Despite accurately filing your Income Tax Returns ( ITR ) for the current assessment year, your tax refund may be delayed.
This year, taxpayers should anticipate delays in receiving their income tax refunds. The government has introduced a stringent new method for reviewing ITRs that employs a specially designed, self-automated artificial intelligence ( AI ) software program.
Advanced AI for Thorough Examination
The new AI system is designed to meticulously verify the accuracy of the information in your ITR. Here’s a detailed explanation of how the system operates:
Data Collection and Cross-Referencing
The AI will initially gather all information related to your PAN card. It will then cross-reference this data with your Aadhaar card information. The AI will reconcile transactions linked to both your PAN and Aadhaar with the bank accounts you’ve specified.
Detailed Financial Analysis
The program will collect information about your fixed deposits, quarterly interest credits, share dividends, share transactions, and long-term and short-term gains from mutual funds and stocks. It will check for unreported bank accounts in your name, including joint accounts where you are designated as a second or third holder. Additionally, the AI will examine postal accounts, cooperative bank accounts, local credit institutions, and various postal savings plans, both individual and joint, especially those involving family members who are not registered ITR filers.
Verification of Property and Transactions
The AI will compare your PAN card to government records to detect any land and immovable property transactions in the last three years. It will also check your debit and credit card transactions, passport and visa information, and the buying or selling history of your vehicle.
Comparison with Filed Data
All obtained data will be rigorously compared to the information provided in your ITR. This involves cross-checking with the TDS data on Form 26AS. If there are any discrepancies between reported and undeclared income, the computer will automatically calculate the difference and issue a demand notice under Section 143(1) of the Income Tax Act.
Implementation and Impact on Refunds
This AI-ITR program has been completed and tested, and it will be deployed for the first time this year. Due to the comprehensive nature of this new system, ITR processing will be delayed. All returns are expected to be processed by the end of July, or no later than the first week of August.
What can Taxpayers Do?
Given the extensive nature of the AI scrutiny, those who have not yet submitted their ITR should ensure that all information is accurate and complete before filing the same. While the new AI system promises to enhance the accuracy and fairness of tax assessments, it will cause some processing delays for refunds. To minimise issues, taxpayers should exercise patience and ensure that their Income Tax filings are accurate.
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