Hiding Income? Beware!

The Income Tax department has received clearance from the government to map the profile of individual tax payers to plug revenue leakage and stamp out money laundering.

"The Union Finance Minister has given a go-ahead for integrated 360-degree mapping of individual tax payers by utilising data collected from various sources like annual information returns (AIRs) from banks, credit cards, mutual funds, stock market and property registrars," a senior Finance Ministry official said.

This may mean surveillance of phones; verification of spending on credit cards, mutual funds, stock market and property registrars and collating information about excise, customs, service and income tax paid by corporates in order to ensure better tax assessment.

The CBDT has, however, played down the move saying it is not a "total profiling" and that the income tax department will profile individual tax payers in case of suspicion of huge tax evasion. "IT profiling is a 'standard device' adopted as an anti-tax evasion measure," CBDT chairman BM Singh said.

When contacted, Singh said tax officials would scrutinise information gathered from AIRs and take action wherever they come across default, but denied any move to physically shadow individual tax payers or surveillance.

Explaining the 360-degree profiling method, Director General Income Tax (Investigation) Delhi, SS Khan said the exercise involved putting together information from various sources like AIRs in one place for scrutiny.

On Tuesday, Union Finance Minister P Chidambaram had said that in the meeting of chief income tax commissioners, decision has been taken for integrated tax mapping. He, however, declined to give details about the project.

Besides a successful pilot project on integrated tax profiling in Delhi, the I-T department also plans to prepare a huge data bank that would have all sorts of information on potential tax evading individuals and corporate houses.

The government has so far gathered information about Rs 16,00,000 crore investment by tax payers through AIRs last year. Under the tax mapping, the department plans to explore cases involving large scale tax evasion.

The government has already set up 15 CIBs offices across the country and a move is on to expand it to cover all state capitals.

At the national conference of chief income tax commissioners, which concluded on Wednesday, the officials recommended a '360-degree profiling' of potential tax and revenue offenders, the sources said.

The government has equipped the I-T Department with state-of-the-art phone surveillance system that can track calls of a target even if he uses a phone that cannot even remotely be traced to him.

In the large tax units (LTUs), the Finance Ministry is already collating information about excise, customs, service and income tax paid by corporates for better tax assessment.

Once the information is collected against the PAN number, the comprehensive dossier is then sent to the assessing officer to match it with I-T returns that the person has filed.

The accounts of those who have not declared total expenditure in their returns, will automatically get notices for scrutiny, the sources said.