Overview

• The Parliamentary Select Committee’s report, featuring over 300 recommendations, has been tabled in Lok Sabha and triggers rule-making and departmental capacity-building ahead of the law’s April 1, 2026 rollout.
• The CBDT is finalizing SOPs and a digital evidence manual to ensure tax officers redact non-pertinent personal data when accessing emails, messaging apps and other digital spaces.
• Using AI and data analytics, the Income Tax Department tracks taxpayer behaviors—such as repeated Annual Information Statement views and high-value transactions—to nudge non-filers and correct return errors.
• Computer-Aided Scrutiny Selection remains an identity-blind, fully automated system that selects roughly 0.3% of returns for audit, with planned enhancements to risk-rule analytics using 6.5 billion transaction data sets.
• Tax authorities plan a more intense AI-led crackdown on evasion by leveraging mature data sets and expanded international information exchanges, including the OECD’s Crypto-Asset Reporting Framework to trace offshore holdings.