Demonetisation: Nullifying non-deposited currency was not the only aim, says finance minister Arun Jaitley

New Delhi: A day after the RBI revealed that 99.3 percent of the demonetised currency was returned to the banks, Finance Minister Arun Jaitley on Thursday said the invalidation of the non-deposited currency was not the only objective of the noteban. Jaitley said the larger purpose of the demonetisation was to remove the anonymity of the owner of cash and to move India from a tax non-compliant society to a compliant society. “Was the invalidation of the non-deposited currency the only object of demonetisation? Certainly not. The larger purpose of demonetisation was to move India from a tax non-compliant society to a compliant society. This necessarily involved the formalisation of the economy and a blow to the black money,” he said in a Facebook post. The Minister said the objectives of demonetisation have been achieved and explained when cash is deposited in the banks, the anonymity about the owner of the cash disappears. “The deposited cash is now identified with its owner giving rise to an inquiry, whether the amount deposited is in consonance with the depositor’s income. Accordingly, post demonetisation about 1.8 million depositors have been identified for this enquiry. [caption id=“attachment_4346235” align=“alignleft” width=“380”] File image of union finance minister Arun Jaitley. PTI[/caption] Many of them are being fastened with tax and penalties. Mere deposit of cash in a bank does not lead to a presumption that it is tax paid money,” he said. In March 2014, the number of income tax returns filed was 3.8 crore. In 2017-18, this figure grew to 6.86 crore. In the last two years, when the impact of demonetisation and other steps is analysed, the income tax returns have increased by 19 percent and 25 percent. “This is a phenomenal increase,” he said, adding the number of new returns filed post demonetisation increased in the past two years by 85.51 lakhs and 1.07 crore, respectively. Jaitley also shared data related to jump in advance tax. For 2018-19, advance tax in the first quarter increased for personal income tax assesses by 44.1 percent and in the corporate tax category by 17.4 percent, he said. Further, he said the income tax collections increased from Rs 6.38 lakh crore in 2013-14 to Rs 10.02 lakh crore in 2017-18. “The growth of income tax collections in the pre-demonetisation two years was 6.6 percent and 9 percent. Post-demonetisation, the collections increased by 15 percent and 18 percent in the next two years. The same trend is visible in the third year,” he said. On Goods and Services Tax (GST), which was implemented post demonetisation on 1 July, 2017, the Minister said there has been a rise of 72.5 percent in the number of registered assesses from 66.17 lakh originally to 114.17 lakh today. “This is the positive impact of the demonetisation. More formalisation of the economy, More money in the system, higher tax revenue, higher expenditure, higher growth after the first two quarters,” he said.