A Study on Role of Digital Transaction Ecosystem in Automating Tax Compliances and Tax Evasion Among Start-Ups

Abstract

In a fast-moving economy, digitalization plays a highly advanced and significant role for the government and also for entrepreneurs. The government has initiated automation in tax to benefit all tax payers in order to reduce time and human error. Automation has made tax compliance more effective by maintaining records, performing calculations, completing forms, submitting them to the government, and making payments. All these processes are carried out online. Digital systems also improve transparency and accountability in financial reporting, which strengthens trust between start-ups and tax authorities. The government initially encouraged digitalization but now digitalization has become the heart of most entrepreneurs for easy transactions. Most business transactions are carried out through digital platforms like UPI`S, Net banking etc. This enables enterprises to maintain accurate records of their financial activities and management. As a result, at the end of the financial year, enterprises find it easier to file their taxes.

The study aims to examine the relationship between digital transactions and automation tax compliance among start-ups. The study highlights that the use of digital transactions and automated tax compliance systems can significantly reduce tax evasion while encouraging start-ups to adopt more disciplined and compliant financial practices.