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ITR Processing AY 2023-24: A Closer Look at the Automated Scrutiny with AI

Income Tax Returns (ITR) processing for the assessment year (AY) 2023-24 has undergone significant changes. The Income Tax Department has implemented a specially designed, self-automated, and modified artificial intelligence (AI) software program to scrutinize ITR submissions.


Enhanced Scrutiny Process

The IT Department is now equipped with an advanced AI software program that aims to scrutinize ITR submissions more rigorously than ever before. The system initiates the scrutiny process by collecting data linked to the Permanent Account Number (PAN) of the taxpayer. Subsequently, it automatically cross-references this data with the individual's Aadhar card information.

Income Tax and AI

Comprehensive Data Collection

Once the AI system has established the PAN-Aadhar link, it proceeds to verify the transactions associated with the taxpayer's bank accounts. This includes reviewing details such as fixed deposits, quarterly interests, share dividends, share transactions, and gains from mutual funds and shares. The AI system analyzes all the bank accounts that the taxpayer has declared and attached to their ITR returns.

PAN Linked to Bank

Identification of Undeclared Accounts

In addition to the declared bank accounts, the AI system also identifies any undisclosed bank accounts registered under the taxpayer's name. Furthermore, it scrutinizes joint bank accounts where the taxpayer is listed as the second or third holder. This thorough analysis ensures that all financial aspects are taken into account during the processing of ITRs.

Undisclosed Bank Accounts

Property Transactions and Other Assets

To uncover any undisclosed assets, the AI system checks the PAN card against the government registry office for land and immovable property transactions in the current and previous three years. This step provides a comprehensive picture of the taxpayer's financial standing.

immovable property transactions

Broad Spectrum of Analysis

The AI system goes beyond financial records to scrutinize additional details related to the taxpayer's lifestyle. This includes examining debit card and credit card transactions, as well as scrutinizing passport and visa records for international travel. The system also considers details such as the purchase or sale of two and four-wheelers, ensuring a comprehensive analysis of the taxpayer's financial activities.

Comparison and Verification

After collecting an extensive array of data, the AI system cross-checks it with the information declared by the taxpayer in their ITR. It also verifies the data against Tax Deducted at Source (TDS) information available in 26AS. This meticulous comparison ensures accuracy and detects any discrepancies that may arise during the processing stage.


Calculating Tax Liability

Using the declared and undeclared income, the AI system automatically calculates the taxpayer's factual income tax liability. If any discrepancies or discrepancies are found, a demand notice will be sent to the taxpayer under section 143(i) of the Income Tax Act.

The Power of Automated AI-ITR

This year marks the successful implementation of a foolproof automated AI-ITR program. The system has undergone rigorous testing and refinement to ensure its reliability and efficiency. The introduction of this advanced technology aims to streamline the processing of ITRs and enhance the overall accuracy of tax assessments.


Potential Processing Delays

Due to the introduction of the new AI-ITR program, the income tax processing may experience slight delays. Taxpayers can expect their ITRs to be processed in the last week of July or, at the latest, in the first week of August. These delays are a result of the system's need to process vast amounts of data accurately and efficiently.

Filing ITR with Caution

Considering the enhanced scrutiny brought about by the AI-ITR program, taxpayers who have not yet filed their ITR should exercise caution. It is imperative to ensure accurate and transparent reporting of all financial transactions, including those related to undeclared bank accounts, joint accounts, and property transactions. By adhering to the guidelines and being vigilant while filing their ITR, taxpayers can minimize potential complications or discrepancies during the scrutiny process.

income tax department logo AI

The implementation of an automated AI-ITR program for the assessment year 2023-24 brings increased efficiency and accuracy to the income tax processing system. The introduction of advanced technologies facilitates a comprehensive analysis of taxpayer data, including financial records and other relevant information. By understanding the workings of this new system and filing their ITRs with care, taxpayers can navigate the scrutiny process confidently.


At Taxmarket, we understand the complexity and scrutiny involved in the new automated AI-ITR processing system. As a trusted provider of tax and financial services, we offer specialized assistance to taxpayers for a smooth and error-free ITR filing experience.


Contact us today to learn more about our services and how we can assist you in filing your ITR accurately and efficiently.


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