TFIPOST हिन्दी
TFIPOST Global
Tfipost.com
Tfipost.com
No Result
View All Result
  • Premium
  • Politics
    • All
    • Analysis
    • Opinions
    • Trending
    Delhi High Court Issues Notice to Ajeet Bharti in ₹2.1 Crore Defamation Suit Filed by TFI Media

    Delhi High Court Issues Notice to Ajeet Bharti in ₹2.1 Crore Defamation Suit Filed by TFI Media

    PM Modi

    PM Modi Launches ₹48,520-Crore Development Projects in Bihar’s Karakat, Lays Foundation for Major Infrastructure Works

    Delhi Chief Minister Rekha Gupta

    100 Days of Rekha Gupta’s Leadership: A New Direction for Delhi

    UN

    UN Recognizes India’s Strong Stand on Peacekeeper Protection and Accountability

    • Analysis
    • Opinions
    • Trending
  • Economy
    • All
    • Business
    • Economy1
    • Finance
    Global economic outlook worsens but India seen as growth driver: WEF report

    Global economic outlook worsens but India seen as growth driver: WEF report

    Benefits of Using a Bajaj Finserv Insta EMI Card for Shopping

    Benefits of Using a Bajaj Finserv Insta EMI Card for Shopping

    Understanding the differences between BTC season and altcoin season

    Understanding the differences between BTC season and altcoin season

    Best ₹1 Crore Term Plans with Return of Premium: Benefits vs Cost

    Best ₹1 Crore Term Plans with Return of Premium: Benefits vs Cost

    • Business
    • Finance
  • Defense
    • All
    • Defence
    • Strategy
    • Weaponry
    New Delhi: Indian Army Brahmos Missile System during a rehearsal for Republic Day Parade, in New Delhi on Friday, January 20, 2023. (Photo: Anupam Gautam/IANS)

    India’s Defence Manufacturing Set to Reach ₹8.8 Lakh Crore by 2047: CII-KPMG Report

    Top Naxal Leader Hidma Nabbed in Odisha in Coordinated Security Sweep

    Top Naxal Leader Hidma Nabbed in Odisha in Coordinated Security Sweep

    Mock Drills to Be Held Tomorrow in States Bordering Pakistan

    India’s Major Preparations After ‘Operation Sindoor’! Mock Drills to Be Held Tomorrow in States Bordering Pakistan

    What’s the Kaveri Engine and Why Is Everyone Talking About It?

    What’s the Kaveri Engine and Why Is Everyone Talking About It?

    • Defence
    • Strategy
    • Weaponry
  • Geopolitics
    • All
    • Africa
    • Americas
    • Asia Pacific
    • Europe
    • South Asia
    • West Asia
    Elon Musk

    Elon Musk Steps Down from DOGE Role, Criticizes Trump’s ‘Big Beautiful Bill’

    Bangladesh Supreme Court Frees Jamaat Leader Azharul Islam Behind 1971 Bangladeshi Hindu Genocide

    Bangladesh Supreme Court Frees Jamaat Leader Azharul Islam Behind 1971 Bangladeshi Hindu Genocide

    Pakistan’s Nuclear Ambition: A Costly Shield Fueling Economic Woes

    Pakistan’s Nuclear Ambition: A Costly Shield Fueling Economic Woes

    UK

    UK: 50 Injured After Car Ploughs Into Crowd Celebrating Liverpool’s Premier League Victory

    • Africa
    • Americas
    • Asia Pacific
    • Europe
    • South Asia
    • West Asia
  • Knowledge
    • All
    • Culture
    • Education
    • History
    • Indology
    How to Decide Between Amity and Manipal for Your Online MBA Journey

    How to Decide Between Amity and Manipal for Your Online MBA Journey

    Mughals, Delhi Sultans Out, Fresh Chapters on Indian Rulers, Mahakumbh Introduced: NCERT revises Class 7 books

    Mughals, Delhi Sultans Out, Fresh Chapters on Indian Rulers, Mahakumbh Introduced: NCERT revises Class 7 books

    Role of Consultants to Study in Ireland: How to Choose the Right One?

    Role of Consultants to Study in Ireland: How to Choose the Right One?

