Impact of Demonetisation on Black Money Widening of Tax Base and Direct Tax Collections. Govt. largely relying on income tax figures to justify demonetisation
Press Information Bureau
Government of India
Ministry of Finance
31-August-2017 16:52 IST
The Government of India launched a concerted drive against black money with Demonetisation being an important step in that direction. Among the main objectives of Demonetisation was the flushing out of black money and also conversion of the non-formal economy into a formal economy to expand the tax base. The impact of Demonetisation on black money, widening of tax base and Direct Tax Collections is summed up hereunder:
(A) Impact on black money:
Quantum jump in Enforcement actions based on Demonetisation data:
Searches
Surveys
Operation Clean Money:
The Income Tax Department launched ‘Operation Clean Money’(OCM) on 31st January, 2017 to analyse the data of the persons who deposited large sums of cash and whose returns of income were not in sync with such deposits.
Phase 1:
Phase 2:
(B) Impact on Widening of Tax-base:
(C) Impact on Direct Tax Collections:
The effect of Demonetization is also clearly visible in the growth in Direct Tax Collections. Collection of Advance Tax under Personal Income Tax (i.e. other than Corporate Tax) as on 05.08.2017 showed a growth of about 41.79% over the corresponding period in F.Y. 2016-2017. Collection of Self-Assessment Tax under Personal Income Tax showed a growth of 34.25% over the corresponding period in F.Y. 2016-2017.
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DSM/SBS
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