Fraud Detection Methods

Income Tax Officers May Access Your Emails and Social Media Accounts From April 2026. From April 1, 2026, the Income Tax Department will have expanded powers to access individuals’ digital accounts if they suspect undisclosed income or assets. This includes emails, social media, bank accounts, trading platforms, and online investments. 🔹 Rule 1: Access to Digital Accounts Officers can now access your social media accounts, email, WhatsApp, cloud storage, and online financial accounts. The reason is simple: undisclosed income and hidden assets are increasingly stored digitally. Authorities want to ensure transparency and prevent black money from being hidden online. - Example: If someone frequently posts luxury trips or expensive purchases but shows minimal declared income, it will trigger scrutiny. - What you can do: Keep all your digital financial records in order, avoid flaunting a lifestyle that does not match your declared income, and ensure full disclosure of assets. 🔹 Rule 2: Lifestyle Verification Authorities can check your grocery bills, restaurant bills, travel expenses, personal purchases, and major investments. The reason is to compare your lifestyle with your reported income. Overspending compared to declared income raises red flags. - Example: Posting Dubai trips, expensive dinners, or luxury shopping on social media while reporting a modest income will invite investigation. - What you can do: Maintain records of all significant expenses and reconcile them with your income. Transparency is the only shield. 🔹 Rule 3: Legal Override of Security Codes Passwords, PINs, and digital locks will not protect accounts if there is suspicion of tax evasion. Officers can override security to access emails, accounts, and cloud storage. - Reason: Hidden digital assets can no longer remain secret when taxes are under investigation. - What you can do: Ensure proper reporting and documentation. Avoid keeping undisclosed digital income or assets. 🔹 Rule 4: Importance of Full Disclosure The law emphasizes that any income, property, gold, jewelry, or valuable items must be reported. The reason is to strengthen compliance, curb black money, and ensure fairness in the system. - Example: Even small undeclared income from trading platforms, online sales, or gifts can lead to legal action. - What you can do: Declare all income sources honestly. Organize accounts and records to avoid future scrutiny. 🔹 Rule 5: Flex Wisely The new rules make it clear that lifestyle and social media posts are under indirect scrutiny. Flaunting wealth without proper documentation is risky. -Reason: Authorities use public digital information as indicators of possible tax evasion. -What you can do: Be mindful of what you share online. Focus on transparency and responsibility rather than image. Starting in April 2026, transparency will come into focus. How much of your digital privacy are you willing to exchange for compliance?

Last month, 33 freelancers wasted 746 Connects on fake jobs on Upwork. Here's the 30-second check that saves you from scams: 1. Avoid scam jobs by checking for these red flags: - Multiple identical job postings from different accounts - Vague job descriptions with minimal details - Unverified payment methods 2. Skip non-serious clients by verifying: - Hiring history (have they actually hired anyone?) - Payment verification status - Client location (does it match your target markets?) 3. Focus on relevance: - Only apply to jobs that perfectly match your skills - Don't waste Connects on projects requiring expertise you don't have - Be honest about your capabilities 4. Manual qualification process: - Review client history before applying - Check their average hourly rate paid - Look at their feedback from other freelancers 5. Consider automation with AI tools like GigRadar: - Automatically qualify/disqualify jobs based on your criteria - Generate customized cover letters for better response rates - Save time and Connects by focusing only on promising opportunities Remember: Upwork returns Connects for some rejected proposals, but not all. Being selective is your best strategy for maximizing returns.

