In order to fix tax loopholes, the Income Tax (IT) department will use Big Data analytics to find out evaders by collecting information such as common address, mobile number and e-mail address to establish relationship between their multiple PANs,as per the media reports.
The department, with support from private firms, will analyse the voluminous data available post demonetization for checking relationships between PAN holders, said the PTI report.
The I-T department plans to hire the Managed Service Provider (MSP) which will design and operationalise analytical solution that will help in collating data, matching it and identifying relationships as well as clustering of PAN and non-PAN data, an official said.
The analytical solution would help the department gather data received from banks, post offices and other sources for linking information and identification of duplicate details.
It will also identify records with errors or other defects for resubmission. "The data quality errors and defects will be communicated to the reporting person or entities, say, banks or post offices for correction and improving data quality," the official added.
The data integration and matching of the PAN based on demonetisation information with I-T databases such as tax returns, TDS, third-party reporting, tax payments would be used to build a comprehensive profile for the taxpayer.
It will help identify link between PAN holders on the basis of relationships (business association, asset and transactional association) available in various databases, the official said.
Also, it will cluster non-PAN demonetised data using common name, address, mobile number, e-mail and bank branch.
Taxpayer segmentation on the basis of taxpayers' status, type of ITR form used, nature of business, taxpayer segment, age of the individual and compliance history will also have to be prepared.