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India will become 1st Country to deploy artificial intelligence (AI) and machine learning (ML) will check tax returns and scrutiny, without human interface


India will become 1st Country to deploy artificial intelligence (AI) and machine learning (ML) will check tax returns and scrutiny, without human interface

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India will become 1st Country to deploy artificial intelligence (AI) and machine learning (ML) will check tax returns and scrutiny, without human interface

 

Come October and you will see a major change in the way Tax returns are checked by CPC and selected for Scrutiny and finally adopt faceless assessment system.

 

India will soon become the first country to deploy artificial intelligence (AI) and machine learning (ML) in the tax assessment process, as the Finance Minister Nirmala Sitharaman has promised

 

According to official sources, the government is very particular about the deadline of the implementation. In this regard, the revenue secretary Ajay Bhushan Panday held a meeting of officials of the Ministry of Corporate Affairs (MCA) and various tax agencies as per sources

 

The government has set the deadline of October 2019, for the implementation of AI and ML for the assessment purposes. Now data in the income tax return, statement of financial transactions and from other sources will be analysed as per the pre-defined risk criteria.

 

If there is any mis match, then scrutiny will be done using e-verification where a structured questionnaire will be sent. If the answer is okay, the case will get closed. If not, AI will send the case to the officer for further investigation, which will proceed using the faceless electronic portal. Traditionally, the tax officer asks for docs and follows a line of investigation.

 

So in case you have multiple form 16 and you have shown income from only one employer, the AI will automatically select your case for scrutiny and send you list of questions to be answered online with option to upload the documents for verification, like Form 16, Bank Statements and declarations.

 

The government is also planning to integrate data from MCA (for Companies and LLP) , Central Board of Direct Taxes (Income Tax Returns) and GST within a year -- which may be likely to be announced in the next year’s budget. However, many officials in the Finance Ministry believe that using AI and ML in the tax assessment purposes can be detrimental to the country. The whole objective of the faceless assessment is based on the premise that tax officers are corrupt and harass taxpayers. This is not only a biased notion but also undermines the genuine work of the tax department,” a senior government official said as per reports in various news media.

 

“It would be interesting to see how faceless scrutiny is implemented as it would require lot of infrastructure and resources. Department and tax professionals needs training and it should be implemented in phase manner” says CA Chirag Chauhan

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