PM Narendra Modi's demonetisation move pays off as income tax net widens

Marco Green
August 8, 2017

"The increase in number of income tax returns reflects increased compliance level, addition of new taxpayers and result of inquiries made by the tax department after demonetisation".

The number of income-tax returns has registered an increase of 24.7 per cent for 2016-17 at 2.82 crore owing to demonetisation and operation clean money, the Finance Ministry said on Monday.

According to the Ministry of Finance data, the number of Income Tax returns filed till August 5 stood at 2,82,92,955 against 2,26,97,843 returns filed in the corresponding period previous year.

"This clearly shows that substantial number of new tax payers have been brought into the tax net subsequent to demonetisation", said the Finance Ministry.

In the case of individuals, the increase was to the tune of 25.1%, with the number of returns filed estimated at 2.79 crore.

Please Wait while comments are loading. As many as 2.83 crore income tax returns were filed till August 5 this year as compared to 2.27 crore returns filed in 2016-17 assessment year.

Referring to the surge in return filings as well as tax collection, the finance ministry said the "figures amply demonstrate the positive results of the government's commitment to fight the menace of black money".

Direct tax collection also showed a strong growth.

August 5 was the last day for filing income-tax returns after the deadline was extended from July 31. This growth is much higher than the 9.9 per cent recorded in the previous year, the government said.

The I-T department had then launched operation clean money to crack down on unaccounted money deposited in bank accounts post-demonetisation.

While the department has so far focused on large cash depositors who did not have the requisite income to back up their deposits, those who had deposited up to Rs 2.5 lakh in old Rs 500 and Rs 1,000 notes have not been asked any questions. The government aims to collect Rs 9.8 lakh crore through direct taxes in the current fiscal.

Other reports by Click Lancashire

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