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2018

Use of Big Data Analytics in Income Tax Assessment

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The human race is undergoing a new era of technological revolution. Data have become the new oxygen in our socio-economic environment. Machine Learning, Big Data Analytics, Artificial Intelligence etc. are the new buzz words. Application of Big Data Analytics is increasingly applied to numerous fields such as marketing, economics, agriculture, finance, telecom, healthcare etc. The field of direct and indirect taxes are no exception to this.

Application of Technology in Income Tax Assessment:

In the recent inaugural function of the Rajaswa Gyan Sangam, Prime Minister Narendra Modi urged Income Tax Officials to use of big-data analytics in the income tax assessment process. The Income Tax Department will focus on the widening of tax base and maximise e-assessment to cut down on human interface. Also, efforts will be made by the Central Board of Direct Taxes (CBDT) to exceed the income tax collection target set for current fiscal by use of big-data analytics, said the statement after the end of the two-day annual retreat of central and state government tax officers. Verification of data collected during demonetisation and SFT (statement of financial transactions) was also one of the main themes of the conference. The conference also discussed strategies for the widening of tax base with the help of big data analytics. This move is critical not only for revenue maximisation for the government but also for clearing the pending cases and instil confidence among honest taxpayers and uproots corruption.
Revenue Secretary Hasmukh Adhia said that revenue was a cross-sectoral subject and required coordination between both the CBDT and CBEC. He encouraged that officers of both CBDT and CBEC to share best practices with each other regularly.
The CBDT said in the conference that "it was decided that assessing officers be encouraged to maximise e-assessment in a phased manner and to ensure that work be completed online so that there is complete transparency".
Strategies for revenue maximisation were discussed at length especially since the CBDT has been tasked to collect revenue of Rs 9.80 lakh crore in the present fiscal. The officers were urged to utilise data effectively such that the target for collection of Personal Income Tax should not only be met but also be exceeded.

Litigation Management:

As a step towards effective litigation management, CBDT aims to achieve the twin objectives of substantially reducing the number of appeals and the disputed demand before CIT (appeals), it said.
"The focus is to dispose off 70 percent of smaller appeals and 30 percent of high demand appeals including 100 percent of appeals involving disputed demand of Rs 50 crore and above," the CBDT said.

Redressed of Grievances:

With regard to redressal of grievances, the CBDT said 85 percent of grievances have been disposed off online through the e-nivaran portal. There was emphasis on redressal of grievances for both CBDT and CBEC.
It said that special focus should be given to popularise the Operation Clean Money portal such that an environment of voluntary compliance can be created.
The indirect tax wing - Central Board of Excise and Customs - discussed issues relating to ease of doing business, litigation management among others. "There was also a Sunshine session to highlight a formation's initiative in improving taxpayer services or individual initiative outside of the regular area of responsibility," the statement said.
Besides, Adhia underlined the importance of increasing efforts to garner revenue in light of the data that is available post demonetisation. He also stressed that genuine grievances of taxpayers should be disposed off on priority and taxpayers should be treated with courtesy.

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