The Indian government’s progress in digitalisation is already reshaping the tax landscape, enhancing the ease of doing business and driving efficiencies that taxpayers highly appreciate, according to a survey.
The second edition of Deloitte India’s Income Tax Digitalisation in India survey reveals that India Inc has shown a positive perception towards tax technology and significant trust in the government’s digital initiatives.
India is undergoing a significant transformation in tax digitalisation, with the government’s strong push towards innovation and a taxpayer-friendly ecosystem, the survey report said.
The momentum towards digitalisation has led to the ease of doing business, enhanced efficiencies and reduced time spent on compliance for taxpayers, it added.
Technology-driven tax platforms
Reflecting an increase in technology adoption, the survey highlights that 92% of organisations have either adopted or are planning to adopt technology-driven tax platforms within the next five years, an increase from less than 80% in 2023.
This surge reflects the growing recognition of technology’s potential to streamline compliance, enhance efficiency and future-proof tax operations. Now, taxpayers are comfortable with and are open to exploring new-age technologies, such as AI/ML and GenAI in their tax functions, with more than 50% of organisations expressing confidence in implementing these innovations.
Real-time reporting and compliance monitoring
The survey findings indicated an impressive track record of the government around e-initiatives, raising taxpayers’ expectations. Taxpayers now expect the government to adopt the Standard Audit File for Tax (SAF-T) for a more efficient and faster audit process and open APIs (such as GST) for seamless connectivity. Notably, 74% of respondents expect SAF-T to facilitate near real-time reporting and compliance monitoring. Additionally, 63% of respondents look forward to APIs to streamline data exchange with tax portals.
Highlighting the evolving role of technology in taxation, Rohinton Sidhwa, Partner at Deloitte India, said, “The 2024 Budget’s focus on ‘Viksit Bharat’, with a strong emphasis on innovation and R&D, seeks to continue the transformative change in tax administration. The government’s progress in digitalisation is already reshaping the tax landscape, enhancing the ease of doing business and driving efficiencies that taxpayers highly appreciate.
Deloitte’s survey reveals that 77% of companies have increased their budgets for tax transformation and automation in FY24, up from 67% last year — highlighting the growing recognition of the need for a robust, technology-driven tax ecosystem. Organisations are embracing advanced technologies, such as Robotic Process Automation (RPA), blockchain, GenAI, machine learning, data integration and analytics to accelerate the digital transformation of their tax functions.”
He added, “The Indian government’s announcement to fully digitise the remaining income tax services, including rectifications and appellate orders, within the next two years is a commendable step. This initiative will further enhance the taxpayer experience and make the system more streamlined, transparent and user-friendly.”