I-T department using data analytics in order to catch tax evaders
MUMBAI: It’s not unusual to form an investment company for buying an expensive residential apartment. But in the case of a city Golf Link Road apartment, the ultimate beneficiary was found to be director in an investment company —living in a modest house in Seelampur, earning less than Rs 1 lakh a year and not owning a car or a credit card. Income-tax officials suspected it to be a benami transaction, a property bought by a businessman in his driver’s name.
In order to uncover the culprit, the I-T department would have to go through — tax returns, credit card and PAN details, phone records and even social media platforms. Here the number crunchers and the data analysts come into play. An official stated, “It’s not possible to go through various unstructured and structured data sources and make some sense out of them. But the data collected through various sources will leave a pattern and analytics could raise red flags which will help tax officers in investigating the case further.”
Rise of number crunchers
Amit Maheshwari, the partner of Ashok Maheshwary & Associates elaborated, “Data analytics would be a helpful tool in financial and social profiling of taxpayers and will help in generating valuable and actionable insight. This would be used in discovering benami properties.”
Experts have noticed that demonetisation has brought various transactions which were suspicious, under the scrutiny of tax department by cross-referencing the data collected on cash deposits with that of older data. Jaskiran Bhatia, partner at tax analytics, Deloitte India stated that, “Demonetisation, was a trigger in some way and data analytics will help in establishing linkages between people, their income and investments made by them, which will in turn raise red flags”.
“Advance tools are being used by the government for both unstructured and structured data. This will help in analysing and establishing relationship between various people or entities going upto 16 levels deep, based on sets of data like – phone calls, social media interactions, addresses, travel trends and I-T returns.”
Legal is easier
Combining the GST data, it will not be easy to evade the taxman. Maheshwari mentioned, “After demonetisation and GST, the informal economy has further shrunk. The future of tax administration is deploying data analytics, which will lead to an increase in the tax:GDP ratio. This can be believed to be a game-changer.”
ET View: Adopt Torrens system
It makes eminent sense to deploy big data analytics in order to track benami deals. Unclear titles enables money laundering via real estate deals. There is a need to ensure that property holders have guaranteed ownership and for this, Torrens system should be adopted by India wherein land ownership is registered directly by the state. Guaranteed titles will curb sham realty deals.
Very useful but the avg man on the road can hardly understand the importance & the overall impact of this on his day to day life.
Can this not explained in a simple down to earth manner? At least an effort in that direction should be made,as I feel he will put in his contributions as well.
In connection with the tax update Analytics to catch tax evaders.My gross total income for A Y 2016-17 after deduction of chapter vi-a is Rs1783,010/- which consists of salary,arrest of wage revisions ,leaves encashments on retirements & others income from intt on Fdr A.Y 2016-17 Tax payable Rs365550/- Tax paid Rs365780/- tax on salary is deducted from salaly by the employor.I retired from the bank service on 29-02-2016A.Y 2017-18 AY2017-18, sr
citizon.Gross pensionsalalyterdeduction undet chapter vi-sRs796443/- tax payable Rs 81668/- tax paid Rs82949/-as shown in 26as statement. Tbete is no concealments of income & evsdance of tax or be ami transaction. I am regular tax payer from last 20 years.There is no evadence of tax . Regards, Som Nath Kashyap Pan-abnpk1820g
This- All is agonising & stressful, as rightly said by you, the simplicity in tax reforms, if any at All, is Totally LACKING on the part of the present LESSER EXPERIENCED GOVT- for example the complications of GST invading a Simple & a common man like me, as earlier I had no problem in receiving my paid services, but now that stands SHURNKED, since based in Faridabad & billing to Agency in Delhi, I have to register in GST & submit RETURNS every month, hence better to STOP smaller professional work (4-5 lakes in an year) now to avoid the hassles and stresses caused by THEM!!!