    The Complete Guide to Education Loan Interest Rates in 2025

    The Complete Guide to Education Loan Interest Rates in 2025

    • Culture
    • History
    • Indology
  • Law
  • Lounge
    • All
    • Books
    • Cinema
    • Entertainment
    • Food
    • Games
    • Health
    • Lifestyle
    • Satire
    • Sports
    • technology
    • Travel
    Cricket – More Than Just a Bat and Ball

    Cricket – More Than Just a Bat and Ball

    Lazer247 India – Best Online Sports Betting and Casino Platform

    Lazer247 India – Best Online Sports Betting and Casino Platform

    Adjustable Folding Adirondack Chair With Cup Holder – Customizable Support For Ultimate Relaxation

    Adjustable Folding Adirondack Chair With Cup Holder – Customizable Support For Ultimate Relaxation

    1win कैसीनो गेम्स: जब दांव से पहले रिवाज़ बन जाते हैं आदत और खेल का हिस्सा

    1win कैसीनो गेम्स: जब दांव से पहले रिवाज़ बन जाते हैं आदत और खेल का हिस्सा

    • Books
    • Cinema
    • Food
    • Health
    • Sports
    • technology
    • Travel
    • Satire
Tfipost.com
  • Premium
  • Politics
    • All
    • Analysis
    • Opinions
    • Trending
    Delhi High Court Issues Notice to Ajeet Bharti in ₹2.1 Crore Defamation Suit Filed by TFI Media

    Delhi High Court Issues Notice to Ajeet Bharti in ₹2.1 Crore Defamation Suit Filed by TFI Media

    PM Modi

    PM Modi Launches ₹48,520-Crore Development Projects in Bihar’s Karakat, Lays Foundation for Major Infrastructure Works

    Delhi Chief Minister Rekha Gupta

    100 Days of Rekha Gupta’s Leadership: A New Direction for Delhi

    UN

    UN Recognizes India’s Strong Stand on Peacekeeper Protection and Accountability

    • Analysis
    • Opinions
    • Trending
  • Economy
    • All
    • Business
    • Economy1
    • Finance
    Global economic outlook worsens but India seen as growth driver: WEF report

    Global economic outlook worsens but India seen as growth driver: WEF report

    Benefits of Using a Bajaj Finserv Insta EMI Card for Shopping

    Benefits of Using a Bajaj Finserv Insta EMI Card for Shopping

    Understanding the differences between BTC season and altcoin season

    Understanding the differences between BTC season and altcoin season

    Best ₹1 Crore Term Plans with Return of Premium: Benefits vs Cost

    Best ₹1 Crore Term Plans with Return of Premium: Benefits vs Cost

    • Business
    • Finance
  • Defense
    • All
    • Defence
    • Strategy
    • Weaponry
    New Delhi: Indian Army Brahmos Missile System during a rehearsal for Republic Day Parade, in New Delhi on Friday, January 20, 2023. (Photo: Anupam Gautam/IANS)

    India’s Defence Manufacturing Set to Reach ₹8.8 Lakh Crore by 2047: CII-KPMG Report

    Top Naxal Leader Hidma Nabbed in Odisha in Coordinated Security Sweep

    Top Naxal Leader Hidma Nabbed in Odisha in Coordinated Security Sweep

    Mock Drills to Be Held Tomorrow in States Bordering Pakistan

    India’s Major Preparations After ‘Operation Sindoor’! Mock Drills to Be Held Tomorrow in States Bordering Pakistan

    What’s the Kaveri Engine and Why Is Everyone Talking About It?

    What’s the Kaveri Engine and Why Is Everyone Talking About It?

    • Defence
    • Strategy
    • Weaponry
  • Geopolitics
    • All
    • Africa
    • Americas
    • Asia Pacific
    • Europe
    • South Asia
    • West Asia
    Elon Musk

    Elon Musk Steps Down from DOGE Role, Criticizes Trump’s ‘Big Beautiful Bill’

    Bangladesh Supreme Court Frees Jamaat Leader Azharul Islam Behind 1971 Bangladeshi Hindu Genocide

    Bangladesh Supreme Court Frees Jamaat Leader Azharul Islam Behind 1971 Bangladeshi Hindu Genocide

    Pakistan’s Nuclear Ambition: A Costly Shield Fueling Economic Woes

    Pakistan’s Nuclear Ambition: A Costly Shield Fueling Economic Woes

    UK

    UK: 50 Injured After Car Ploughs Into Crowd Celebrating Liverpool’s Premier League Victory

    • Africa
    • Americas
    • Asia Pacific
    • Europe
    • South Asia
    • West Asia
  • Knowledge
    • All
    • Culture
    • Education
    • History
    • Indology
    How to Decide Between Amity and Manipal for Your Online MBA Journey

    How to Decide Between Amity and Manipal for Your Online MBA Journey

    Mughals, Delhi Sultans Out, Fresh Chapters on Indian Rulers, Mahakumbh Introduced: NCERT revises Class 7 books

    Mughals, Delhi Sultans Out, Fresh Chapters on Indian Rulers, Mahakumbh Introduced: NCERT revises Class 7 books

    Role of Consultants to Study in Ireland: How to Choose the Right One?

