Your GST, overseas bets are now on taxman’s radar

The Income Tax Department in India is expanding the data it collects from taxpayers, incorporating financial information such as goods and services tax returns, foreign remittances, investments in mutual funds through unregulated channels, and transactions in off-market securities. This move is part of the department's efforts to strengthen its ability to detect discrepancies and prevent tax evasion.

The department has also authorized the Director General of Income Tax (Systems) to upload this additional information within three months of receipt. The new framework is designed to ensure that income and transactions declared in tax returns align with information generated by other agencies and financial intermediaries. This includes allowing data from other taxpayers' income tax returns, as well as transactions reported by depositories, registrars, and transfer agents.

The department's ability to access this broader range of data means that taxpayers will have a greater incentive to report their income accurately. Additionally, the provision that allows information from another taxpayer's income tax return to be reflected in the AIS is a significant development, enabling the tax department to track relevant information across multiple sources.

Taxpayers will still have the opportunity to contest any inaccuracies in the AIS, which can be reported through the income tax portal or an offline utility.