Income Tax Department Cracks Down on Bogus Claims of Deductions & Exemptions In a massive verification drive launched on 14th July 2025, the Income Tax Department is tackling fraudulent ITR filings involving fictitious claims of deductions and exemptions under the Income-tax Act, 1961. Key Highlights: - Investigations revealed organized rackets involving ITR preparers misusing provisions under Sections 10(13A), 80GGC, 80E, 80D, 80EE, 80EEB, 80G, 80GGA, and 80DDD. - Many returns were filed using temporary email IDs — leading to taxpayers missing official notices. - Search operations across states like Maharashtra, Tamil Nadu, Delhi, Gujarat, Punjab, and MP revealed misuse by various groups. - Over ₹1,045 crore in false claims have already been voluntarily withdrawn by ~40,000 taxpayers after outreach efforts. - Penalties and prosecution await non-compliant filers. This is a timely reminder: - File accurate tax returns. - Avoid getting misled by unauthorized intermediaries promising inflated refunds. - Always review the deductions and exemptions being claimed in your name. The Department’s message is clear: Voluntary compliance is encouraged — but fraudulent claims will not go unnoticed. #IncomeTax #ITR2025 #TaxCompliance #CBDT #Deductions #RefundFraud #TaxReturn #IndiaTax #Finance #TaxAlert

🔍 TRANSFER PRICING AUDIT TRIGGERS 💬 What Tax Authorities Look For 📌 Transfer pricing is under the microscope more than ever. Tax authorities across the globe are ramping up scrutiny — and these are the top red flags that could get your multinational in trouble 👇 1️⃣ REPEATED LOSSES If a subsidiary keeps reporting losses year after year — while the overall group stays profitable — especially where the subsidiary is located in a high-tax jurisdiction, tax authorities will raise their eyebrows. Losses should reflect genuine business conditions, not aggressive tax planning. Business conditions that may lead to genuine losses include businesses in the early stage of their lifecycle (say 1-5 years depending on industry) , economic recession or major policy changes. 2️⃣ RELATED-PARTY LOANS WITHOUT INTEREST/TRANSACTIONS WITHOUT CONSIDERATION Intercompany loans must mirror market terms. Zero- ,high or low-interest loans may indicate hidden profit shifting — especially if they're with affiliates in low-tax jurisdictions. Also , triggers may arise where goods or services/intangibles are exchanged without payment made or received. Tax Authorities will naturally input values to mirror open market conditions. 3️⃣ SUDDEN PROFIT SHIFTS TO TAX HAVENS A classic trigger. If profits that used to be reported in high-tax countries suddenly migrate to low- or zero-tax jurisdictions, expect questions. Substance over form is the new gospel. The Country-by-Country Report has given Tax Authorities visibility about the overall allocation of MNEs resources across different jurisdictions where they operate. 4️⃣ SIGNIFICANT SHARE OF RELATED-PARTY TRANSACTIONS TO 3RD PARTY TRANSACTIONS If a company does more business with its own affiliates than with external parties — especially in key revenue lines — authorities scrutinize pricing, margins, and comparability. 5️⃣ TRANSACTIONS WITH LOW-TAX JURISDICTIONS Even routine business with entities in tax havens attracts attention. Authorities want to know: are these structures commercial, or just conduit arrangements? 💡 Takeaway Transfer pricing isn't just a documentation exercise. It's about aligning profits with real value creation. Be prepared, be compliant, be transparent. 🔁 If you're in tax, finance, or strategy — save & share this with your team. These 5 boxes could save you billions in additional taxes! #TransferPricing #TaxCompliance #InternationalTax #TPAudit #MultinationalStrategy #BEPS #TaxGovernance #NigeriaTax #LinkedInLearning

