Select Your Location
Data is the groundwork, upon which this brand new digital tax world is being set up, and the quality of that result will depend on the superiority of the data that goes in. To keep up with what governments are performing and stay one step ahead of them, tax departments must look at the function of tax through the eyes of data analytics and big data.
The Central Government body, ‘Central Board of Direct Taxes’, is recognizing individuals through a non-filers monitoring system by the way of analytics of data and using it to measure their liability of tax and ordering them to file their income tax returns or submit online response within 21 days. The system of monitoring non-filers will be able to monitor and identify individuals who enter into multi-value transactions and have probable tax liabilities but have still not filed their returns of tax. The scrutiny was approved out to identify non-filers about whom explicit information was available in the database of the Income Tax Department.
Table of Contents
There are number of tax authorities who pull together data from a variety of sources to develop a more absolute picture of companies’ profiles on taxation. Companies are more and more being requested to submit client bills, customs declarations, statements of accounts, bank records, and vendor invoices. All these documents are required to be in prescribed formats as per the Government of India — and on an increased speed schedule often in real time.
Furthermore, the arrangement in which these data is presented may differ from how companies collect and track the data themselves. The Income Tax Authorities are using real-time data analytics engines to authenticate invoices and lag inconsistency, purchase declarations and verify sales, verify payroll, and compare data across jurisdictions. Based on this scrutiny, Income tax authorities make determinations, including audit and tax assessments.
The Income tax authorities’ improved use of data analytics suggest that companies — and their finance and tax departments — need a mindset shift around how they accumulate, analyze and store financial and tax data. The documents must be stored in different places, such as personal hard drives, network shared drives, external providers’ systems, emails and document management systems.
Adding to this particular challenge, the demanded information may be multiplied across different functions and geographic locations. This can make it rigid to find data when it’s required and know when that data has been delivered or collected. These disputes can be mitigated through the expansion of a vigorous analytics system and data management.
The magnitude of short response time and requests for compliance means that companies require advanced analytic capabilities and data management that exceed or meet those used by the authorities of Income Tax. They also required people known with these improved data requirements to maintain and develop those systems.
Further, they must be proactive in taking steps to create files that are “audit ready” when presented information requested to Income tax authorities — mainly in these surroundings of amplified information exchange and transparency.
The Department of Revenue held a high-level meeting to boost proceeds and hit the Rs 1.10 lakh crores target of GST for the period next two months, Rs 1.25 lakh crores in December, and the target of direct tax collection of Rs 13.35 lakh crores. Dr. Ajay Bhushan Pandey, the Revenue Secretary of the state, and senior officials of the Central Board of Direct Taxes (CBDT) had met to plan and rationalize the functions with the help of data analytics and to also allocate precise responsibilities for the tax officers.
One of the significant steps is weekly updates on steps taken for ways to boost revenue and attain goals that were determined in the meeting, according to sources mentioned in the report. Also with respect to pains towards curbing tax evasion, huge ITC or fake claims, the disparity in returns filed etc, it was determined that field configuration under the Principal Chief Commissioners, Commissioners and Members of boards would have to split updates either in on video conferencing or physical meetings every week.
Read our article:Data Analytics in Banking: Application, Challenges & Opportunities
Rajdeep is a law graduate from Guru Gobind Singh Indraprastha University. During his law school he gained vast experience in corporate and commercial law. He likes traveling and performing stand-up comedy.
The Alternative Investment Funds (AIFs) Pro-rata and Pari-Passu Rights Proposal Consultation Pa...
The Financial Action Task Force, i.e. FATF (the Force), is the global money laundering and terr...
Advance tax refers to the payment of the tax liability before the end of the relevant financia...
On 11.12.15, the Hon’ble Delhi High Court (HC) pronounced a landmark judgement in the case ti...
Money laundering can be defined as the process of illegal concealment of the origin of money ob...
Every assessee in India is obligated to file an income tax return and make the timely payment o...
In the recent past, India has seen burgeoning demand for internet and smartphones. The rapid ri...
The Securities and Exchange Board of India (SEBI), the capital markets regulator, has recommend...
The objective of the enactment of the Prevention of Money-laundering Act, 2002, i.e. PMLA (the...
Tax planning is a continuing effort and a management strategy for ensuring the minimization of...
Are you human?: 3 + 6 =
Easy Payment Options Available No Spam. No Sharing. 100% Confidentiality
Capital Gains are derived in all such cases where the profit has realized from investments whereby the capital asse...
30 Jul, 2018
On 20th December 2022, the Income Tax Appellate Tribunal Mumbai pronounced a judgement in the case titled ACIT Vs T...
07 Jan, 2023
Red Herring Top 100 Asia enlists outstanding entrepreneurs and promising companies. It selects the award winners from approximately 2000 privately financed companies each year in the Asia. Since 1996, Red Herring has kept tabs on these up-and-comers. Red Herring editors were among the first to recognize that companies such as Google, Facebook, Kakao, Alibaba, Twitter, Rakuten, Salesforce.com, Xiaomi and YouTube would change the way we live and work.
Researchers have found out that organization using new technologies in their accounting and tax have better productivity as compared to those using the traditional methods. Complying with the recent technological trends in the accounting industry, Enterslice was formed to focus on the emerging start up companies and bring innovation in their traditional Chartered Accountants & Legal profession services, disrupt traditional Chartered Accountants practice mechanism & Lawyers.
Stay updated with all the latest legal updates. Just enter your email address and subscribe for free!
Chat on Whatsapp
Hey I'm Suman. Let's Talk!