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Apr 17, 2025
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Income Tax Department monitoring your financial transactions with AI – check details
The Income Tax Department has continuously been expanding the scope of monitoring tax evasion. Tax officials have scaled up the use of Artificial Intelligence (AI) and data analytics to enhance tax compliance and detect discrepancies in financial behaviour.
Now if you invest a large amount, buy property, or spend more than you spend on credit card, all these transactions are being monitored by the tax department, say tax experts.
Banks, mutual fund companies, registrars and other financial institutions give the ‘Statement of Financial Transaction (SFT)’ report to the department every year, which contains information about your high value transactions, according to CA (Dr.) Suresh Surana. Now this data is being combined with Income Tax Return (ITR), TDS, GST, and foreign transactions — and this is how it is being decided whether there is any irregularity in your income and expenses, Surana adds.
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