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LATEST NEWS UPDATES | Fact Check: Demonetisation's Effect on Increase in Direct Taxes and Income Tax Base -James Wilson

Fact Check: Demonetisation's Effect on Increase in Direct Taxes and Income Tax Base -James Wilson

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published Published on Aug 17, 2017   modified Modified on Aug 17, 2017
-TheWire.in

Despite government press releases, as of August 2017, there doesn’t appear to have been a substantial increase in the number of new tax payers or direct tax collection as a result of demonetisation.

On the morning of August 8, most of our newspapers – both national as well as regional ones – ran headlines about the giant leap in the income tax returns received as well as the increase in advance direct tax collections. The media has attributed this huge achievement to the demonetisation move executed by the government. Finally, it appears, the nation has started to reap the benefits of demonetisation.

However, the fact checker in me became curious with the claim of a 24% jump in the number of returns filed. Also the figure of  “2.82 crore returns filed in this assessment year” did not look so huge because I had delved into this data earlier for an article titled ‘Why Duplicate PAN Cards Are Not as Big an Issue as the Modi Government Claims‘.

New definitions of tax payers

What added to the confusion was that the ruling government recently redefined the terms “tax base”, “tax payers” and “new tax payer added” which adds  the “number of persons from whom the TDS/TCS deductions are made” to the “number of returns” received in a year. This change was effected by accepting the ‘Report of the Committee for recommending standard definitions of certain terms‘, chaired by Avadhesh Kumar Mishra.

So, it’s more than slightly confusing as to why the government is going back to the term “number of returns filed” rather than the “number of total tax payers”.

Please click here to read more.

TheWire.in, 16 August, 2017, https://thewire.in/168434/fact-check-claims-increase-income-tax-base-direct-taxes/


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