The government may be looking to use data obtained from Goods and Services Tax (GST) filings to track those who are escaping income-tax, two people close to the development said.
The government is setting up a mechanism wherein data obtained through GST reporting could be correlated with the income-tax filings.
While the project is still in the initial stage, the government wants to create a database whereby income of companies and their promoters could be matched with that of the tax returns filed, said a person in the know.
It is still unclear whether the government would use this data to dig out tax evasions in the earlier years or whether this will only be for prospective tax scrutiny.
Unlike the earlier tax regime, GST leaves a trail, especially for the business of size, and it becomes hard to underreport income or exaggerate expenses.
Industry trackers said tax officers don’t have to go through the sea of data to make sense as big data analytics could do the same for them and throw results or raise red flags.