Finance panel calls for AI checks for tax refunds

New Delhi: The Parliamentary Standing Committee on Finance has flagged a sharp rise in delayed income tax refunds and has recommended artificial intelligence-based risk scoring to separate genuine refund claims from suspicious ones, allowing low-risk cases to be cleared faster.

Refunds taking more than 90 days rose from 12.73 lakh in 2023 24 to 14.18 lakh in 2024 25, and to 26.96 lakh in 2025-26, up to January 31. The panel chaired by BJP leader Bhartruhari Mahtab also highlighted large-scale Goods and Services Tax (GST) evasion and a huge stock of uncollectible tax dues, and has called for technology-driven changes to make tax administration more targeted and less intrusive.

The committee has recommended artificial intelligence-based risk scoring to separate genuine refund claims from suspicious ones, allowing low-risk cases to be cleared faster. Replying to the refund delays, the department said the delays were linked to unvalidated bank accounts, Permanent Account Number and Aadhaar not being linked, adjustment of outstanding demands, high-risk return flags and other statutory checks.


It also cited a surge in bogus deductions and exemptions, which required additional validation before refunds could be released. The panel flagged 1,02,771 GST evasion cases involving ₹6.86 lakh crore, with fake Input Tax Credit claims .