This AI Scrutiny system has been successfully finalized and tested, and it will be implemented for the first time this year before before any tax refund.
Income Tax Refund: This year, taxpayers should be prepared for delays in their income tax refunds. The government has implemented a new, rigorous system for scrutinizing income tax returns (ITRs) using a specially designed, self-automated artificial intelligence (AI) software program.
Advanced AI for Comprehensive Examination
The new AI program is meticulously designed to verify the accuracy of all information provided in your ITR. Here’s a detailed look at how the system operates:
- Data Collection and Cross-Referencing
- Data Gathering: The AI will first collect all data linked to your PAN card.
- Cross-Referencing: It will then cross-reference this data with information associated with your Aadhaar card.
- Transaction Tallying: Subsequently, the AI will tally transactions linked to both your PAN and Aadhaar with the bank accounts you’ve declared.
- In-Depth Financial Analysis
- Details Collection: The program will gather details of your fixed deposits, quarterly interest credits, share dividends, share transactions, and both long-term and short-term gains from mutual funds and shares.
- Undeclared Accounts Scrutiny: It will scrutinize undeclared bank accounts in your name, including joint accounts where you are listed as a second or third holder.
- Additional Searches: Additionally, the AI will search for postal accounts, cooperative bank accounts, local credit institutions, and various postal savings schemes, both single and joint, especially those involving family members who are not registered ITR filers.
- Property and Transaction Verification
- Registry Office Verification: The AI will verify your PAN card with government registry offices to identify any land and immovable property transactions over the past three years.
- Comprehensive Review: It will also review your debit and credit card transactions, passport and visa records, and vehicle purchase or sale history.
Comparison with Filed Data
All collected data will be meticulously compared to the information declared in your ITR, including cross-checking with the TDS data in Form 26AS. The program will automatically calculate any discrepancies in declared and undeclared income and issue a demand notice under Section 143(1) if inconsistencies are found.
Implementation and Impact on Refunds
This AI-ITR program has been successfully finalized and tested, and it will be implemented for the first time this year before making any tax refund. Due to the comprehensive nature of this new system, the processing of ITRs and tax refunds will be delayed this year. It is expected that all returns will be processed by the last week of July or, at the latest, the first week of August.
Advice for Taxpayers
Given the thorough scrutiny, it is crucial for those who have not yet filed their ITR to ensure all information is accurate and complete.
Summary
While the new AI system aims to enhance the accuracy and fairness of tax assessments, it will result in some delays in processing refunds. Taxpayers should remain patient and ensure their filings are precise to avoid any complications.
In conclusion, the introduction of this AI scrutiny system marks a significant step towards more accurate and fair tax assessments. By understanding how the system works and ensuring all details are correctly filed, taxpayers can navigate these changes smoothly.
Also Read: Consequences of ITR Filing after the Deadline of July 31, 2024
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