The Income Tax department of Government of India will very soon launch Project Insight. The tax department will analyse mismatches in income declarations and spending patterns to trace tax evasions and black money. The government has recently made linking of PAN with Aadhaar mandatory. This was done to get a 360 degree view of a person’s income and assets. The project is part of the steps the government has taken to unearth and tax undeclared or illegal wealth. The steps include launch of ‘Operation Clean Money’ after demonetisation of old higher denomination currency for collection, collation and analysis of information on cash transactions, extensive use of information technology and data analytics tools for identification of high risk cases, expeditious e-verification of suspect cases and enforcement actions.
It will use big data analytics to match information from social media sites to deduce mismatches between spending pattern and income declaration. The government had signed a pact with L&T Infotech for implementation of Project Insight. The project is designed to strengthen the non-intrusive information driven approach for improving tax compliance. Project has been initiated by the income tax department for data mining, collection, collation and processing of such information for effective risk management with a view to widen and deepen the tax base. It will help the taxmen monitor high value transactions, and curb the circulation of black money.
The project will use technology to allow the government collate databases of IT returns, IT forms, TDS/TCS statements and Statement of Financial Transactions received from financial institutions. As part of project, a new Compliance Management Centralised Processing Centre (CMCPC) would also be set up for handling preliminary verification, campaign management, generation of bulk letters/notices and follow-up.