Who would have ever thought that posting pictures of foreign travels, 5-star hotels, luxury cars or lavish events on social media may land you a notice from the Tax Authorities? Yes! Surprisingly this is true, so before posting your pictures beware you’re being watched.

The IT department will now be putting your social media account under scrutiny to verify if your declared income is in line with the kind of lifestyle you portray on your social media account. Until now, the IT department depended largely on annual information return (AIR) by banks, credit card companies, mutual funds and registrar (for real estate deals) for information on high-value transactions. Data culled from social media will make it easier for authorities to validate AIR information.

However the honest taxpayer need not worry since the IT department does not want to harass the honest tax payers. The finance minister’s interim budget speech indicated that only 0.5% of tax returns were selected for scrutiny. For individual taxpayers, until the department has some corroborative evidence, it does not initiate a scrutiny. But for those who try to outsmart the authorities, your show off on social media may invite a tax notice to your doors.

The Income Tax Department already has many tools to act against tax evaders. It has access to individuals’ bank accounts, PAN numbers, and data with the Reserve Bank of India. With the introduction of Big Data Analytics into the Income Tax (I-T) Department’s system of tools to stop tax evasion starting April 1, 2019. The department has added one more weapon in their arsenal. The Rs 1,000 crore programme would track your social networking profiles, keeping a close eye on the expenditure patterns through the pictures and videos uploaded

If the purchases and travel expenses are found to be mismatched with the declared income of a person, the I-T officials would be informed and actions would follow against the suspicious.  The I-T Department has also given the tax officials access to the software from March 15th and the tracking will be going to start from the inception of the new financial year.

Legally Collecting Information Online is prohibited. According to The Information Technology Act 2000, any step taken by the government to gather personal information online is prohibited. It also falls under the purview of breach of privacy. Crucially, evidence gathered online about purchases made by an individual will not be admissible in court. This makes any effort by the IT department to gather information from social media solely for the purpose of admitting it in court a nonstarter. How the Judiciary will act upon such cases on account of privacy is yet to be seen in future. However the plan of the government seems promising since an average internet user spends about 4 hours on the internet.


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