Finance Ministry reveals the effects of demonetization on undisclosed income and black money
The demonetization exercise has led to the seizure of Rs.900 crore, including cash of Rs.636 crore and admission of undisclosed income of around Rs.7,961 crore through search, and seizure operations conducted by the Income Tax Department in 900 groups between November 2016 and March 2017.
On the evening of November 8, 2016, the government announced the discontinuation of 500 and 1,000 denominations of currency notes from the midnight hours of November 9.
According to Finance Ministry sources, demonetization not only led to the detection of black money, but it also led to an increase in tax collection and the widening of the tax base.
Official sources have informed that post the note ban exercise, for 2017-18, net direct tax collections witnessed a growth rate of 18 percent over 2016-17, which was the highest in the preceding seven fiscal years.
As per the Finance Ministry data, the positive impact of demonetization led to increased tax compliance in the country. During 2017-18, personal income tax advance tax collections rose by 23.4 percent while personal income tax self-assessment tax increased by 29 percent over 2016-17.
Sources said that this showed that demonetization and the subsequent use of bank deposit data by the Income Tax Department had a significant impact on voluntary tax payments by non-corporate and individual taxpayers.
In addition, a growth of 25 percent was achieved in the number of income tax returns (ITRs) filed during 2017-18, which was the highest rate achieved in the preceding five years, they added.
During 2017-18, the number of new ITR filers was about 1.07 crore as against 85.51 lakh during 2016-17, indicating higher levels of compliance due to the transfer of cash into the formal channels of demonetization.
A growth rate of 17.2 percent was achieved in the number of returns filed by corporate taxpayers during 2017-18. It was more than five times the growth rate of 3 percent in 2016-17 and 3.5 percent in 2015-16.
[With Inputs from IANS]
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