‘Project Insight’: taxman to keep eye on your social media posts
31 Jul 2017
The Narendra Modi government's tax crackdown has just got tougher, with tax sleuths now taking a peek at your posts on social media. A photo of your shiny new car on Instagram or the Facebook post about your chic holiday cottage may lead the taxman to your door.
Starting next month, the government will begin amassing virtual information collected not just from traditional sources like banks, but also from social media sites, as it looks to match spending patterns with income declarations, reports Bloomberg citing people familiar with the matter.
Officials will be able to spot those who pay too little tax without raiding offices and homes as they currently do in an initiative dubbed 'Project Insight'.
Built over seven years at a cost of about Rs1,000 crore, this will complement Aadhaar, the world's largest biometric identity database, and the Goods and Services Tax, India's most ambitious tax overhaul, as policymakers try to get more people to pay up.
Countries including Belgium, Canada and Australia are already using big data to unearth tax evasion that may have gone undetected without technology, the report says.
Finance ministry spokesman D S Malik declined to comment on Project Insight. The government said last year it had contracted L&T Infotech Ltd to help build the network and boost voluntary compliance.
India's tax-to-GDP ratio is about 17 per cent compared with 25 per cent for most Asian countries, according to government data.
Compliance will rise 30 per cent to 40 per cent during the first phase of the project, Bloomberg's sources said.
During this time all existing data - including credit card spends, property and stock investments, cash purchases and deposits - will be migrated to the new system and a central team will send postal or email blasts to prod residents to file tax declarations (see inset).
The second phase will be rolled out by December, during which data analytics will mine, clean and process the information. Individual spending profiles will be created and inquiries will be more targeted.
In the last phase, which will go live around May 2018, advanced systems will be used to predict future defaults and flag risks.
