India Inc Wants More Work on Faceless Tax Assessments: Deloitte Report 

Indian companies feel more work needs to be done on faceless tax assessments and appeals, Deloitte India said on Tuesday. The finding was released as part of the second edition of its Survey on Income Tax Digitalisation in India. 

According to the survey report, 62 per cent of the respondents believed that the “objectives of faceless assessment/appeals are partially met and that some more work needs to be done in this area".

Faceless tax assessments under the Income Tax Act allow faceless scrutiny assessments by utilising AI and data analytics to select taxpayers. It was introduced in 2019.  

Speaking at the launch of the report, Rohinton Sidhwa, Partner at Deloitte India, highlighted that companies feel there needs to be more progress on faceless assessments. He said, “The industry has appreciated the government's tech tax initiatives. However, faceless tax assessment is one area where they feel the pace of progress has been slow.” 

The survey said that 92 per cent of organisations have either adopted or are planning to adopt technology-driven tax platforms within the next five years. Notably, 91 per cent of respondents appreciated the speed of processing returns and refunds.  

With digital adoption initiatives on the rise, companies are increasing their investments for tax transformation. As per the survey, 77 per cent of companies have increased their budgets for tax transformation and automation in FY24, up from 67 per cent last year.  

While adoption is on the rise, the report highlighted that there are still some roadblocks. Deloitte India said in a statement that the 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 consultancy firm believes that advancements in AI-driven tax dispute resolution, blockchain for compliance and end-to-end automation will boost efficiency and promote greater transparency.