Artificial intelligence to track income tax evasion: Penalty will be imposed if you cheat in income tax, AI will catch tax evaders
Artificial intelligence to track income tax evasion: The power of Artificial Intelligence (AI) is being seen everywhere. Since the advent of ChatGPT, it technology Has become more popular. The impact of AI is increasing continuously in our lives as well. Whether it is changing the channel by speaking while watching smart TV or searching for something by speaking on mobile, AI is being used everywhere. Now the Income Tax Department has recognized its power. The IT department is using AI to detect irregularities in income tax.
The benefit of artificial intelligence is being taken in different sectors. The Income Tax Department has also taken the help of AI. AI is being used to identify tax evaders. Let us see how AI catches taxpayers hiding their income.
AI catches tax evasion like this
A lot of wrong things are said about AI, but many correct results have also come to the fore. One of the biggest features of AI is ‘Pattern Recognition’. This means that if a task is done in a certain way, the AI catches on immediately. AI can detect if taxpayers evade tax in a particular way while filing income tax.
IT department will send notice
According to a Moneycontrol report, the IT department has issued notices to many salaried taxpayers. All these notices have been sent by the department between March 20 and June 10. After re-examining several income tax returns, action has been taken to issue the notice. The Income Tax Department is especially focusing on the exemption available under donation.
Tax exemption is available on a donation
In the financial year 2019, more attention is being given to donations given to political parties and charitable trusts. Under Section 80G of the Income Tax Act, of 1961, taxpayers can claim 50-100% tax exemption on donations made to political parties and charitable trusts. On the other hand, the IT department has sent notices under sections 138 and 148(A) to several hundred people who have claimed section 80G exemption.
AI has identified several taxpayers who have claimed donations in FY 2019. Some of them have shown huge donations to get more discounts. Now these taxpayers will have to provide proof related to donation. If they fail to do so, they will have to pay the penalty mentioned in the notice. A 50-200% penalty may have to be paid for not proving the transaction.