There are 1.3 billion people in India, but only 37 million filed tax returns and only 172,000 declared income of more than Rs 5 lakh last year. The irony is that, in the same period, 20 million Indians went abroad, 2.6 million cars were sold in India.What does it prove?
We Indians are shy of paying taxes. But not anymore.
Income Tax Dept. has spent Rs 1000 crore to create Project Insight, which will dig into your social media accounts, find out your spending based on your posts, and force you to pay the tax.We had reported about this initiative from Income Tax Dept. last year, which is now ready to be unleashed.
If you thought that the post about that sizzling Maldives holidays only generated ‘likes’, then think again…
Rs 1000 Crore Project Insight To Be Unleashed
Govt. of India has spent Rs 1000 crore to create a platform wherein IT Dept. will be able to link your biometric details to your online identity, and snoop out how much tax you are required to pay. The platform will even calculate your expected incomes, and expected tax which you need to pay next fiscal.
Using advanced machine learning, data mining and big data, Project Insight will map every Indian’s spending pattern, with the income generated, and find out the tax which needs to be applied.
Tax specialists are saying that data analytics is the future for tax enforcement, as it will remove ambiguity and introduce more transparency into the whole process.
Days of random raids and checks by Income Tax Dept. is now over, as Project Insight will pinpoint individuals based on exact data and evidence, and compel them to pay the applicable tax.
Project Insight Inspired By UK’s Connect?
In 2010, UK implemented their own version of discovering hidden tax payers in the form of ‘Connect’, which was developed at an expenditure of 100 million pounds.
As per a report from London-based Institute of Financial Accountants, Connect has been able to prevent income tax loss to the tune of 4.1 billion pounds till date, and the number of criminal prosecutions have increased to 1165/year from 165/year before Connect.
Now, let’s see how much tax Project Insight is able to extract in India.
Three Stages Of Project Insight
L&T Infotech has been working on the technical aspects of Project Insight since quite some time. As per L&T Infotech chief executive officer and managing director Sanjay Jalona, for first few months, L&T will deploy the software and the techniques on their own end, and help IT Dept. to snoop on social media users and extract their spending to find out the applicable tax.
Later, they will transfer the technology to the Govt.
Basically, there shall be three stages in Project Insight:
Stage 1: All income tax declarations of Indian citizens – credit card spends, investments, stocks, property details etc would be transferred to the new system. Email blasts would be sent, encouraging all to declare their properties, and file tax returns
Stage 2: Using Data Analytics, Data Mining and Big Data, Project Insight will create ‘individual spending profiles’ of all Indians, based on their existing data and the data mined via social media profiles. This will start from December 2017.
Stage 3: Starting May 2018, Project 2018 will start predicting income sources, spending and associated tax of every individual and business establishment.
As per some experts, tax compliance is expected to rise by 30-40%, once Project Insight is implemented.
Finance Minister Arun Jaitley had earlier said in February: “Technology is a boon for mankind. 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. After demonetization, the preliminary analysis of the data received related to deposits made in old currency presents a revealing picture. This data mining will help us expand the tax net.”
It seems that the time has now come for implementing the same.
Do share your insights on Project Insight by commenting right here!
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