Earlier this week, Finance Minister Nirmala Sitharaman announced that India would soon be using artificial intelligence and machine learning for tax processing later this year. The implementation is set to start from October this year, making India of the first countries use AI technologies for public tax assessment. 

The decision comes after the Steering Committee on FinTech and related issue constituted by the Ministry of Finance, and Department of Economic Affairs, submitted its final report to Mrs Sitharaman this week. The Committee has recommended the Department of Financial Services (DFS) to work with PSU banks to bring in more efficiency to their work and reduce fraud and security risks, especially considering the rapid pace at which technology is being adopted primarily by private sector financial services, reports Analytics India Magazine.

The recommendations also included that significant opportunities could be explored to increase the levels of automation using AI, cognitive analytics and machine learning in their back-end processes.

The move is aimed to curb corruption and to bring transparency to the tax assessment process more. Furthermore, it will also make it easier for the taxpayer to respond to any income tax notice as well. Currently, a pilot project has been implemented by the income tax department in a few of the major India cities before expanding pan India.