Why Infosys’s Tax Portal Project Failed: Lessons in Large‑Scale IT Delivery

Project Overview

Since its launch on June 7, the new income‑tax e‑filing portal developed by Infosys has suffered continuous failures, including OTP generation issues, password errors, data linkage problems, and inability to submit tax returns.

The portal was intended to reduce the tax refund processing time from 63 days to one day, but within hours of going live it experienced multiple outages, prompting the Indian Finance Minister to publicly criticize Infosys.

Key Failures and Their Impact

Problems quickly expanded to interest‑calculation errors, incorrect Form 16 data extraction, and missing trust‑exempt details, causing frustration among taxpayers and accountants.

Due to these issues, the IT department reverted to manual filing and delayed deadlines for pension fund and sovereign wealth fund submissions.

Root Causes

Experts point to a lack of proper user‑acceptance testing (UAT) and insufficient involvement of tax domain experts. Infosys relied on technical expertise without adequate testing from the end‑user perspective.

Mohandas Pai, former Infosys director, emphasized that the company only tested the software layer, neglecting user‑side testing that could have predicted many of the failures.

The finance ministry also lacked technical expertise, treating the system more like a document‑processing workflow than a complex database‑driven application.

Project Management Issues

The project was launched without thorough testing, and the migration from the old system to the new one was mishandled, leading to data loss and irreversible setbacks.

Attempts to run the old and new systems in parallel were not made, and the portal was not designed to handle frequent interruptions.

Broader Context

Infosys has a history of similar challenges in other large government IT projects, such as the MCA21 v2 portal and the GST network backbone, where performance problems also emerged.

Despite the setbacks, Infosys claims progress, stating that 30 million taxpayers have completed transactions, but acknowledges ongoing challenges.

References

https://www.moneycontrol.com/news/business/i-t-portal-glitch-what-went-wrong-with-infosys-new-e-filing-portal-7398561.html

https://www.theregister.com/2021/09/23/infosys_india_tax_portal_update/

https://indianexpress.com/article/explained/explained-income-tax-portal-glitches-infosys-ceo-summoned-7466864/