India leverages trillions of financial transactions by building AI, Machine Learning data center

By ridhigrg |Email | Sep 3, 2019 | 3606 Views

India is building a large AI machine learning data-center that can crunch through trillions of financial transactions per hour to process income tax returns of India's billion-strong income tax assessee base. India's Income Tax Department has relied on human tax assessment officers that are randomly selected by a computer to assess tax returned filed by individuals, in an increasingly inefficient system that's prone to both evasion and corruption. India has already been using machine learning since 2017 to fish out cases of tax-evasion for further human scrutiny. The AI now replaces human assessment officers, relegating them up an escalation matrix.

The AI/ML assessment system is a logical next step to two big policy decisions the Indian government has taken in recent years: one of 100% data-localization by foreign entities conducting commerce in India; and getting India's vast population to use electronic payment instruments, away from paper-money, by demonetizing high-value currency, and replacing it with a scarce supply of newer bank-notes that effectively force people to use electronic instruments.

Contributing to these efforts are some of the lowest 4G mobile data prices in the world (as low as $1.50 for 40 GB of 4G LTE data), and low-cost smartphone handsets. It's also free to open a basic bank account with no minimum balance requirements.

The tax-assessment AI doesn't just sniff for discrepancies in tax-returns between an assessee and its own taxable-income figure derived from crunching the person's financial-transactions and data but is also capable of engaging in a meaningful questionnaire with a human assessee. It can build questions specific to certain transactions, as a human tax assessment officer scrutinizing your tax returns would and can understand your natural language answers like a human would. It's also capable of understanding documentary proof submitted by the assessee as part of the questionnaire. If it's satisfied with your answers, it is legally empowered to close the case on your tax assessment discrepancy or invoke human officers to take up further questioning and prosecution. The AI doesn't have judicial powers to prosecute someone for tax-evasion, yet.

Understandably, nobody is happy with this. High-ranking government officials within India's Finance Ministry think that the AI could be detrimental to the country. "The whole objective of the faceless assessment is based on the premise that tax officers are corrupt and harass taxpayers. This is not only a biased notion but also undermines the genuine work of the tax department," a senior government official said. "It is not clear how these advanced technologies will help solve [problems with taxation]. In fact, they pose a greater risk of high-pitched assessment because tax officer not being interested in hearing out the assessee and will instead rely on only computer data," they added.

Source: HOB