Centre likely to intensify exercise against I-T evaders, say officials

THE CBDT USES ARTIFICIAL INTELLIGENCE AND DATA ANALYTICS TO DETECT CASES OF TAX EVASION

NEW DELHI: The government may intensify its exercise to identify people who undertake high-value financial transactions, but avoid filing tax returns, officials aware of the development said. The move comes despite the government expecting robust income-tax collection in the financial year, as it wants to widen the tax base, which is a mere 81.3 million.

The Central Board of Direct Taxes (CBDT) uses artificial intelligence and data analytics to detect cases of tax evasion. It might also deploy the non-filers monitoring system (NMS) to nudge people to file their income-tax returns, the officials said, requesting anonymity.

“It is surprising that in a country of over 1.3 billion people, only 81.3 million paid income-tax in AY (assessment year) 2020-21. The number of taxpayers in the upper slabs are even narrower. In this digital age, detection of tax evasion is not very difficult,” one of the officials said, adding that some of the tools include statement of financial transactions, tax deduction at source, tax collected at source, details of foreign remittances, trade data and NMS.

The government has so far used 10 cycles of NMS since 2013, which identifies and monitors persons who enter into highvalue transactions and have potential tax liabilities, but not filed tax returns.

“The move is also as per the directive of the political leadership,” the official said, referring to Prime Minister Narendra Modi’s speech on February 12, 2020.

“In our country great doctors, lawyers, chartered accountants, and a number of professionals who are proficient in their respective fields, are serving the nation. But it is also a fact that there are only 2,200 professionals in the country who declare their annual income to be more than ₹1 crore,” Modi had said.