The income tax department's action plan for 2018-19 reveals that it is aggressively using data analytics to not just get to the tax evaders but also widen the tax base.
While the action plan says that about 1.06 crore new filers (persons who were not included in the filer base as at the beginning of the year and had filed returns during the year) were added during 2017-18, it is planning to include 1.25 crore more in the current fiscal.
And big data is playing a big role in achieving this goal. The action plan of the department points out that "New opportunities for identification of potential tax payers have opened up due to data mining and data analytics conducted by the Systems Directorate, Directorate of Intelligence and Criminal Investigation, Investigation Wing and TDS/TCS charges."
It goes on to say that the effective utilisation of these data by the field officers would result in identification of a large number of potential tax payers. In addition to disseminated data, local intelligence, inputs from market associations, trade bodies and professional bodies should also be gathered and used to identify non-filers.
Tax Deduction at Source (TDS) has emerged as powerful instrument for preventing tax evasion, widening the tax base and augmenting revenues over the years. TDS accounted for 41 per cent of the overall gross direct taxes collections during FY 2017-18.
The department is also utilising big data to increase collection from international taxation. It is using data extracted from details in Form 15CA/CB, which are filed by persons remitting funds overseas with or without tax withholding.
According to the action plan, a major part of collections in international taxation charges comes from tax withheld from remittances made to non-residents. It says that the verification of remittance data carried out last year has highlighted the need to apply more focused and effective risk parameters in selecting high-risk data for verification.