India Inc. Adopting Tax Digitalisation, Expect SAF-T To Drive Real-Time Reporting: Survey
Over nine in 10 organisations have either adopted or are planning to adopt technology-driven tax platforms.
India Inc. has shown a positive perception towards tax technology and trust in the government’s digital initiatives. The momentum towards digitalisation has led to the ease of doing business, enhanced efficiencies and reduced time spent on compliance for taxpayers, according to the second edition of Deloitte India’s Income Tax Digitalisation in India survey.
The survey showed that 92% of organisations have either adopted or are planning to adopt technology-driven tax platforms within the next five years, an increase from less than 80% in 2023. This increase reflects the growing recognition of technology’s potential to streamline compliance, enhance efficiency and future-proof tax operations.
Taxpayers are embracing new-age technologies, such as artificial intelligence/machine learning and generative AI in their tax functions, with more than 50% of organisations expressing confidence in implementing these technologies.
Taxpayers expect the government to adopt the Standard Audit File for Tax for improving the audit process and open APIs (such as GST) for connectivity. Notably, 74% of respondents expect SAF-T to facilitate near real-time reporting and compliance monitoring. Additionally, 63% of respondents look forward to APIs to streamline data exchange with tax portals.
The use of third-party tax software and cloud-based solutions has increased, with 69% of respondents—up from 57% in 2023—confirming their adoption of these tools. The growing reliance on third-party solutions reflects an increasing comfort with cloud technologies, which provide secure and scalable options for managing tax compliance.
Businesses are also focusing on streamlining TDS/TCS compliance. Around 70% of respondents now advocate for tech-driven solutions in this area, an increase from 49% in the previous year. Implementing technology can also facilitate the resolution of cases on grievance portals, automate reconciliation processes, track the progress of appeals and rectification applications, and expedite the issuance of refunds or deletion of demands.
Despite advancements, organisations face challenges with tax digitalisation. Key obstacles include a shortage of skilled tax technology professionals, bandwidth constraints, resistance to adopting new technologies, and difficulties integrating existing systems with external solutions or government portals.
The survey identified advancements in AI-driven tax dispute resolution, blockchain for compliance, and end-to-end automation as future trends in tax digitalisation.