    Role of Consultants to Study in Ireland: How to Choose the Right One?

    The Complete Guide to Education Loan Interest Rates in 2025

    The Complete Guide to Education Loan Interest Rates in 2025

    • Culture
    • History
    • Indology
  • Law
  • Lounge
    • All
    • Books
    • Cinema
    • Entertainment
    • Food
    • Games
    • Health
    • Lifestyle
    • Satire
    • Sports
    • technology
    • Travel
    Cricket – More Than Just a Bat and Ball

    Cricket – More Than Just a Bat and Ball

    Lazer247 India – Best Online Sports Betting and Casino Platform

    Lazer247 India – Best Online Sports Betting and Casino Platform

    Adjustable Folding Adirondack Chair With Cup Holder – Customizable Support For Ultimate Relaxation

    Adjustable Folding Adirondack Chair With Cup Holder – Customizable Support For Ultimate Relaxation

    1win कैसीनो गेम्स: जब दांव से पहले रिवाज़ बन जाते हैं आदत और खेल का हिस्सा

    1win कैसीनो गेम्स: जब दांव से पहले रिवाज़ बन जाते हैं आदत और खेल का हिस्सा

    • Books
    • Cinema
    • Food
    • Health
    • Sports
    • technology
    • Travel
    • Satire
No Result
View All Result
Tfipost.com
Tfipost.com
No Result
View All Result
  • Premium
  • Politics
  • Economy
  • Defense
  • Geopolitics
  • Knowledge
  • Law
  • Lounge

Demonetization impact: Phenomenal increase in tax base

Ashutosh Kulkarni by Ashutosh Kulkarni
6 November 2018
in Economy
Demonetization, direct tax

PC: cloudfront.net

Share on FacebookShare on X

In 1971, the Wanchoo Committee was set up to deal with the colossal amount of undisclosed income and the issue of increasing tax base in India. The committee was the first one to suggest Demonetization of high denomination notes. Although nothing much was done on that report in those days, Demonetization in 2016 did act as a trigger to increase the tax base in India. There has been substantial increase not only in tax returns but also number of people paying taxes. It is thus an established fact that increase in tax base has been one of the greatest successes of the current government.

The Central Board of Direct Taxes (CBDT) recently released data on direct collections in October 2018, highlighting how direct tax mop up has increased specifically in the last two-three years.

RelatedPosts

Growth story of PM Gati Shakti Scheme

The long term effect of demonetisation: India is saving 1200 crores annually

The year 2021, when India emerged as a global e-payments leader

Load More

Increase in Tax Returns and Tax Payers-

There has been a remarkable rise in various direct tax parameters seen as follows-

  • Number of Direct Tax Returns Filed– Increase of more than 80%.  3.79 crore in FY 2013-14 to 6.86 crore in FY 2017-18.
  • Number of Persons Filing Returns-Increased by about 65% during this period from 3.31 crore in FY 2013-14 to 5.44 crore in FY 2017-18.
  • Number of Tax Payers– Increased by 40% from 5.27 crores in FY 2013-14 to 7.41 crores in FY 2017-18

One of the reasons for this rise has been the trigger of demonetization that forced individuals to declare unaccounted income, as well as to enter into formal sector by registration of businesses and declaration of turnovers.

Total Direct Tax Collections-

There has been increase in the total direct tax collections. In FY16, the direct taxes collected were 7.4 lakh crores. This increased to 8.4 lakh crore in FY17, the year of Demonetization. The next year FY18 saw collections increase to around 10 lakh crores. Thus, a healthy growth of 14% and 18% was seen in FY17 and FY18 respectively. This type of growth in direct taxes has never been seen. However, the true picture is seen in the individual categories of direct taxes like income tax.

Income Tax and Other Direct tax Collections-

The largest amount of undisclosed income has come forward in the income tax category. The tax collections have increased from around 2.8 lakh crore in FY16 to 3.4 lakh crore in FY17, a jump of 21% in a single year. This is significant because in the preceding years, the growth used to be around 8% per year. This remarkable jump in income tax collections reflects positively on Demonetization.

Similarly, one more category under direct tax category is of Other Direct Tax which consists of reassessments, penalties, fines and tax on the income disclosed under Income Disclosure Schemes. We see that for two years preceding demonetization, the other direct taxes collected were around 2100 crores while two years after demonetization, the collections increased more than ten folds to around 27000 crores, showing the response to the income disclosure schemes.

