Government to track social media accounts to identify tax evaders

Income tax department

Income tax department

In other words, next time when you post photos on Facebook saying how much you were enjoying champagne at the fancy Friday evening dinner, or how much fun you had in Greece this summer, understand that the posts will also be seen by the income tax department.

"Data analytics is the way forward for tax administrations across the world", Bloomberg quoted Amit Maheshwari, managing partner at accountancy firm Ashok Maheshwary and Associates near New Delhi, as saying. "Perceived randomness in scrutiny will come to an end".

The Income Tax Department signed a contract with L&T Infotech for implementation of Project Insight in 2016, created to strengthen the non-intrusive information driven approach for improving tax compliance, according to a Business Standard report. "We plan to use technology in taxation department in a big way to make life simpler for a law abiding citizen, and also for data mining to track tax evaders", Jaitley had said in February.

L&T Infotech has agreed to the build-own-operate-transfer model, which means that while it will be running the project and earning revenues during the contract period, it will ultimately transfer the network to the government once the contract runs out, the report said. A similar program called "Connect" in United Kingdom has prevented the loss of $5.4 billion in revenue, the London-based Institute of Financial Accountants said in a December 2016 report. During this time all existing data-including credit card spends, property and stock investments, cash purchases and deposits-will be migrated to the new system and a central team will send postal or email blasts to prod residents to file tax declarations.

The second phase which will roll out by December will go implement data analytics and trawl your social media accounts. The government said past year it had contracted L&T Infotech Ltd-an arm of India's largest engineering conglomerate Larsen & Toubro Ltd-to help build the network and boost voluntary compliance.

Some analysts recommend that the government use its tools for tax forecasting.

The scope of the project has also led to concerns in a country where the government has repeatedly told the Supreme Court it doesn't consider privacy to be an absolute right. The government has been pushing people to pay their taxes first up, however, despite being one of the fastest growing economies, the country hasn't seen a positive trend in the revenues and tax collection.

"Safeguards are must", said Rahul Garg, head of direct tax at PwC India.

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