As long as you are alive, you need to pay tax. As a matter of fact, in civilized mankind, you need to pay tax for cremation also – direct or in-direct. So, in life and in death, you cannot avoid taxation. Tax and Death are verily the only sureties in life.
For last decade and a half, in India, tax net is increasing. It will continue to increase. PAN is familiar as PCO (Public Call Office) was in our youth. The tax net is not only increasing, the net is worked up with other ‘networks’ and what is happening is a network of networks. There are hoardings in the city by Tax Department which starts ‘ We are vigilant’ and then there are figures which seem more like a Big Data summary. e,g 40,67547 people deposited more than 10 Lac in cash in their savings account this year.
We may ask with unwilling suspension of disbelief :
a. How these figures are arrived at ?
b. What are the underlying principles guiding the process (the above how)
c. What will be the evolution of this process ?
I shall speculate on the first two questions. The 3rd question leads to opportunity for freelancers.
Yes, the process must have something to do with Big Data. It is unlikley that the process is a manual one. Now if not manual, there will be a process and that process will be algorithm driven and there will be flags associated. There will be false flags also. Like any logical system devised by humans for humans will fall short as soon as nuance and complexity come in ( Google Translate, Automated Voice Agent etc). With ever more ‘transactions’ being radiating from a single data set (PAN —> investment, spending, expense, hi-value movable and immovable asset, travel etc), the system will be continuously evolving. This is not new. Global payment and ecommerce platforms analyse massive amount of subscriber data and they have anti-fraud, risky, suspicious flags and sometimes, admitted by the institutions that there happens false alarms.
Evolution and Opportunities
This process will evolve and one thing is sure : it will have to handle more and more data (increased tax net). Hence, just like SEO as a profession has emerged because Google works on an algorithm which is continiously evolving and is being anticipated, similarly, a new breed of tax professionals will emerge who will study the Big Data of tax and will anticipate what does (or does not ) trigger flags and how to pass through safely.
- Freelancers of India can see tax advisory, TEO (Tax Engine Opimization), Tax Guidance as a neat, interesting, rewarding and scalabale profession with a growing customer base.
- With more and more digitization in tax assessement, collection and reporting, , customer location and TEO location will not matter much. This is very significant, especially for small towns and cities.
- Any freelancer or small business owner with interest in the domain enjoys a very nice competitive advantage because he /she understands the needs, problems and issues of his / her customers (freelancers, sole traders, start-ups, small business)
Today, I was sitting in Calcutta’s Princep Ghat in the afternoon overlooking the body of water Sir Princep saw some 120 years back and was discussing with a friend. The friend, a very senior veteran of India’s IT campaign in four corners of the world was toying with the idea learning and becomiing a licensed professional of alternative medicine. The thought struck me that I can also think of becoming a TEO !
Yes, it makes sense….
Tax and Death are only surties of life and professionals who deal in these two themes in any way will never run out of business.