A Study on the Impact of Technology and Automation in Direct Tax Compliance

Abstract Direct tax compliance under the Income-tax Act of 1961 has undergone a considerable alteration due to India's swift digital transformation of tax administration. Using primary data gathered from 80 tax professionals in Mumbai, this study investigates how automation and technology affect productivity, accuracy, task management, and professional flexibility. The e-filing site, AIS/TIS, reconciliation tools, and AI-based systems are examples of digital platforms that have replaced manual approaches in compliance processes with integrated digital frameworks. According to the results, automation tools are widely used, and respondents reported significant time savings, fewer mistakes, better compliance accuracy, and more productivity. Professionals may now manage heavier workloads and concentrate more on strategic and advisory tasks thanks to automation. Digital technologies are widely accepted, as evidenced by statistical analysis that finds no discernible differences in adoption or time saved across expertise levels. Software expenses and a partial dependence on manual procedures are still problems, though. The study's overall findings indicate that technology has improved the efficiency and transparency of direct tax compliance while highlighting the necessity of accessible tools, ongoing training, and supportive legislative measures for long-term digital growth.