𝐈𝐧 𝐈𝐧𝐝𝐢𝐚, 𝐰𝐞 𝐝𝐨𝐧’𝐭 𝐣𝐮𝐬𝐭 𝐜𝐨𝐧𝐝𝐮𝐜𝐭 𝐞𝐥𝐞𝐜𝐭𝐢𝐨𝐧𝐬—𝐰𝐞 𝐨𝐫𝐜𝐡𝐞𝐬𝐭𝐫𝐚𝐭𝐞 𝐭𝐡𝐞 𝐰𝐨𝐫𝐥𝐝’𝐬 𝐥𝐚𝐫𝐠𝐞𝐬𝐭 𝐟𝐞𝐬𝐭𝐢𝐯𝐚𝐥 𝐨𝐟 𝐝𝐞𝐦𝐨𝐜𝐫𝐚𝐜𝐲! 𝐖𝐡𝐢𝐥𝐞 𝐬𝐨𝐦𝐞 𝐜𝐨𝐮𝐧𝐭𝐫𝐢𝐞𝐬 𝐜𝐨𝐮𝐧𝐭 𝐯𝐨𝐭𝐞𝐬 𝐨𝐯𝐞𝐫 𝐚 𝐜𝐨𝐟𝐟𝐞𝐞 𝐛𝐫𝐞𝐚𝐤, 𝐰𝐞 𝐜𝐨𝐮𝐧𝐭 𝐭𝐡𝐞𝐦 𝐨𝐯𝐞𝐫 𝐦𝐮𝐥𝐭𝐢𝐩𝐥𝐞 𝐬𝐮𝐧𝐫𝐢𝐬𝐞𝐬. 𝐁𝐮𝐭 𝐰𝐡𝐚𝐭 𝐢𝐟 𝐀𝐈 𝐚𝐧𝐝 𝐁𝐥𝐨𝐜𝐤𝐜𝐡𝐚𝐢𝐧 𝐬𝐭𝐞𝐩𝐩𝐞𝐝 𝐢𝐧? 𝐈𝐦𝐚𝐠𝐢𝐧𝐞 𝐚𝐧 𝐞𝐥𝐞𝐜𝐭𝐢𝐨𝐧 𝐫𝐞𝐬𝐮𝐥𝐭 𝐛𝐞𝐢𝐧𝐠 𝐝𝐞𝐜𝐥𝐚𝐫𝐞𝐝 𝐟𝐚𝐬𝐭𝐞𝐫 𝐭𝐡𝐚𝐧 𝐲𝐨𝐮𝐫 𝐔𝐏𝐈 𝐭𝐫𝐚𝐧𝐬𝐚𝐜𝐭𝐢𝐨𝐧! As we celebrated National Voters’ Day recently on January 25, it is not just a symbolic occasion but a reflection of India's democratic evolution. With nearly 1 billion registered voters, ensuring a fair, transparent, and efficient electoral process is a challenge. 𝐄𝐬𝐭𝐨𝐧𝐢𝐚 has already implemented Blockchain-based voting, revolutionizing digital elections. Countries like Switzerland and France have experimented with technology-driven voting systems, but their populations are significantly smaller compared to India. The biggest game-changer could be Blockchain-enabled remote voting in India. 𝐌𝐢𝐥𝐥𝐢𝐨𝐧𝐬 𝐨𝐟 𝐦𝐢𝐠𝐫𝐚𝐧𝐭 𝐰𝐨𝐫𝐤𝐞𝐫𝐬, 𝐍𝐑𝐈𝐬, 𝐚𝐧𝐝 𝐜𝐢𝐭𝐢𝐳𝐞𝐧𝐬 𝐢𝐧 𝐫𝐞𝐦𝐨𝐭𝐞 𝐚𝐫𝐞𝐚𝐬 𝐦𝐢𝐬𝐬 𝐯𝐨𝐭𝐢𝐧𝐠 𝐛𝐞𝐜𝐚𝐮𝐬𝐞 𝐭𝐡𝐞𝐲 𝐚𝐫𝐞 𝐚𝐰𝐚𝐲 𝐟𝐫𝐨𝐦 𝐭𝐡𝐞𝐢𝐫 𝐡𝐨𝐦𝐞 𝐜𝐨𝐧𝐬𝐭𝐢𝐭𝐮𝐞𝐧𝐜𝐢𝐞𝐬. 𝐁𝐥𝐨𝐜𝐤𝐜𝐡𝐚𝐢𝐧 𝐜𝐚𝐧 𝐚𝐥𝐥𝐨𝐰 𝐭𝐡𝐞𝐦 𝐭𝐨 𝐜𝐚𝐬𝐭 𝐭𝐡𝐞𝐢𝐫 𝐯𝐨𝐭𝐞𝐬 𝐬𝐞𝐜𝐮𝐫𝐞𝐥𝐲 𝐟𝐫𝐨𝐦 𝐚𝐧𝐲𝐰𝐡𝐞𝐫𝐞 𝐢𝐧 𝐭𝐡𝐞 𝐰𝐨𝐫𝐥𝐝. ✅Blockchain technology ensures that once a vote is cast, it is recorded on an immutable digital ledger, eliminating tampering or post-election manipulation. ✅AI-powered election monitoring can instantly detect any suspicious activity, such as fake identities, voter suppression, or electoral fraud. ✅AI-driven voter management systems can eliminate duplicate registrations, ensuring an error-free electoral roll. ✅AI-powered chatbots and digital assistants can provide real-time voter guidance, increasing awareness and participation. 𝐈𝐧𝐝𝐢𝐚 𝐡𝐚𝐬 𝐚𝐥𝐫𝐞𝐚𝐝𝐲 𝐝𝐢𝐬𝐫𝐮𝐩𝐭𝐞𝐝 𝐠𝐥𝐨𝐛𝐚𝐥 𝐬𝐲𝐬𝐭𝐞𝐦𝐬 𝐰𝐢𝐭𝐡 𝐢𝐭𝐬 𝐭𝐞𝐜𝐡-𝐟𝐢𝐫𝐬𝐭 𝐚𝐩𝐩𝐫𝐨𝐚𝐜𝐡: ✅ UPI – India revolutionized digital payments, processing 10+ billion transactions monthly, setting a benchmark for financial inclusion. ✅ Aadhaar – The world’s largest biometric ID system with 1.4 billion users, ensuring seamless identity verification. ✅ CoWIN – A digital marvel that facilitated 2 billion+ COVID-19 vaccinations, proving India’s capability in handling large-scale, tech-driven operations.✅ DigiLocker – Transformed document authentication, enabling secure, paperless governance. ✅ FASTag – Automated toll collection using RFID, reducing congestion on highways. If India successfully integrates AI and Blockchain in elections by 2029, it will become the first major democracy to conduct fully secure, tamper-proof elections.

AML Sanctions Screening Checklist – Step-by-Step Guide Step 1: Collect Customer Information Before conducting a sanctions check, ensure that you have accurate and complete customer data, including: -Full Legal Name (individual or entity) -Date of Birth (DOB) (for individuals) -Nationality & Country of Residence -Government-Issued Identification (passport, national ID, business registration) -Business Name & Ultimate Beneficial Owner (UBO) (for companies) -Registered Address & Contact Information -Banking & Transaction Details Step 2: Screen Against Sanctions Lists Run the customer’s information against global, regional, and local sanctions lists: Major Global Sanctions Lists - OFAC SDN List (U.S.) – Specially Designated Nationals and Blocked Persons - UN Sanctions List – Security