An Analysis of Pre and Post Digitization of Direct Taxation in India – A Study

Digitization in tax refers to the introduction of digital platforms to make the process of tax calculation, filing, and tax duties easier. Making it much faster and easier to pay taxes. Digitization also makes tax compliance easier by creating an electronic paper trail through e-invoices, auto-filling, and accurate calculations. Introduced slowly since the 1990s, it has evolved from simple computer applications to calculate tax to a national system where anyone can pay their taxes easily. This paper examines the process of tax filing before mass digitization, the introduction of digitization, and the effects of digitization of taxation. It aims to compare the two periods to showcase the benefits of digitization and how it has been an important part of compliance and tax filing. Furthermore, the paper does contain a statistical analysis of two periods of pre- & post-digitization, comparing the tax payments through an interrupted time series test to measure the slope of change. To help in determining the contribution of digitization towards the expansion of tax payments. The paper concludes by highlighting that digitization has played a significant part in the growth of tax income, by making the tax filing process much simpler, much faster and much easier for both the government and the people, but cutting outa large part of the process, However it is not the sole reason due to the plethora of outside factors such as COVID-19, GDP growth, population growth etc.