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Demonetization led to the detection of black cash, improvement in tax collection and widening of the tax base.

The Minister of State in the Ministry of Finance, Shri Pankaj Chaudhary in a written reply to a query raised in Lok Sabha Stated, “Demonetization, inter alia, led to the detection of black money, increase in tax collection and widening of the tax base.”

During the interval November 2016 to March 2017, the Income-tax Department performed search and seizure actions in 900 teams resulting in the seizure of Rs. 900 crorecroreether with money of Rs. 636 crores and admission of undisclosed income of about Rs. 7961 crores.

A growth charge of 18% for F.Y. 2017-18 in internet direct tax collections over F.Y. 2016-17, which was the highest within the previous seven monetary years, indicated the constructive impression of demonetization on the extent of tax compliance within the nation.

In F.Y. 2017-18, Personal Income-tax (PIT) Advance Tax collections elevated by 23.4% and PIT Self-Assessment Tax by 29.2% over these for F.Y. 2016-17, corroborating the premise that demonetization and the following use of bank deposit information by the Income-tax Department had a significant impression on voluntary tax funds by the non-corporate / individual taxpayers.

A development charge of 25% was achieved within the variety of Income Tax Returns (ITRs) filed with the Income-tax Department throughout F.Y. 2017-18. It was the very best charge achieved within the previous 5 years.

During F.Y. 2017-18, the variety of new ITR filers was about 1 crore 7 lakhs in comparison with 85.51 lakhs throughout F.Y. 2016-17. In earlier years, the variety of new filers was between 50 lakhs and 66 lakhs. There is, due to this fact, a transparent upswing within the new tax filers throughout the F.Y. 2016-17 and F.Y. 2017-18, which may be attributed to a greater stage of compliance resulting from the switch of money into the formal channels because of the demonetization.

A development charge of 17.2% was achieved within the variety of returns filed by company taxpayers throughout F.Y. 2017-18. It was greater than 5 occasions the expansion charge of three% in F.Y. 2016-17 and three.5% in F.Y. 2015-16.

Further, regarding investigations of the Prevention of Money Laundering Act, 2002 (PMLA) and Foreign Exchange Management Act, 1999 (FEMA) by the Directorate of Enforcement (ED), plenty of circumstances underneath PMLA have been recorded throughout demonetization and thereafter, associated with the acquisition of unaccounted demonetized currencies. Cases underneath FEMA have additionally been investigated whereby cross-border transaction/foreign exchange transactions have been seen.

Under PMLA, investigations have been taken up in 08 circumstances whereby 107 individuals have been found concerned in any means of the era, acquisition and/or projection of unaccounted cash. In these circumstances, proceeds of crime amounting to Rs. 191.68 crores have been connected/seized and 05 accused have been arrested. Further, 13 Prosecution Complaints (PCs) together with 07 Supplementary PCs have been filed in these circumstances.

Similarly, investigations in 10 circumstances in opposition to 19 individuals have been initiated underneath provisions of FEMA whereby foreign money amounting to Rs. 2.99 crores have been seized. Further, 08 Show Cause Notices have been issued, out of which 05 have been adjudicated. During adjudication, a penalty amounting to Rs. 1.61 crores has been imposed. Further, seized foreign money amounting to Rs. 77.81 lakhs has additionally been ordered to be confiscated throughout adjudication.

Whenever any occasion of tax evasion comes to note, the Income Tax Department takes applicable actions together with conducting search & seizure, surveys, evaluation of income, levy & restoration of tax, imposition of penalty and launching of prosecution as per the provisions of the Income Tax Act, 1961. Such info could also be acquired from varied sources like informants, tax evasion petitions, different Law Enforcement/Government Agencies, media, overseas jurisdictions underneath spontaneous/automated change of data, and so on. Further, because the variety of people with unaccounted income shouldn’t be static but is very variable and dynamic, it’s not possible to offer such particulars.