Council Consolidated List - EU Sanctions List – European Union’s Restricted Entities - UK Sanctions List (OFSI) – UK Financial Sanctions - FATF Blacklist & Greylist – High-risk & monitored jurisdictions - Interpol & FBI Most Wanted Lists – Criminal entities - World Bank Debarred List – Banned organizations Use automated AML screening tools for bulk or ongoing checks: Refinitiv World-Check LexisNexis Bridger Insight Dow Jones Risk & Compliance ComplyAdvantage Step 3: Investigate Matches & False Positives If the system flags a match, take the following steps: A. Verify the Match - Check for name variations or common name issues. - Compare DOB, nationality, and other identifiers. - Cross-check against customer records, government IDs, and KYC documents. B. Conduct Enhanced Due Diligence (EDD) If Risky - Request additional documentation (Source of Funds, Source of Wealth, business contracts). - Conduct adverse media searches for signs of financial crime. - Monitor transaction history for suspicious activity. 🚨 Red Flags Indicating Higher Risk: Customer linked to a high-risk country (FATF blacklist/greylist). Large, unusual transactions in sanctioned jurisdictions. Complex business structures with opaque ownership. Step 4: Escalate & Report Suspicious Matches If a match is confirmed and presents a risk of sanctions violations: - File a Suspicious Activity Report (SAR/STR) with your national Financial Intelligence Unit (FIU) (e.g., FinCEN, FCA, AUSTRAC). - Notify Compliance & Risk Teams to review and take action. - Freeze or Restrict Transactions if necessary under AML laws. - Engage Legal & Regulatory Experts for next steps. Step 5: Monitor & Review Regularly - Conduct periodic re-screening for ongoing customers. - Monitor transactions in real-time for high-risk accounts. - Update AML software & regulatory lists to stay compliant. - Train compliance teams on new sanctions & red flags. Final Compliance Actions - Keep records for 5-7 years as per AML regulations. - Ensure regulatory reporting compliance for all sanctions-related investigations. - Update customer risk ratings & enforce controls accordingly. #AML #KYC #CDD #EDD #Compliance #SanctionScreening

Stop wasting your connects on Upwork.😩 When you’re looking for jobs on Upwork, it’s easy to get excited when you see a good fit. But before you apply, it’s important to know what to watch out for. Not every job post is legit, and some clients might not have your best interests at heart. You’ve worked hard to build your skills, so it’s essential to protect yourself by spotting the red flags. Here are a few things to look out for: 🚫Bad Reviews: Always check the client’s reviews from other freelancers. If you notice repeated complaints or negative experiences, it’s a clear sign to steer clear. If other freelancers have had a tough time working with them, chances are you might too. 🚫Client’s Spending on Upwork: Check how much the client has spent on the platform. If they haven’t spent any money at all, it might be risky to apply. They could be new, or worse, a fake account. Either way, you don’t want to be the guinea pig for someone who isn’t serious about paying for work. For me, you must have spent more than $1,000 before I can apply. You can do $500 etc. 🚫No Verified Payment: A client with a verified payment method is a sign that they are more likely to pay for the work. If their payment isn’t verified, it’s another red flag. Don’t waste your time on clients who can’t even verify their payment info. 