We have compiled the tax numbers in a table shown below. For comparison, we have taken two years before Demonetization and two years after Demonetization. Notice the jump in the tax figures, especially in the Other Direct Taxes.

 

DIRECT TAXES
(All figures in Crore Rupees)

FINANCIAL YEAR

(i) Personal Income Tax

% Increase

(ii) Corporate Tax

% Increase

(iii) Other Direct Taxes

% Increase

Total Direct Taxes
(i+ ii+ iii)

% Increase

FY 14-15 & FY 15-16

553,409

39%

882,153

19.72%

2174

1133%

1,437,736

27.84%

FY 16-17 & FY 17-18

769,501

1,056,123

26827

1,852,451

Increase in Tax Buoyancy

Tax buoyancy is an indicator of how much are the tax revenues growing in comparison to the growth of GDP or National Income. Thus, when we say tax is buoyant, it means the tax revenues are increasing faster than GDP. The buoyancy factor indicates how well is the economy is placed in collecting taxes.

The direct tax buoyancy factor was barely 0.80 in FY16 but jumped up significantly to 1.81 in FY18 showing the relative growth of tax revenues to the growth of GDP. A bigger jump was seen in the buoyancy factor for personal income tax from 0.8 in FY16 to 2.20 in FY18.  Thus, a healthy picture is seen in the tax collections, a direct result of Demonetization.

There are two ways to change behaviours in an economy- persuasion and pressure. An economy sometimes requires a shock treatment to ensure a required behaviour from individuals. Demonetization served that very purpose which is reflecting in the tax compliance. Coupled with other measures like GST, tax reforms and use of technology, this move directly impacts the Ease of Doing Business. This increased tax mop-ups will ensure this money is spent in the useful sectors like roads, railways, ports, health, education and social security. An increase in tax base ensures the government receipts are more evenly spread on a larger population as opposed to the current tax base of barely 4%.

Justice Wanchoo may not have lived to see the implementation of his report. But the Modi government did ensure that his suggestions were implemented properly.

 

Tags: demonetizationModi Government Achievementstax basetax collection
Share1871TweetSend
Previous Post

UP to start construction of ‘Queen Huh Memorial Park’ in Ayodhya

Next Post

Corporate chooses not to support Congress

Related Posts

Global economic outlook worsens but India seen as growth driver: WEF report
Economy

Global economic outlook worsens but India seen as growth driver: WEF report

29 May 2025

The global economic outlook has worsened since the start of the year, as rising economic nationalism and tariff volatility...

Benefits of Using a Bajaj Finserv Insta EMI Card for Shopping
Finance

Benefits of Using a Bajaj Finserv Insta EMI Card for Shopping

28 May 2025

Flexible financing has changed the way people shop in India. From large electronics to everyday essentials, more consumers now...

Understanding the differences between BTC season and altcoin season
Finance

Understanding the differences between BTC season and altcoin season

28 May 2025

The power shift between Bitcoin and altcoins (any other coins other than Bitcoin) has deepened in the past years,...

Load More

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

I agree to the Terms of use and Privacy Policy.
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

Currently Playing

Pakistan needs money from IMF to feed their people

Pakistan needs money from IMF to feed their people

00:15:20

Vacate PoK and more: Steps Pakistan needs to take to avoid Indian military action

00:06:36

Taking The Wire’s Propaganda Piece on VP to the Cleaners – Feat. Prof. Kapil Kumar

00:09:19

Rahul Gandhi Undermines India’s Electoral Integrity as Trump Applauds It

00:07:09

Why Pakistan army chief reminds two nation theory| what is the plan| Waqf Bill |Asim Munir| Jinnah

00:13:02
Facebook Twitter Instagram Youtube
tfipostTfipost.com
Right Wing | News Analysis | Indian Opinion
  • About us
  • Careers
  • Brand Partnerships
  • Terms of use
  • Privacy Policy
  • Sitemap

©2025 TFI Media Private Limited

No Result
View All Result
  • Premium
  • Politics
    • Analysis
    • Opinions
    • Trending
  • Economy
    • Business
    • Finance
  • Defense
    • Defence
    • Strategy
    • Weaponry
  • Geopolitics
    • Africa
    • Americas
    • Asia Pacific
    • Europe
    • South Asia
    • West Asia
  • Knowledge
    • Culture
    • History
    • Indology
  • Law
  • Lounge
    • Books
    • Cinema
    • Food
    • Health
    • Sports
    • technology
    • Travel
    • Satire
TFIPOST हिन्दी
TFIPOST Global

©2025 TFI Media Private Limited