 "L&T Infotech bags contract for Project Insight")
L&T Infotech has bagged the Project Insight contract to help the Income Tax Department nab evaders. The IT firm will profile all taxpayers and flag high-risk individuals. So, if you missed paying your taxes but head to a luxury mall and splurge, you could get caught.
The project, worth about Rs 1,000 crore, will use technology to allow the government to collate all information available with the I-T department and profile people using Permanent Account Number (PAN) details.
“L&T Infotech has won the contract for the project, which will be launched in phases. It will segregate assessees as low and high risk. If an individual’s income is low according to tax returns but makes big-ticket purchases, it will get flagged. Identification of defaulters will become much easier,” said a finance ministry official.
The Central Board of Direct Taxes and Intelligence Bureau are working closely on the project.
L&T Infotech’s Rs 1,243-crore initial public offering (IPO). Last week was oversubscribed about 12 times and attracted around a million applications. This is one of the highest for any share sale offer in the past five years.
The revenue of the firm, the sixth largest Indian information technology services player, from operations and other income stood at Rs 6,143 crore, while it clocked a profit after tax of Rs 922 crore in 2015-16.
Through profiling, all transactions by a person, including purchase of immovable property, jewellery and vehicles, will be available with the tax department in a systemised manner, making identification of evaders simpler. The move is also aimed at widening the tax base.
The project will also track the PANs being quoted in transactions and tally these with tax filings. “This way, we will also be able to identify those with more than one PAN,” said the official. The Special Investigation Team on black money has in its latest report recommended banning cash transactions over Rs 3 lakh.
Project Insight is also expected to rank evaders based on the amount of tax that can be recovered, so that authorities can go after the highest value targets first.
“We will obviously be interested in high value cases. Through the project, we will be able to run models to identify for instance, people who bought more than three houses or Rs 20 lakh of jewellery during the year. Therefore, identification will become easier,” said another official.
Currently, the government gets the information from various channels and reporting agencies, besides returns, and the information is used in a scattered way. 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.
Prime Minister Narendra Modi in his address at the tax conference last month had said 92 per cent of tax revenue comes from tax deducted at source, advance tax and self-assessment tax, while the remaining eight per cent comes after scrutiny. He said if the 42,000 CBDT officials are engaged for ensuring direct tax revenue, then the tax net should increase further.
Seven third-party sources have to mandatorily report transactions and file an annual information return (AIR). These include banks that accept a cash deposit of Rs 10 lakh or more in a year from any person; banks or companies issuing credit cards where payment against bills exceeds Rs 2 lakh in a year; mutual funds collecting Rs 2 lakh or more for sale of units by any person; companies that receive Rs 5 lakh or more against issue of shares, bonds/debentures and registrar/sub-registrars in respect of sale/purchase of immovable property exceeding Rs 30 lakh; and the Reserve Bank of India for issue of bonds exceeding Rs 5 lakh. Project Insight will use many other sources, beside AIRs.
The government has also made it mandatory to furnish PAN for all transactions over Rs 2 lakh through all payment modes with effect from January 1, 2016.
It also rationalised monetary limits to furnish PAN for certain transactions, doubling it for sale and purchase of immovable property, and hotels and restaurant bills to Rs 10 lakh and Rs 50,000, respectively.
CRACKING WHIP ON DEFAULTERS
The project, worth about Rs 1,000 crore, will use technology to allow the government to collate all information available with the I-T department and profile people using Permanent Account Number (PAN) details.
“L&T Infotech has won the contract for the project, which will be launched in phases. It will segregate assessees as low and high risk. If an individual’s income is low according to tax returns but makes big-ticket purchases, it will get flagged. Identification of defaulters will become much easier,” said a finance ministry official.
The Central Board of Direct Taxes and Intelligence Bureau are working closely on the project.
L&T Infotech’s Rs 1,243-crore initial public offering (IPO). Last week was oversubscribed about 12 times and attracted around a million applications. This is one of the highest for any share sale offer in the past five years.
The revenue of the firm, the sixth largest Indian information technology services player, from operations and other income stood at Rs 6,143 crore, while it clocked a profit after tax of Rs 922 crore in 2015-16.
Through profiling, all transactions by a person, including purchase of immovable property, jewellery and vehicles, will be available with the tax department in a systemised manner, making identification of evaders simpler. The move is also aimed at widening the tax base.
The project will also track the PANs being quoted in transactions and tally these with tax filings. “This way, we will also be able to identify those with more than one PAN,” said the official. The Special Investigation Team on black money has in its latest report recommended banning cash transactions over Rs 3 lakh.
Project Insight is also expected to rank evaders based on the amount of tax that can be recovered, so that authorities can go after the highest value targets first.
“We will obviously be interested in high value cases. Through the project, we will be able to run models to identify for instance, people who bought more than three houses or Rs 20 lakh of jewellery during the year. Therefore, identification will become easier,” said another official.
Currently, the government gets the information from various channels and reporting agencies, besides returns, and the information is used in a scattered way. 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.
Prime Minister Narendra Modi in his address at the tax conference last month had said 92 per cent of tax revenue comes from tax deducted at source, advance tax and self-assessment tax, while the remaining eight per cent comes after scrutiny. He said if the 42,000 CBDT officials are engaged for ensuring direct tax revenue, then the tax net should increase further.
Seven third-party sources have to mandatorily report transactions and file an annual information return (AIR). These include banks that accept a cash deposit of Rs 10 lakh or more in a year from any person; banks or companies issuing credit cards where payment against bills exceeds Rs 2 lakh in a year; mutual funds collecting Rs 2 lakh or more for sale of units by any person; companies that receive Rs 5 lakh or more against issue of shares, bonds/debentures and registrar/sub-registrars in respect of sale/purchase of immovable property exceeding Rs 30 lakh; and the Reserve Bank of India for issue of bonds exceeding Rs 5 lakh. Project Insight will use many other sources, beside AIRs.
The government has also made it mandatory to furnish PAN for all transactions over Rs 2 lakh through all payment modes with effect from January 1, 2016.
It also rationalised monetary limits to furnish PAN for certain transactions, doubling it for sale and purchase of immovable property, and hotels and restaurant bills to Rs 10 lakh and Rs 50,000, respectively.
CRACKING WHIP ON DEFAULTERS
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The project, worth about Rs 1,000 crore, will be launched in phases
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Departments such as the CBDT and Intelligence Bureau are working closely on the project
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SIT on black money has recommended banning cash transactions over Rs 3 lakh
- The move is also aimed at widening the tax base, currently at Rs 5.43 crore
