In India, anyone who has made a cash deposit or has bought a high value item following the country’s November 8 demonetisation which is not in line with their incomes declared in the tax returns might have a reason to worry since the tax authorities are sifting through tons of data generated during the past couple of months or so.
Tax authority’s efforts to discover unaccounted income
The tax authorities are also making use of data analytics to scan for any point of similarity to see if an attempt was done to split up the transactions in order to avoid any suspicion.
The income tax department is going to likely put names in its website soon, which makes it mandatory for these people to explain these transactions.
The department has information regarding deposits and purchases and is pursuing the presumed wrongdoing using ground-breaking intensity.
A senior official of the Central Board of Direct Taxes said that they now have an online mechanism where the names of those that made deposits or transactions that do not match are going to be put up and the information is going to be accessed using an individual’s permanent account number.
Deposits that are below Rs2.5 lakh can come under the scanner too. Data analytics is also made used in order to check different parameters like common phone numbers or addresses to determine those individuals that made deposits not adding up with their corresponding tax profiles.
According to the official, they have information coming from various sources and are going to be able to get to everyone.
The information that came from different sources, including the suspicious transaction reports, are passed on to field formations, aside from the intelligence and investigation wings. These officials are also done with the assessments and are now going to focus on the post-demonetisation data.
Let this be an indication that every government is really getting vigilant regarding tax avoidance especially since this is a citizen’s obligation to his or her country. While tax investigations may be random, it is still important to be prepared. This is why having an audit shield is helpful as it helps with the costs incurred during these investigations.