Reinventing Itr Ranking with Algos doing the work for reviewers
Currently, it takes human effort, more human emotions, and extended deadlines on the part of the tax authorities to complete an annual income tax return (ITR). And the scam continues quarterly for the prepayment of tax.
For employees, the annual RTI requires collecting their form-16 and all investments in a 26A. It is not only about that, but also about bringing together all the equity portfolios and transactions made in the past financial year etc. And then either fill out the RTI yourself or get professional help. What may be a simple tech-driven exercise seems like a painful chore or even a painful rip-off.
Automation and data governance
In recent years, we have seen an improvement in the speed of RTI reviews and the associated reimbursement process.
Recently, evaluations and refunds are done in less than two weeks! This is to congratulate the digitization of files and the creation of a national framework for monitoring salaries, investments (including bank FDs, mutual funds, debt holding, insurance, etc.) . With this improved ability to track financial transactions of various asset classes, with PAN (Permanent Account Number) as a unique identifier, it is now up to data governance to determine how we can deliver increased benefits to citizens.
Regulators and Data Sets
Globally, regulators are increasingly turning to big data sets (including structured financial data, payment transactions, unstructured granular data, including that from the internet) and analytics. to provide new information, improve the quality of their risk assessments and forecasts. Over 70 countries have adopted XBRL as the standard data format for data governance, while in India we have elements of this adoption and have yet to realize its full potential.
Imagine if, as an individual taxpayer, you have nothing to do!
The principle behind this idea is to trust the data framework (and expand better coverage of all possible asset classes) and to facilitate citizens’ relationships with economic regulations.
This can make the exercise of individual contributions completing their computer declarations simply redundant and save a lot of collective time! Most importantly, it can catalyze the shift to a digital-only asset transaction flow along with all borrowing, gifts, etc.
Imagine if this idea, once feasible, will automatically be able to calculate if an additional tax is payable or if a refund is due and credit the amount directly to the account of the appraised. This may result in a scenario where by April 15 of each year, the machine-based computer assessments can be completed for the previous fiscal year and sufficient time is allowed for differential taxes to be paid or for any appeal to be made. do. A stark contrast to the current scenario of waiting months for citizens to file an RTI. The same logic can apply for the withholding tax calculation each quarter!
The happiest would be the computer reviews and the GoI. Most affected, from a short-term livelihood perspective, would be the service industry that thrives in the complexity or fear of the RTI process – the service providers who help file RTI!
Of course, this exercise of converting rules into algorithms and building a secure platform will require effort; skills for which are available in abundance in India.
It is not a question of whether this idea is possible.
That’s roughly when can we see this in action.
– The author, Srinath Sridharan, is a business advisor and independent market commentator. Opinions expressed are personal
(Edited by : Anshul)
First publication: STI