CBDT comes out with data mining tool to check tax evasion

Tax authorities in India have come up with a better way to access financial transaction profiles at the click of a button, without intimidating the taxpayer. The Central Board of Direct Taxes (CBDT) will roll out the new data mining tool from next year.

Known as the `Income Tax Business Application', the new tool will allow assessing officers to access all PAN-based information about a taxpayer at one click.

"The Income Tax Business Application, once ready, will vastly improve data mining and business intelligence of the department and the taxman," CBDT chairperson Anita Kapur told reporters on Tuesday. "It will be a robust database, which will include all sorts of financial transactions data of an entity, including human intelligence collected on a person or entity."

Since the new "smart and intelligent" database will include all financial transactions of individuals and entities, the data mining tool would help check evasion.

The tax department is looking to make the process of paying taxes simple and provide immediate redressal to tax payers for their problems, Kapur said.

She said the department is on a drive to widen the tax net. "If you do not take action against evaders, then the message going out is the tax department is allowing people who should be in the tax net to remain outside," she said.

"This (tax evasion) will encourage a system where a person who is outside the tax system will continue to remain outside the tax system," Kapur said, adding that there was a large constituency that's not covered under the tax deduction at source (TDS) regime like small traders.