AI and Advance Pricing Agreements Feature in India's Strategy to Secure Tax Base

New Delhi, August 19 – At the 23rd International Tax Conference, senior tax official Monica Bhatia outlined how artificial intelligence and Advance Pricing Agreements (APAs) are central to India’s effort to protect its tax base while attracting foreign investment.

She explained that the Supreme Court’s Tiger Global ruling, together with the new Income Tax Act, has prompted a re‑examination of dispute‑resolution pathways and the role of technology in tax compliance.

"AI is reshaping not only business operations but also the way tax authorities assess and collect revenue," Bhatia said. The technology introduces fresh queries about where a company’s economic activity truly resides, how profits should be allocated and where value is generated.

India’s record of more than 1,000 APA contracts – including over 220 bilateral agreements – provides multinational enterprises with certainty on transfer‑pricing matters, reducing the risk of double taxation.

Bhatia warned that tax legislation often lags behind rapid tech innovation, underscoring the need for coordinated international standards and a collaborative approach to rule‑making.