🚫Vague Job Descriptions: If a job post is super vague or unclear about the work involved, it’s a sign the client hasn’t thought things through or is hiding something. You deserve clarity on what’s expected of you, so if things feel off, trust your gut. ✅Always Use the Time Tracker: This is something you should ALWAYS DO. If you’re being paid hourly, use Upwork’s desktop time tracker always. It’s your best protection if a client tries to say you didn’t work the hours you logged. The tracker also helps with any potential disputes, as it records your activity while you work. Working on Upwork can be a fantastic way to grow your freelance career, but it’s crucial to protect yourself. Always check for these red flags before applying to any job, and make sure you’re getting paid for every hour worked by using the time tracker. Be smart, stay safe, and don’t let a bad client ruin your experience. Share your Upwork experience or any you've heard of in the comments, let’s learn! I'll go first! 👇🏼

Benford’s Law: the simple algorithm that can catch financial fraud. Naturally occurring numbers aren’t random, they follow a predictable first-digit pattern. The algorithm involves calculating the probability of a leading digit being 'd' as log10(1 + 1/d), where 'd' is a digit from 1 to 9.  If you analyse a dataset of invoice amounts and find that the digit 1 appears as the leading digit more than 30% of the time, while digits 9 appears less than 5% of the time, it could be a potential indicator that the data is not following Benford's Law, suggesting that further investigation may be warranted.  No AI needed just maths, here's an 11 line python implementation, to showcase how simple this algorithm actually is. #DataScience #FraudDetection

Important Post from Litigation point of view. Please save/bookmark. Research by Abhishek Raja "Ram"; 9810638155 GST Department usually denies ITC on these grounds: 1) Supplier Registration has been cancelled Retrospectively 2) You have received Bogus/Fake ITC/Supplies Relevant Sections: Sec. 16 ITC Sec. 155 Burden of Proof A few case laws and documentary evidence could help you claim your ITC. 1. Vishal Kumar Arya vs Assistant Commissioner, State Tax - Calcutta High Court (2023) 2 TMI 36 ITC cannot be denied merely because the supplier's registration was cancelled. The decision to deny ITC should be made on the merits after considering the documents that the appellant may have filed. 2. Engineering Tools Corporation vs The Assistant Commissioner (State Tax) - Madras High Court (2024) 2 TMI 855 The Petitioner may be called upon to prove evidence of the existence of the supplier at the relevant point of the time of purchase. In addition, the Petitioner may be called upon to prove that transaction was genuine by providing relevant documents such as: ➡️ Tax Invoice ➡️ e-Way Bill ➡️ Lorry Receipts ➡️ Delivery Challans ➡️ Proof of Payments etc 3. Sanchita Kundu - Calcutta High Court (2022) 63 GSTL 413 Petitioner’s entitlement of benefit of Input Tax Credit should be decided by considering documents relied on for proving that all purchases and transactions in question were genuine and transactions in question were made before cancellation of registration of suppliers. 4. LGW Industries Ltd. vs Union of India - Calcutta High Court (2021) 12 TMI 834 :: (2023) 4 CENTAX 373 Where input tax credit was denied on ground that suppliers were non-existent but petitioners argued that transactions were genuine, Authorities should consider petitioner's entitlement to ITC afresh. 