Beware, IT Dept Is Keeping Tabs On Your High Value Online Purchases
Taking a leaf out of the US Government’s book which spied on international leaders, Indian income-tax authorities are going the extra-mile to ensure the tax evaders are caught.
In order to ensure everyone pays his or her amount of fair income-tax, the IT dept. had run campaigns to educate and aware customers. They had banks in their loop which provided them information regarding credit and debit cards’ usage.
But the big rats with lots of hard cash were never trapped, the ones who always transacted in cash not to leave a trail behind. In a country where less than 3% of the more than 100 crore population pay income tax, widening the base has not been easy.
Now, in a novel method to catch the potential tax defaulters, Indian income-tax authorities are going the ‘digital’ way. They are tracking customers buying online and paying in cash, thus having evaded IT authorities since years.
But this is not your usual brick-and-mortal stores where you go and use your wads of cash and come out happily, splurging till you are satisfied. Online transactions are different. Here buyers tend to leave a digital trail that is available to the Income-Tax department, which uses smart software to map an individual’s spending to the filed returns.
Why we pay cash?
Its our age old mentality of not wanting to pay till we actually receive it. In India, up to 60% of the purchases done online are through cash-on-delivery, where a customer pays for a product at the time of receiving it, according to a study by Internet and Mobile Association of India and audit firm KPMG. And this habit, which till yesterday didn’t leave a trail, is no longer the escapist’s route.
IT officials say: “We are getting data from various sources that is helping us profile people on their spending…The spending data can be matched with taxes paid and evaders can be caught. Collating data and then using it intelligently helps tackling tax evasion in a non-intrusive and effective manner.”
How much can you buy via cash on delivery?
While bigger players like Flipkart and Snapdeal have a limit of about Rs 50,000, smaller peers typically have it at about Rs 20,000.
Will the big fish be caught?
Those who are smart enough to consistently evade tax are also smart enough not to do anything online. They would rather walk into stores, throw cash and pick up stuff. It is difficult for hardened evaders to suddenly change their habits.
But this is actually a good move in the national interest. Sooner or later, tax-evaders will be caught. This is just one method which the IT authorities are using. Last year, the tax department had sent out letters to those found spending large amounts of money, but had not filed their returns. It helped to bring many more into the tax fold. The government plans to collect over Rs 6.68 lakh crore in direct taxes in 2013-14.