Best way to explain it to common man is to give a Case Study
Ssss
Was the Data Analysis not available earlier. It was. Then only why start now. They have to make a beginning somehwere is it. IT Dept. is prompt in finding tax evaders and collecting taxes but why are they lax in refunding excess taxes collected. A refund due to my Daughter from her IT filings of 2010-2011 was processed by IT Dept. after a full 5 years and cheque was sent when the PM and others announcing from rooftops to use e-payment or card payments. The cheque sent to us arrived when we were away abroad and after 90 days expired. The IT Dept. was intimated and Cheque sent back to SBI HYD. who issued the same. ISO verifying and issuing a fresh Cheque IT Dept. demanded that my Daughter prefer refund order afresh and IT Dept. has taken another 9 months to send a cheque.Can they not ask SBI HYD who are authorised to issue refund cheques after making sure that money is not encashed on earlier cheque. All that IT now is doing at the bidding of GOVT and left to themselves they will be happy to wallow in Red Tape/Inaction etc. Jai Hind!!!!
A perfect and thought provoking case of IT refund INACTION and department LETHARGY . Talks of IT dept is high but actions on REFUND are not only lethaergic but primitive anjd not in line with their claim of DIGITISATION !!! While p-ayment is accepted through electronic media, why REFUND should be in cheques only ??? GREEN REVOLUTION like SWATCH BHARAT !!! God BLESS IT DEPT.
I am seeing that IT department has improved by leaps and bounds over the past years. Earlier it used to be long queue for filing the returns. Now that is gone. Even refunds have become much faster. Assessments are done quicker.
On the data analytics. I believe that this is going to be a game changer. While common man will not see what is going on under the hood, the value of white money will increase. Yes, he will have to face some hardships on the way. But the slavery created by illegal amassing of wealth will take some lives for us before the liberation. Crooks will try to twist their games all along the way.
I am a retreat. Army officer.I have been honestly paying taxes for the past four decades.Ihave payed taxes to the last penny.I only feel that in this country,only honest people suffer.
MADHUKAR KOCHAR Sir
You said it correctly it is India here we suffer when you are honest.
As an Indian , I welcome the initiative taking by the IT department. It should have happen long long back. It is really very sad for us , for our country those people who are earning lot or earning by way of corruption an evading Tax. For the interest of our Country we welcome this initiative heartily.
In the specific case of a businessman buying a property, registering in his driver’s name one view is that the driver could be called in for explaining the source for investment in such property. At the time of Registration itself, he has to give his PAN , as it is now a legal requirement. If not given how the registration is done ? So it is supposed that he had given PAN. Such a deal is also supported by an Agreement of purchase / sale. This also is taken as part of documentation of such a deal. The main details are the payment details. Can not the Officers the source of funds looking into his status in life. A driver normally c
In the case of a business man buying a in driver’s name two important details are essential for information and verification: PAN card photo copy to be submitted and the Agreement for purchase / sale. Looking into his status in life. the officers responsible for Registration of such a deal could question him on the reliability of the documents presented by him for a satisfactory answer. If this not done. perhaps a senior advocate is employed to get the deal completed.
Now all the registration details are computerized would it not be possible for IT Department for automatic linking of such transaction with the PAN of such employee demanding explanation from him of the deal.? It appears that there is a i missing link in tracing the transaction which needs to be updated, so that no other analysis are required to trace it as a Benami Deal.
Being a tax practitioner I welcome the step taken by INCOME TAX DEPARTMENT.
I am an Ex Naval Officer, I appreciate the IT department for gearing up in actions….I have two clarifications…
1.Why IT department is not questioning Educational Institutions about unofficial of huge fees/donation collections…..
2. How parents are paying even poor or medium or rich such a big donations…
Can you answer…..
I need Income Tax department telephone nos or email ids to give some valuable information of tax evaders
in which area is this case to be reported?
Thanks for sharing great information.
