A photo of your new house or foreign trip on Instagram, Facebook, etc may lead the tax department to your doorstep.
The Income Tax Department of India has long been on the tail of such evaders and they have struggled to catch up. Black money hence became a mainstay of the Indian economy. High-ranking political and governmental officials have continued to evade taxes, along with a cadre of high-earning businessmen who simply do not wish to pay them
Black money hence became a mainstay of the Indian economy. High-ranking political and governmental officials have continued to evade taxes, along with a cadre of high-earning businessmen who simply do not wish to pay them.
Earlier, the I-T department used to rely largely on bank records of individuals to calculate their tax liabilities. But things have changed after data science came into the picture. Union Finance ministry is planning to implement “PROJECT INSIDER” from April
Insight is the ministry’s flagship project, aimed at widening the tax base by catching tax evaders using technology. The ministry has floated a tender worth over Rs 150 crore to buy a data analytics software and the infrastructure that goes along with it, a person with knowledge of the matter said. The project is also expected to rank tax evaders based on the amount of tax that could be recovered so that the authorities could go after the highest value targets.
It will use data mining, big data and analytics to scoop out tax evaders from social media platforms like Facebook, Twitter, and Instagram
Now, the I-T department might have a weapon to wield against such individuals. An undertaking that has been over 3 years in the making with a purported cost of ₹1,000 crores may prove to be the downfall of tax evaders in India. The government has also made linking of PAN with Aadhaar mandatory to get a 360-degree view of a person’s income and assets.
Project Insight has been initiated by the income tax department for data mining, collection, collation, and processing of such information for effective risk management with a view to widen and deepen the tax base. It will help the taxmen monitor high-value transactions, and curb the circulation of black money. This is part of the steps the government has taken to unearth and tax undeclared or illegal wealth.
The linking of PAN (Permanent Account Number) with Aadhaar will be a key identifier to be used by the IT Department to link and analyze various transactions relating to taxpayers.
The integrated information technology platform will help in catching tax evaders in a non-intrusive manner using technology and without traditional intrusive methods.
The project will use technology to allow the government to collates databases of IT returns, IT forms, TDS/TCS statements and Statement of Financial Transactions received from financial institutions. As part of Project Insight, a new Compliance Management Centralised Processing Centre (CMCPC) would also be set up for handling preliminary verification, campaign management, generation of bulk letters/notices and follow-up.
If an individual’s income is low according to tax returns but makes big-ticket purchases, they will get flagged. If a taxpayer uploads photos of his foreign trip, which mismatches with his annual income, tax officials will be able to use big data to detect a potential gap between his earnings and expenditure. Income tax department might conduct a raid if earnings and expenditure are found a mismatch.
The model, which is based on Britain’s ‘Connect’ system, will put India in the same league as nations such as Belgium, Canada, and Australia. These countries are already using big data to keep an eye on their taxpayers.
The move will also result in the curbing of the black economy and widespread corruption seen in the country today. The large amount of black money which is processed by multiple high-ranking government officials and tech millionaires will be prone to an eagle-eyed view of the taxman.
The steps include the launch of ‘Operation Clean Money’ after demonetization of old higher denomination currency for collection, collation, and analysis of information on cash transactions, extensive use of information technology and data analytics tools for identification of high-risk cases, expeditious e-verification of suspect cases and enforcement actions.
