For the financial year 2023-24, the government expects a direct tax collection of Rs 18.20 trillion.

ALSO READ: Income Tax dept notifies ITR forms 1, 4 for assessment year 2024-25

Officials told ET that technology has made it easier for the authorities to detect any tax evasion. The technology used by the tax department leverages generative artificial intelligence (AI), advanced AI, and machine learning. The technology has been customised for the department and is updated every quarter.

Talking about the scrutiny of income tax returns, an official told ET, "There is a specially designed, automated, and enhanced artificial intelligence software program to analyse income tax returns (ITRs)."

Data used by the I-T department

The department accesses crucial information about taxpayers in the form of data from banks, digital financial transactions, the stock market, and other financial instruments attached to bank accounts and permanent account numbers (PAN).

The I-T department analyses this data on a single platform by using AI to build regression models to identify deviations and errors in tax filing. The department separates the returns with deviations and keeps them for further assessment.

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First Published: Dec 28 2023 | 12:29 PM IST

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