Tax is the primary compulsory public contribution of government revenue where finance data may have a direct impact on taxes triggering a company’s operations, risks or opportunities. Taxation could change radically as with effect from April 1, 2019 of the financial year, the taxman will begin looking into 360-degree profiles of Indian taxpayers. Tax evasion is an unethical action which results biased income distribution and a halt to the stability of economy. It is usually associated with informal economy. But now, life will be a change for the taxpayers whose spending patterns don’t match their earning declarations. A range of technology solutions are available to address various needs of each tax function but this re-skilling technique going to be a completely different world for a conventional tax function, which antecedently will be responsible for providing tax technical inputs on business compliances . India now joins a select league of countries like Belgium, Canada and Australia for using big data to keep a record on tax evasion.
Finally, big data is here
According to various reports, a tax tracker based on big data is built at a purposed cost of INR.1000 crore. Now, evaders will not only be tracked by those old traditional sources but also from social media such as Facebook and Instagram. The tax department has given a go ahead hand to access the insight portal beginning March 15, 2019. If you have posted your pictures from a foreign vacation or a new car you bought that look way out of your league judging your tax returns, then you might receive a notice from tax department. The taxman will now glean all the information from your social platforms deducing the mismatch between your earnings and spending leading to a tax raid in your residence or office premises.
The idea is to catch the tax evaders increasing the number of taxpayers filing the returns. The insight project features an integrated information management system harnessing machine learning to entail collecting relevant web pages and documents that could be probed. Tax truants who may have played smartly during demonetization will be tracked by big data to build a master profile- address, signature and tax return details that would include all key information about him / her. A segment named business intelligence will basically be an eavesdropper for non- compliant folks. A business standard report says that geographical information system will help the taxman zero in on a specific area for more focused action classifying taxpayers on the basis of parameters like income, profit and capital gains.
Big data software ensures 100% scrutiny of all the filed returns and selection based on thousands of small parameters to deliver the probability of tax evasion as zero.
Government is now leveraging new techniques for a effective tax administration where India is no exception. “Britain’s connect” development at an estimated cost of 100 million pounds will be a next step for tax evaders. Since its genesis in 2010, the system has prevented the loss of 4.1 billion pounds ($5.4 billion) in revenue.
The advent of the digital economy has created vast interest in the changes it triggers, not only in a company’s tax profile but also in its tax function. Thus, we need to be able to speak insightfully about disruptive digital transformation trends and the pressing need for traditional companies to factor in the consequences for their tax and finance functions as they contemplate buying, monetizing and selling digital assets in pursuit of a new strategic vision.
It is believed that existence of corrupt tax collectors and inefficient tax structure of the developing countries makes them suffer tax evasion. This results in accounted money and creation of a parallel economy. Thus, the tax structure and collection tiers of our economy needs a change, tax relaxation must be provided to lower the amount of tax evasion and stringent punishments must be enforced for crimes like tax evasion.
In order to ensure that the tax money reaches the government for social welfare measures, we all should file our true income tax returns and reap the benefits of a developed economy. Our experts can assist you for an accurate and hassle free income tax return filings to rescue you from such tax demands. We can also assist you in your on-going tax assessments.
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