More digital nudges weighed as tax man pushes the compliance

Copyright © HT Digital Streams Limit all rights reserved. News The tax authority will reinforce its interaction with taxpayers by e -mails and SMSs. Summary experts say technology and artificial intelligence-driven ‘nudging’ is a key element of the new tool kit of the tax section. New Delhi: The Income Tax Division is armed with a fierce dose of technology, and intends to increase his ‘nudging’-not-invasive involvement with individuals and businesses for tax supplement, while also preparing to draft his systems and field office to respond more effectively to taxpayers, two people who are informed about the development. The idea is to utilize data and technology, which will make tax compliance more voluntary, impersonal and automatic, a strategy that the department has successfully tested over the past few years, one of the two people said. As a result, the tax authority will increase its interaction with taxpayers through email and SMSs. “The strengthening of information led by the information for voluntary tax compliance and ensuring greater response by the department’s officials is a priority for this year. We are already using this approach to nudging in e-verification of transactions and updating tax return. Read also | Whose money is that? The department has a government financing assets under the e-verification scheme, which is missing the department, or inaccurate data in the tax returns of people, which based on information receiving the authority of its large pool of third-party reporting entities such as banks, financial market players and sub-registrars of property, which work closely. The facility for tax return update within two years of the year in which they were submitted enables judges to clean up their previously unreported or under -reported income in the updated income tax return. The attempt to double these efforts comes after strong direct tax revenue-driving capacity by the technical led tax administration enabled the government to lower the income tax rate and rejig plates for the middle class this year, at a cost for the £ 1 trillion fiscal. The department is expected to help the department to set up non-invasive and data-driven measures to further increase and deepen the tax base. The tax relief was possible due to the strong direct tax revenue -driving capacity seen over the past few years. Read also | Active businesses jump in FY25 with 162,800; Services lead the package, but the industry is attracting more capital in the three years after the financial year 2022 (FY22), with a sharp post-pandemic setback in tax receipts, direct tax revenue-especially the collection of personal income tax revenue was strong. It has grown by 20% in FY23, more than 25% in FY24, more than 20% in FY25, and despite the tax rate announced this year, in the current financial year, is expected to grow by more than 14%. According to experts, technology and artificial intelligence-driven nudging is a key element of the tax department’s tool set. Amit Maheshwari, tax partner at AKM Global, says AMIT MAHESHWARI, tax partner at AKM Global, said the technical, artificial intelligence and data analysis-linked approach were drafted to send personal, transparent emails and SMSs on unreported transactions or faults to taxpayers. “This communication must be clear and educational, and provide step-by-step guidance and pre-use instructions to minimize the reception of notifications after filing. said. Read also | Penalize officers demanding unnecessary documents for GST registration: CBIC “To ensure response, the department must instruct the time-bound grievance correction and clear escalation paths. The collection of feedback by surveys and ratings to interaction can cause continuous improvement,” Maheshwari added. The department has been making strong investments in technology over the past year. Data available from the Ministry of Finance has shown that the department has invested more than £ 3.530 on ‘information, computer and telecommunications’ since 2020. Catch all the business news, market news, newsletters and latest news updates on Live Mint. Download the Mint News app to get daily market updates. More topics #tax #income tax returns #banks #us banks #banksnews #fy25 fiscal plan #fintech #ultratech #technical mint specials