Demonetisation led to the detection of black money, an increase in tax collection and the widening of tax base, Union minister of state for finance Pankaj Chaudhary told the Rajya Sabha in a written reply on March 21, 2023. Certain studies on related matter have been published by the RBI, the minister added. According to the statement, the income-tax department conducted search-and-seizure actions in 900 groups, leading to seizure of Rs 900 crore, including Rs 636 crore in cash and an admission of undisclosed income of about Rs 7,961 crore. There was transfer of funds into formal channels due to significant improvement in tax compliance, it added.
According to the official data, due to demonetization, net direct tax collections showed 18% growth in FY2018 over FY2017, the highest in the preceding 7 financial years.
In FY18, personal income tax advance tax collections increased by 23.4% and personal income tax self-assessment tax by 29.2% over those for FY17. The move also resulted in 25% growth in the number of income tax returns (ITRs) filed with the I-T department during FY18, the highest rate achieved in the preceding 5 years.
“The new ITR filers was about 1 crore 7 lakh as compared to 85.51 lakh during FY17. In earlier years, the number of new filers was between 50 lakh and 66 lakh,” the minister told the Upper House. Also, 17.2% increase was seen in the number of returns filed by corporate taxpayers during FY18; this was more than 5 times the growth rate of 3% in FY17 and 3.5% in FY16, he added.
SC refuses to intervene in individual demonetisation grievances
The Supreme Court refused to grant relief to petitioners with grievances about demonetisation. While giving its order on March 21, 2023, the apex court, however said, “If the petitioners so desired, they would be at liberty to make a representation to the Union of India to consider their individual grievances.”
“The Constitution Bench has upheld the law. Genuine hardships may be caused, but merely that cannot be a ground for this court to interfere. These requests are for the government to examine,” it added.
“If the central government finds that there exists any such class of persons and there are any reasons for extending the benefit under Section 4 of the 2017 Act, it is within its discretion to do so. In our view, it cannot be done by a judicial mandate,” it further said.
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