Responding to criticism over the failure of the note ban by the BJP government in 2016, union finance minister Arun Jaitley on Thursday said the larger purpose of demonetisation was to move India from a tax non-compliant society to a compliant society.
In a Facebook post, Jaitley questioned widely stated comment that demonetisation has not succeeded, "A widely stated comment has been that just because most of the currency came back into the Banks, the object of Demonetisation has not succeeded. Was the invalidation of the Non-deposited currency the only object of demonetisation? Certainly Not."
Jaitley said the demonetisation led to the formalisation of the Indian economy and a blow to the black money after Reserve Bank of India released its report yesterday, saying that 99.3 percent of demonetised currency has returned.
Outlining the positive impact of demonetisation, Jaitley said, “WHEN cash is deposited in the Banks, the anonymity about the owner of the cash disappears. The deposited cash is now identified with its owner giving rise to an inquiry, whether the amount deposited is in consonance with the depositor’s income. Accordingly, post demonetisation about 1.8 million depositors have been identified for this enquiry. Many of them are being fastened with Tax and Penalties. Mere deposit of cash in a bank does not lead to a presumption that it is Tax paid Money.”
“In March 2014, the number of Income Tax returns filed was 3.8 crores. In 2017-18, this figure has grown to 6.86 crores. In the last two years, when the impact of demonetisation and other steps is analysed, the Income Tax returns have increased by 19% and 25%. This is a phenomenal increase,” he added.
The finance minister said the number of new returns filed post demonetisation increased in the past two years by 85.51 lakhs and 1.07 crore and for 2018-19, advance tax in the first quarter has increased for personal income tax assesses by 44.1 percent and in the corporate tax category by 17.4 percent.
“The Income Tax collections have increased from the 2013-14 figure of Rs 6.38 lakh crore to the 2017-18 figure of Rs 10.02 lakh crore. The growth of income tax collections in the pre-demonetisation two years was 6.6 percent and 9 percent. Post-demonetisation, the collections increased by 15 percent and 18 percent in the next two years. The same trend is visible in the third year,” he added.Talking on one nation, one tax, Jaitley said, "The GST was implemented from 1st July, 2017 i.e. Post demonetisation. In the very first year, the number of registered assesses has increased by 72.5 percent. The original 66.17 lakh assesses has increased to 114.17 lakh."