India's tax administration has travelled a long way from physical ledgers and manual filings to a digital-first regime. Yet, as with any major transition, this digital evolution has also introduced new challenges.

Tech disruptions Glitches often cause login failures, delayed acknowledgements, system timeouts and non- processing of payments, forcing valuable manpower to be diverted toward resolving system-related hurdles. Recent instances include retrieval issues on the I-T portal during the September deadline, prolonged outages on GST portals earlier this year, and errors requiring the filling of B2B HSN details despite no B2B supplies. These disruptions not only affect compliance timelines but also increase stress and uncertainty for businesses and tax professionals alike.

Delay in release of forms & utilities Another recurring concern is the delay in the release of essential forms and utilities, despite legal provisions being in effect. This creates compliance uncertainty and adds an administrative burden for both taxpayers and professionals. It can also erode trust in the system, discouraging timely filings and careful adherence.

For example, utilities for filing ITRs, audit reports and GST annual returns have not yet been made available. Similarly, in the GST regime, invoice-wise reporting in GSTR-7 - introduced earlier this year - only became fully functional recently. The rectification mechanism notified last year was also made available just this year. These delays generate compliance backlogs but also increase the risk of unintended defaults, even when taxpayers intend to comply.

Inconsistencies in auto-populated data Use of auto-populated data in departmental systems, such as Annual Information Statement (AIS) or Directorate General of Analytics and Risk Management (DGARM) reports, is a welcome step towards simplifying compliance and enhancing transparency. However, inconsistencies continue to arise. For instance, in AIS, the same immovable property transaction may appear twice, leading to inflated disclosures.

Similarly, in capital markets, securities transactions reported by depositories do not always align with broker statements due to differences in reporting conventions. On the GST side, system-generated reports sometimes misclassify credit notes as debit notes, commit errors in data consolidation, or overlook nuances in composition and return filing schemes, impacting the accuracy of analytics.

India's digital tax platforms are essential for the future. But for tech to harness its potential, it must be adaptive, empathetic and responsive to human realities. While the intent behind digital governance is commendable, execution must be strengthened through robust infra, proactive testing and real-time support to ensure productivity is not compromised. Further, digital forms and utilities should be deployed in a timely manner to safeguard the system's integrity and reliability, foster greater confidence among taxpayers and professionals, and enhance productivity and effectiveness in tax administration.

To ensure this, the following steps are critical:

Integration of human oversight and intervention Automated tools such as AIS or DGARM should act as preliminary filters, not final arbiters. A tiered review process should be implemented whereby potential anomalies, such as duplicate records, value mismatches or other similar inaccuracies, are mandatorily escalated for human examination, reducing the risk of mechanical errors.

Periodic audits and accountability Just as companies are required to audit their financial systems, GoI should mandatorily review the accuracy and reliability of its digital tax infrastructure. The identified flaws, including those raised by users, must be rectified swiftly, and responsibility assigned where lapses are systemic.

A periodic report should also be released, highlighting the kinds of flaws identified and the solutions adopted. This process not only ensures that the system evolves continuously but also reassures taxpayers that corrective measures are not left to chance.

Stakeholder engagement A mandatory engagement with stakeholders - taxpayer associations, legal experts and technology specialists - before rolling out new tools can help refine the systems. It would ensure that reforms are grounded in real-world needs rather than theoretical design.

Technology must empower, not intimidate. By having robust infrastructure, embedding oversight, enforcing accountability and listening to stakeholders, India can build a model of tax governance that is both technologically advanced and deeply humane.