5. Gargo Traders vs Joint Commissioner of Commercial Tax - Calcutta High Court (2023) 75 GSTL 3 ITC claim was rejected on the grounds of cancellation of registration of supplier with retrospective effect without considering whether the documents relied on by the petitioner were proper or not; the Authority should consider the petitioner's grievance afresh. 6. National Plasto Moulding vs State of Assam - Gauhati High Court (2024) 21 CENTAX 182 Show cause notice issued against purchasing dealer was to be set aside following case of On Quest Merchandising India (P.) Ltd., wherein it was categorically held that in case the selling dealer had failed to deposit tax collected by it, a purchasing dealer could not be punished for an act of the selling dealer. 7. On Quest Merchandising India Pvt. Ltd. vs Govt. of NCT of Delhi - Delhi High Court (2018) 10 GSTL 182 For selling dealer defaults, the purchasing dealer had to bear the consequence of denial of credit. Also, it was applicable without differentiation between bona fide purchasing dealers and those that were not. Hence, it was violative of Article 14 of the Constitution of India. remaining part in comments.

Sanction Screening process in AML KYC Sanction Screening Process in AML/KYC is a critical component of a financial institution’s compliance program, aimed at preventing transactions with individuals, entities, or countries subject to economic or trade sanctions. Here’s a step-by-step overview of the Sanction Screening process: 1. Data Collection Collect customer details during Customer Due Diligence (CDD) or Know Your Customer (KYC) onboarding. Key data fields include: Full Name Date of Birth Nationality Address Identification Numbers (Passport, PAN, etc.) Business/Organization details (for entities) 2. List Aggregation Sanction screening uses updated lists from official authorities like: OFAC (U.S. Office of Foreign Assets Control) UN Sanctions List EU Sanctions List UK HMT Sanctions List Local regulators (e.g., SEBI, RBI in India) Third-party list providers (e.g., World-Check, Dow Jones, Refinitiv) 3. Screening Types There are two main types of sanction screening: a. Customer Screening (Name Screening) Performed during onboarding and periodically (Ongoing Due Diligence). Checks customer names against sanctions lists. b. Transaction Screening Real-time screening of transactions (e.g., SWIFT messages). Verifies that sender/receiver names, intermediaries, and involved countries are not sanctioned. --- ⚙️ 4. Matching Logic Uses logic and algorithms to match names (considering spelling variations, aliases, transliteration). Uses phonetic and linguistic rules. 5. Alert Generation If a match is found, the system raises an alert. Alerts can be: True Positive: Legitimate match False Positive: Non-matching individual/entity that appears similar 6. Alert Review and Escalation Compliance analysts investigate alerts using: Customer KYC documents Additional screening tools Public databases (e.g., news, registries) Actions taken: Escalate to MLRO (Money Laundering Reporting Officer) File STR/SAR (Suspicious Transaction Report) Block/hold transactions Report to regulators 7. Ongoing Monitoring Periodic re-screening of customers as part of Ongoing Due Diligence (ODD). Sanction lists are updated frequently – systems must stay up-to-date. 8. Record Keeping & Audit Maintain logs of: Screening results Decisions taken Alert resolution process Regulatory filings Tools Used Dow Jones Watchlist Refinitiv World-Check Fircosoft LexisNexis Bridger Insight Accuity SAS AML