AI Tools Helped Income Tax Department Collect Rs 11,000 Crore in 4 Years: CBDT Chairman

Last updated: 26 July 2025

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India's Income Tax Department has successfully used Artificial Intelligence (AI) tools to boost tax compliance, collecting an extra Rs 11,000 crore over the past four years. These AI systems helped over a crore taxpayers voluntarily update their returns. The technology has also been instrumental in uncovering Rs 29,000 crore in undisclosed foreign assets and Rs 1,000 crore from virtual digital assets in the last fiscal year, signalling a shift towards a more data-driven and less intrusive tax enforcement approach.

Artificial Intelligence (AI) is revolutionizing tax compliance in India. Over the last four years, the Income Tax Department has leveraged a suite of AI tools to nudge more than one crore taxpayers to voluntarily update their returns, resulting in Rs 11,000 crore in additional tax collections. This data-driven approach has also helped identify Rs 29,000 crore worth of previously undisclosed foreign assets and Rs 1,000 crore in foreign income from virtual digital assets (VDAs) during FY 2024-25,

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FAQ :

The Income Tax Department has collected an additional Rs 11,000 crore over the last four years through AI-assisted voluntary return updates.

NUDGE (Non-Intrusive Usage of Data to Guide and Enable) is a system that sends non-threatening emails or SMSs to taxpayers whose filings appear suspicious or incomplete, encouraging them to voluntarily update their returns.

Over one crore taxpayers have updated their returns between 2021-22 and 2024-25 as a result of the NUDGE initiative.

AI has helped identify Rs 29,000 crore worth of previously undisclosed foreign assets and Rs 1,000 crore in foreign income from virtual digital assets during FY 2024-25.

AI tools scan records of taxpayers who haven't filed returns, comparing them against Annual Information Statements to determine who ought to be filing.

Yes, a targeted NUDGE campaign in early 2025 focused on political donation deductions claimed under Section 80GGC, leading to amended returns and additional tax revenue.

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CCI News Desk

Finance news reporter covering taxation, GST, income tax, business compliance, and economy updates. I simplify complex financial topics into easy-to-understand articles for professionals, taxpayers, and business owners on leading finance and tax platforms.

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