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Taxmen to keep watch on your spending

india Updated: Feb 24, 2009 01:44 IST
Manish Pachouly
Manish Pachouly
Hindustan Times
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The Next time you book a five-star hotel for marriage in family, be sure the payment made for it reflects in your income tax returns. If you fail to do that, there are chances that tax officials would come knocking your door.

This is because the Income Tax Department has started “360 degree profiling” of big taxpayers. Under the system, all the information of big assessees would be kept in one folder and would be available to selected tax officials just with a mouse click.

The system has already started in New Delhi from Friday and is on trial basis in Mumbai where it would start soon.

S.S.N. Moorthy, Chairman of Central Board of Direct Taxes confirmed that such a system has started and would run at three to four stations in the country including Mumbai. He refused to give further information.

However, other senior officials in the income tax department said that the system would store every detail of the big taxpayers including house and car purchases, foreign country trips in a year, booking expensive marriage halls or grounds and credit card payments. It would also have the details of the taxpayers’ financial deals in the country and abroad as well as their various sources of income. The system would also have minute details like taxpayers’ family tree, their assets, liabilities, if they were investigated by any other agency and if any of them were involved in money laundering activities.

“All these information would be collated and linked to the assessees permanent account number (PAN),” said a senior official requesting anonymity.

Moreover, the ‘smart’ assessees who sometimes try to ditch the department by making slight variations in their names while going for big expenditures could now be easily caught. “That is because the new system would cross-check the identity of the person with his bank account numbers if due to variation in name it is not matched with the PAN,” the official said.

Officials said that if details in tax returns do not match with the taxpayer’s information in the 360 degree profiling system, the case would be automatically picked up for further scrutiny.

About the benefit of the system, the official said that at present they have to follow lengthy procedures to find out such minute details of an assessee. “So far we were doing it only in cases where we suspected tax evasion,” the official said adding that now all the big taxpayers’ cases would be kept in this new system.

Officials said the information would be available only to authorities of investigation wing who conducts raids and surveys, central information bureau of the department and commissioners of income tax.