Tech helps I-T department recover Rs 36,000 crore

The use of data analytics and advanced technology has helped the income tax department recover ₹36,000 crore from outstanding tax demand in the current fiscal, ET has learnt.

This includes recovery of ₹27,000 crore from corporate tax and ₹9,000 crore from personal income tax till December 20. With one more quarter to go, the department expects the number to go up further by the end of this fiscal year to at least ₹50,000 crore.

"Till December 20, the total recovery from outstanding demand was ₹36,000 crore," a senior official told ET.


The official added that the number can go up as the department has already sent intimation to many taxpayers whose returns reflected a mismatch with their income and the department expects them to file revised returns.

The window for revising or filing a late return for AY 2023-24 closes on December 31. "We have one more quarter to go and recovery may go up to at least ₹50,000 crore," the official said.

India's direct tax collection, net of refunds, stood at ₹13.70 lakh crore till December 17, up 20.66% year-on-year. This included corporate tax of ₹6.94 lakh crore and personal income tax, including securities transaction tax, of ₹6.72 lakh crore. The Centre has budgeted direct tax collection of ₹18.20 lakh crore for the current fiscal.

Technology and Tracking

Officials said technology has made detection of tax evasion much easier. The technology used by the department is a mix of generative AI, advanced AI and machine learning, which is customised for the department and continuously updated every quarter.

"There is a specially designed, automated and enhanced artificial intelligence software program (AI) for scrutinising income tax returns (ITR)," the official said without giving details.

The department receives a lot of information about taxpayers in the form of data from banks, digital financial transactions, stock market and various other financial instruments attached with bank accounts and permanent account numbers.

With so much data available on a single platform, the department is using AI to build regression models to identify deviations and errors in tax filing and separate those deviations for further assessment.

In case a deviation is found, the data is further scrutinised by officials and if they suspect any shortfall in tax payment, an intimation is sent to the taxpayer.