Sir kindly inform you that i have filled ITR which in my hand and always be honest our country and not inform me. and i walways my object development our country.so thanks and detal other taxes paid and detail all my adisanal investment detail send me.thanks today see you mail
Hemant
PAN : – Vide communication Ref xxxx1991229(Dated 02-08-2016) an amount of Rs.270/- demand was made. This demand was disagreed by me with the reason that while computing the tax liability, the amount of TDS under column 38 was mentioned as Rs.3106/- whereas the actual amount was Rs/3601/-. The reply to this was received from AO, KALYAN “THE RETUN OF INCOME FILED ELECTRONICALLY AND SAME HAS BEEN PROCESSED BY CPC. THEREFORE NECESSARY CORRECTION CAN BE MADE BY CPC ONLY”.
TILL DATE, THERE IS NO CORRECTION FROM CPC NOR FROM AO- KALYAN.
FURTHER THE REMARKS IN STATUS COLUMN READS “Resolved”. I FAIL TO UNDERSTAND HOW THEY TREAT SO WITHOUT CORRECTION OR REFUNDING Rs.230/- EXCESS TAX PAID BY ME.
You are giving only few examples of Evaders.One question I ask you WHY
YOUR HIGER UPS NOT PAY ANY INTEREST
ON REWARDS OF 15L to (1st 20L then reduced to 15L also suspected that inability to give public ie Whistle blower
That amount .)W/Blowers.First Ad to public with proper email ID with rewards.or login ID . Your site is kept as
Very difficult to find to report on Black money information.pl updateyour site or
Announce on public news papers. Only
On Valid mail ID of authorised officer.THQ
For Higher ups.
We have lived a life of dodging taxes at every step. If the retailer sells us cheap by not giving us a bill we will jump for it little realising that we are indirectly evading taxes. We end up paying the Registrar of land to make our life easy so that there is no hassle in transfer of flats or land when we should be fighting it out. As a salaried person we feel we have been honest in paying the taxes when actually, the taxes are deducted at source. Had the task of deduction and payment left to us, we would have dodged it by citing the examples of unscrupulous businessmen evading taxes. The time has come for us to understand that every person earning above a threshold has to pay taxes. GST is a welcome step though it could been one uniform tax. Teething troubles are expected and best borne for a better future.
ager i.tax deptt.c.a.ke party a/cs check karey tab deptt ko pata hoga ki profit jo heavy hota hai voh kese adjust hota hai tax ke roop me miniumam amt dep karvatey hai c.a per i.tax deptt kuchh nahi bolta hai ager inkey office per visit kiya jay tab facts malum hoga esi tareh jinky pass 80 g hai hai unka jo donation aata hai voh adjust karkey rebait le letey hai yeh working c.a ki hai
hamko ek do logo ne dhamki di hai ager kuchh hamko hota hai to kaun jimedar hoga
the income tax department officials r very well accustomed to keep checks on tax invaders but it is difficult for them now how to keep this go slow burdens which is affected to many sectors have concrete analysis as the picture looks big but as action and raids things r small because the slow down is vastly affected, GDP has fallen and purchasing power of a common man is ruined as time pass , the cycle is healthy only once things turn bright though govt and its policy makers r trying its best but the hollow ground to fill up would surly take very big time , also the sectors having huge NPAs shows there is no sustain capacity any more for survival unless fresh finance, growth, is only to streamline the huge gaps, as regards gst implementation the cycle will sure take time and small timers will b washed out as they maynot be able to stand in front of actual manufacturer who is a mass producer n for them marketing, finance, production, planning execution will sure be in terms of supply meet demand at all places
It’s an awesome article for all the online people; they will
get advantage from it I am sure.
Govt should take steps to motivate tax payers by giving incentives
Motivation of tax payers should be done by incentives
Well done
Can IT Department be more transparent in sharing the responses they have got from people who have deposited huge pile of cash. As per their own statements some 15 Lakhs+ notices etc have been sent but what is the reply? Did IT department every one honest and had white cash? I feel IT department has more responsibility and duty in catching the evaders rather than giving piece mill data or highlighting one or two such instances.
