The government is now ready to tighten up the scrutiny of all the taxpayers as according to one of the officials. the tax department will now compare multiple tax data of an individual to ascertain any tax leakage.
According to the latest plan of the tax department, it will analyze all the data of goods and services tax, transfer pricing submissions and income tax filing of individuals and will synchronize to match them which will further give more insight into the tax liability.
This particular tax analysis made some of the companies including Multinationals including banks, fast-moving consumer goods (FMCG) companies, tech firms and automobile manufacturers doubt over their tax liability
Many of the companies have started consulting with the tax advisors to guide them through a proper tax payment procedure to avoid any further tax penalty.
As cleared by the tax department, now the royalty payments, CEO salaries and valuations of Indian operations will be under the scrutiny of both the direct tax and transfer pricing departments.
A tax analyst stated that “It is necessary for businesses to take a comprehensive view while filing their GST annual returns this year, considering their submissions in their income tax and transfer pricing filings, as these might be compared on various parameters.”
The said rule may start conflicts between multiple tax departments including the major import of services from concerned parties. Almost all the multinational companies and importing companies will be under this scanner.
This tax scrutiny will also lead to increased compliance and manpower inclusion as more and more tax solution will be needed to solve out the liability.
