The Central Board of Direct Taxes (CBDT) is intensifying its efforts to combat tax evasion by leveraging advanced data analytics and artificial intelligence (AI), as stated by Chairman Ravi Agrawal in a recent interview. This initiative comes ahead of the anticipated approval of a new income tax law in the current parliamentary session.
With access to a staggering 6.5 billion domestic digital transactions and collaboration with international agencies for information exchange, the Income Tax Department is positioned to detect tax evasion more adeptly, according to Agrawal.
He addressed concerns regarding the authority’s access to digital data, clarifying that such powers are strictly limited to search and seizure operations in cases where taxpayers decline to share their information, rather than being used for unnecessary surveillance of ordinary citizens.
“The next stage of AI implementation will be more comprehensive, with reporting agencies contributing increasingly advanced data for in-depth analytics to pinpoint tax evaders,” he remarked.
The Income Tax Department is actively engaging with taxpayers by providing insights into their financial transactions to foster voluntary compliance. Since the launch of this initiative on April 1, 2022, approximately 11 million revised returns have been submitted, leading to a tax collection increase of over Rs 11,000 crore.
A recent initiative resulted in the retraction of tax deduction claims amounting to Rs 963 crore, alongside the collection of an additional Rs 409.50 crore in taxes from April 1, 2023, to June 18, 2025. Furthermore, between November 2024 and March 31, 2025, 30,161 taxpayers declared foreign assets totaling Rs 29,208 crore and reported foreign income of Rs 1,089 crore.
“This success was driven by our analytical capabilities,” Agrawal shared. “We managed to conduct a nationwide operation effectively.”
He emphasized that the tax authorities are non-intrusive and serve as facilitators, while maintaining vigilance. A similar awareness campaign using new data is set to launch this year.
Agrawal remarked on the improvement in data quality received through various information-sharing agreements over the past two years. “The enhancement in the quality of information is noteworthy, as these entities are now better equipped to meet our needs, aiding us in identifying taxpayers with foreign assets,” he explained.
There is a commitment to continual updates as technology progresses, particularly in addressing emerging areas such as the dark web, cryptocurrencies, and other novel transaction methods.
“India is actively involved in global discussions regarding the Crypto-Asset Reporting Framework,” Agrawal added. “Our country’s perspective is being acknowledged on these platforms, and we are evaluating the most effective ways to exchange information, which has already been facilitated through regulatory measures.”
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