Tax filings and advance tax payments goes up on demonetisation impact

Trends on tax filings indicate they have gone up significantly during the post-demonetisation. While the tax filings increased by nearly 25%, advance tax payments increased by a whopping 42%.

According to the Ministry Finance estimate, the number of income tax returns filing increased by nearly 25 % this fiscal. The ITR filing increased by 24.7% pushing the total return filings to 2.82 crores from 2.26 crores during the corresponding period in 2016-17. The number of filings by individuals reached 2.79 crores, registering an increase of 2.22 crores.

“As a result of demonetisation and ‘Operation Clean Money,’ there is a substantial increase in the number of Income Tax Returns (ITRs) filed,” the Ministry of Finance note stated.  

A remarkable trend is the rise in advance personal income tax payment of 34.25% during the initial months of 2017-18 that indicate a sizable growth when the financial year closes.

Demonetizations’ early success in raising tax compliance is keenly observed. The ‘harvesting’ programme of Operation Clean Money has entered into the second phase. Tax department has identified nearly 22 lakh accounts for verification under the two phases. The process is continuing and it is expected that sizable number of new additions will be made to the existing income tax payers. According to the Tax Department data, only 3.5% of Indian people pays personal income tax. 

Tags : demonetization and tax revenue