India’s new tax tracker will be stalking your vacation photos

• India’s income tax department will be using big data to help track down tax evaders.
• ‘Project Insight’ is a machine learning software that will be able to scour through social network posts to find between reported income and actual expenditure.
• Canada, Australia and Belgium also use similar software to keep a check on tax evasion.

The upcoming tax season is going to usher in a new era for India where the income tax department is going to use big data to improve tax compliance. And, if tax spending patterns don’t line up with tax declarations, tax payers could be in some hot water.

Innocently labeled ‘Project Insight’, India’s new ₹1000 crore tax tracker can glean over user’s social networking profiles — scouring through vacation photos, social events, new purchases, spouse details — to catch any purchase that doesn’t match a tax payer’s income.

Officials at the income tax department already gained access on March 15. Once it comes into full swing on April 1, India will join nations like Belgium, Canada and Australia who are already using big data to keep an eye on their tax payers.

The goal of the Indian government is threefold. One, bring more people under the tax net. Two, catch citizens that are trying to avoid paying their taxes. And, three, close in on tax violators who already have pending demands over ₹10 lakh.

How does this change things?

Traditionally, the income tax department was primarily dependant on the banks in order to find discrepancies between how much a person actually spend and how much was disclosed on a tax report.

But, with Project Insight, the government will now be able to glean over any person’s profile on social networks to find mismatches between reported earnings and expenditure.

An expensive car, a foreign vacation or flying first class— anything that looks like an extravagant expenditure not in line with how much a person supposedly earns — will be caught on the income tax department’s radar.

The software will help the department gather the relevant evidence like saving specific web pages, photos and documents which could then be used to initiate a probe.

There are three ways that the tax department can profile a taxpayer. The first method is the basic tax payer master profile that includes information like name, address and past income tax returns.

The ‘Business Intelligence’ part gets a little more creative and ferrets out tax payers that fall under the non compliant category.

Then there’s also the ‘Geographic Information System’ that can zero in on specific areas.

In each case, the income tax department can filter taxpayers based on income, profit, capital and gains.

And, since it’s a machine learning integrate information management system, it will get more efficient over time as it gleans over more data.