Numbers always adhere to Dharma fools play with it and get caught by their own meddling.I.T &I.T Income Tax and Information Technology is a formidable force to get back the money to where it belongs and when this happens our poor people will get more empowered and we will have a great society.
Hi sir I am a driver my salary is 18000 interesting to pay tax how will pay tax
I was a CPSU executive w/o any extra income. My DDO recovered excess tax for the FY 2014-15 which was approved by IT dept. once I submitted ITR, but recovered Rs 19000+ towards tax arrears for 2010-11 with penalty and interest. Even after submitting my pay slips and Form-16 for the corresponding year, this was not allowed. I could not submit proof of having deposited the tax into IT dept by my office since my office documents were dumped on shifting to new building.
Thus I was taxed twice and fined for none of my fault. Why the IT dept failed to intimate the error in the same year ? Why did they wait for 5 years until my DDO recovered excess tax?
Make all transactions whether it is cash/papers digital which will have powerful documentation and avoids all sorts of irregularity
Honesty and charity starts at home.So…….
Good to know that data analysis can help the IT Officials tap tax evaders. I feel, this can be one source to tap tax evaders. How about others like doctors , General Practitioners who earn daily Rs. 15,000 to 30,000 per day but do not pay taxes or pay nominal taxes. This cash collection is being done daily, how can the IT TAP SUCH EVADERS? ONLY BY BECOMING A PATIENT…………….THESE DOCTORS INVEST MONEY IN PROPERTIES, GOLD, MAKE EXPENSIVE HOLIDAYS…………BUT THE HONEST TAXPAYER IS FOOLED, ONLY TO BE TAXED HEAVILY………GOD ONLY SAVE HONEST TAX PAYERS……………PENALTY FOR BEING HONEST…………JAIHIND
THESE DOCTORS WHO COLLECT HUGE CASH EVERYDAY, HAVE NOTHING TO DO WITH DATA ANALYTICS, THEY DO NOT SURF OR HAVE EMAIL COMMUNICATIONS………..THE TAX EVADERS ARE MUCH SMARTER THAN WE THINK…………..THEY WILL NOT HAVE ANY SUCH DOCUMENTATIONS AVAILABLE TO PROVE THAT THEY WERE EVADING CASH, EXCEPT HOLDING HUGE CASH NOTES…………..HOW DO THE IT GUYS CATCH THEM,…………….BE IN THE FIELD AND BE PATIENTS……………….TRAP THEM………ONLY WAY………..JAIHIND
It is understood that we pay taxes to purchase peace, law and order and cost of civilization…. Private sector employees TDS deducted by the employer at sources, with maximum rate of 30% as applicable ….. Govt collects taxes and expends it for welfare of the society, in form infracture, safety and development.
The Goverment sector employees are well procted even after retirement by paying them a fixed rate of pension and medical facilities to them and their family, but it is unfortunate that after retirement of private sector employees who paid lot of taxes during whole life… nobody take care of those…. They would be unable to earn adequate money for their livelywood thereore, the Government should think in that direction and make some scheme of social security to take care of those citizen, after retirement … beginning may be in form midical coverage…. this will increase trust and awareness among all the citizen to come forward and pay taxes honestly.
To unearth the black money is a welcome step by the Government.
Bharat Mata KI Jay
Jay Hind
How IT department will catch the below people.
A Vada Pav fellow sells 2000 units per day with a charge of 10 rupees per unit which is 20,000 unit sales per day if we take 40% costs on all aspects his total daily profit is 12 thousand per day with a monthly income of 12000 X 30 = 3 Lakhs 60 thousand income per month. Is he paying taxes every year on the income he is generating up to 43 Lakhs 32, 000 per year.
I hope IT department will also focus on unorganized sectors who are also tax invaders not just employees and businessmen.
I do not know what should I do?I want to get credit card that you say has great amount on that.