Union Finance Minister Arun Jaitley has reiterated that demonetisation has helped achieve formalisation of the economy and ensured financial inclusion of the weaker sections. He added that it helped bring back black money stashed abroad, and saw technology facilitating the filing of returns and expanding the tax base.
In a Facebook post on the second anniversary of demonetisation, he made it clear that confiscation of currency was not an objective of demonetisation. Getting it into the formal economy and asking the holders pay tax was the broader objective. It was “ill-informed criticism” that almost all the demonetised currency was returned, he added.
Jaitley said India was a cash-dominated economy, but it is now becoming increasingly difficult to evade the tax system. He pointed out that demonetisation compelled holders of cash to deposit the same in the banks. The enormity of cash deposited and identified with the owner resulted in suspected 17.42 lakh account holders from whom the response has been received online through non-invasive method. The violators faced punitive actions, he added.
In 2017-18, he said that the tax returns filed increased by 25% from the previous year to 6.86 crore. Further, he said, as on October 31, 2018, 5.99 crore returns have already been filed—an increase of 54.33% compared to the same date in 2017.