Income Tax Department to launch Project Insight in May 2017

The Income Tax department is planning to implement the first phase of ‘Project Insight’ from May 2017 to monitor high value transactions, with a view to curbing the circulation of black money.
This project has been initiated for data mining, collection, collation and processing of such information for effective risk management with a view to widening and deepening tax base.
Key Facts

• ‘Project Insight’ is an integrated platform that will utilize vast amount of information easily available on social media to conduct raids online rather than traditional way of conducting random searches, known as tax raids.
• It will use data mining, big data and analytics to scoop out tax evaders from social media platforms like Facebook, Twitter and Instagram.
• The Permanent Account Number (PAN) will be the unique identifier is used by the Income Tax department to link and analyse various transactions relating to the tax payers.
• This will enhance the department’s ability to monitor the flow of funds and will provide an audit trail of high value transactions and curb circulation of black money
• The ‘Project Insight’ will be implemented in phased manner during the period 2016-2018. For its implementation, the IT department has signed a contract with L&T Infotech Ltd.
• It will also be leveraged for implementation of Foreign Account Tax Compliance Act Inter Governmental Agreement (FATCA IGA) and Common Reporting Standard (CRS).

Significance of ‘Project Insight’

• It will help in catching tax evaders in a non-intrusive manner using technology and without traditional intrusive methods like search and seizure.
• The integrated platform will play a key role in widening of tax base and data mining to track tax evaders.
• The reporting compliance management system of project will ensure that third party reporting by entities like banks and other financial institutions is timely and accurate.
• It will also set up a streamlined data exchange mechanism for other government departments.

Month: Current Affairs - November, 2016