Tax dodging is one of the current problems in the society. The Government earlier had taken serious steps to curb this but might have failed on certain grounds. India has millions of users on social media platforms. So the government took a new step to scrutinize the profile of users of Facebook, Instagram, and Twitter to keep a track on the properties and objects they are buying.
According to The Times of India report, sources in the Central Board of Direct Tax (CBDT) disclosed that social media accounts have become the new means to zero in on suspected defaulters. Besides the credit card statements, bank transactions and social media accounts have become an easy way to keep watch on tax evaders or black money suspects. With the surge in the number of Indians using social media in recent years, the country’s I-T department has now started using information from all the social networking sites alongside old routine methods to nab tax offender, said the report.
In case of those who did not pay income tax but are seen on foreign trips twice or three times in a year, it becomes easy to figure out that the person has not given an accurate account of his information.
The Tax Office has employed a team of datamining specialists, or data doctors. Their role is to look online at social media sites such as Facebook and Instagram to determine if what people are posting matches with what they’re reporting in their tax returns. Now they’re not simply sitting there flicking through feeds, hoping to catch people out. They are however developing models that identify “non-compliers” so that programs do the scrolling for them.
Data matching is not an entirely new audit approach for the Tax Office. For years now, they’ve been matching your tax file number to discover undeclared interests and investments. They’ve also been data matching registration and stamp duty paperwork for boats, properties and more for income and expense audits. Social media, however, adds a whole new dimension and means that your humble bragging could land you in a whole lot of hot water if you’re not being honest either in your posts or in your tax return.
So it should not be a surprise to get a notice from the income tax (I-T) department for flaunting an expensive watch or car on social media platforms such as Facebook, Twitter or Instagram.
The I-T department’s Project Insight, to be launched in the 2017-18 financial year, aims to mine big data from social media to scrutinise potential tax evaders. “If you flaunt that you have gone on an expensive trip to a foreign location on Facebook and other social media, we will gather that information to match it with your income declared,” a finance ministry official said.
Another official confirmed that Project Insight will include data from social media platforms. “Project Insight will essentially do data mining. It will use inputs from various sources. Social media would be one of those,” he said. The work on Project Insight has already begun and the department plans to launch it soon.
The project would identify the expenses incurred and investments made by assessees. The project will integrate enterprise data warehouse, data mining, web mining, predictive modelling, data exchange, master data management, centralised processing, compliance management and case analytics capabilities.
From August, the government will start collecting virtual data not just from traditional sources such as banks but also from the social media, as it looks to match residents’ spending patterns with income declarations under ‘Project Insight’.
So avoiding filing taxes or paying too little, but posting pictures of a luxurious lifestyle on social media sites, could soon land one in trouble. Also if there an urge to flaunt the latest LV handbag or the new Italian holiday, a few likes could cost to be very expensive. For besides the thousands of followers and friends admiring those pictures and posts, there will also be the Income Tax Department now going through them.
Tags: Facebook, Instagram, Social Media, Twitter