Arun Jaitley said demonization forced cash holders to deposit the same in banks
Finance minister Arun Jaitley said on Thursday that demonization resulted in formalizing the economy and increasing the tax base, prompting the government to allocate more funds to the poor and infrastructure development. In Facebook posts on the occasion of the second anniversary of demonization, Jaitley said in the first four years of the National Democratic Alliance (NDA) that the number of income tax returns rose to 6.86 crore from 3.8 crore in May 2014. " when the first five years of this government are over, we will be closer to doubling the assessee, "he said in a post entitled" The Effect of Demonization. "
Demonization of banknotes R 500 and R 1000 in November 2016. As the minister said, it caused "more formalization (economy), more income, more resources for the poor, better infrastructure and a better quality of life for our citizens."
He further said that when implementing the Value Added Tax (GST), it is increasingly difficult to circumvent the tax system, and the indirect tax on Gross Domestic Product (GDP) increased to 5.4 percent after GST, from 4.4 percent in the years 2014-15.
Recognizing the criticism that almost all of the cash money was deposited in banks after demonetization as "uninformed", Jaitley said that currency confiscation is not the goal of demonization.
"The wider goal is to introduce the formal economy and force owners to pay a tax that would require a shock to allow India to switch from cash to digital transactions, which would obviously have higher tax revenues and higher taxes," Jaitley said.
Government on November 8, 2016. He announced the ban on old 500 and 1000 rupees banknotes to limit black money in the system.
From R 15,14 lakh crore with the value of 500 Rs and 1000 Rs in circulation on November 8, 2016, 99.3 percent or notes with the value of R, 15 lakh crore returned to the banking system.
This means that just 10,720 crore of the scrapped currency did not return to the banking system. After introducing the ban on bank notes, old, scrapped banknotes, called certain banknotes (SBN), could have been deposited in banks with atypical deposits subject to income tax controls.
Jaitley said that demonization forced cash holders to deposit the same in banks.
"The magnitude of the cash deposited and identified by the owner has led to the suspicion of the account holders of 17. who have received an online response in a non-invasive manner," he said. Persons who violate the law faced repression. Larger deposits in banks increased the creditworthiness of banks. Many of this money was directed to investment funds for further investments. It has become part of the formal system, adds Jaitley.
He said that the share of the Unified Payments Interface (UPI) and RuPay payment system created locally reached 65 percent of payments made with debit and credit cards.
Jaitley said in 2017-18, tax returns reached 6.86 crore, an increase of 25 percent over the previous year.
This year, as of October 31, 2018, 5.99 returns from crore has already been made, an increase of 54.33% compared to the previous year by that date. This year, 86.35 lakh new filters were added.
Subhash Chandra Garg, Economic Affairs Secretary, said that demonization and GST reflect the long-term vision of the government and its ability to carry out massive structural reforms. "Taxes in the framework of direct and indirect taxes are almost doubled, digital payments have risen sharply and have become a common place." False notes are unavailable, Garg wrote.