Demonetisation and its impact on Tax collection and Formalisation of the Economy - Arun Jaitley | GK-News24

The Reserve Bank has twice discharged its reports expressing that the demonetised Notes of Rupees 500 and 1000 have been significantly stored in the Banks. A generally expressed remark has been that in light of the fact that the greater part of the cash returned into the Banks, the question of Demonetisation has not succeeded. Was the nullification of the Non-saved cash the main protest of demonetisation? Unquestionably Not. The bigger reason for demonetisation was to move INDIA from a Tax Non-consistent society to an agreeable society. This essentially included the formalization of the Economy and a hit to the dark cash. How has this been accomplished? 

• At the point when trade is saved out the Banks, the namelessness about the proprietor of the money vanishes. The saved money is currently related to its proprietor offering ascend to a request, regardless of whether the sum saved is in consonance with the investor's wage. In like manner, post demonetisation around 1.8 million investors have been distinguished for this enquiry. A large number of them are being attached with Tax and Penalties. Insignificant store of trade out a bank does not prompt an assumption that it is Tax paid Money. 

• In March 2014, the quantity of Income Tax returns recorded was 3.8 crores. In 2017-18, this figure has developed to 6.86 crores. Over the most recent two years, when the effect of demonetisation and different advances is broke down, the Income Tax returns have expanded by 19% and 25%. This is an amazing increment. 

• The quantity of New Returns documented post demonetisation expanded in the previous two years by 85.51 Lakhs and 1.07 crores. 

• For 2018-19, propel Tax in the principal quarter has expanded for individual Income Tax Assesses by 44.1% and in the Corporate Tax class by 17.4%. 

• The Income Tax accumulations have expanded from the 2013-14 figure of `6.38 Lakh crores to the 2017-18 figure of `10.02 Lakh crores. 

• The development of Income Tax accumulations in the Pre-demonetisation two years was 6.6% and 9%. Post-demonetisation, the accumulations expanded by 15% and 18% in the following two years. A similar pattern is obvious in the third year. 

• The GST was actualized from first July, 2017 i.e. Post demonetisation. In the simple first year, the quantity of enlisted surveys has expanded by 72.5%. The first 66.17 Lakh evaluates has expanded to 114.17 Lakhs. 

This is the positive effect of the Demonetisation. More formalization of the Economy, More Money in the System, Higher Tax Revenue, Higher Expenditure, Higher Growth after the initial two quarters.