• Notification Date: 15-02-2023
• Notification No: N/A

Number of Income Taxpayers increased by 1 crore after Demonetisation

India added 1 crore personal Income-tax payers in Fiscal Year 2016-17 (FY17)—a period after demonetisation, said a newspaper report citing data tabled in the Lok Sabha on Monday. 

On November 8, 2016, Prime Minister Narendra Modi outlawed 86 per cent of the cash in circulation to target undeclared "black money" and fight corruption. The Supreme Court this January upheld the legality of the decision, saying it was taken in consultation with the central bank and followed due process. 

The number of corporate taxpayers increased by 32.5 per cent in FY17, according to a report published in 'Hindu Business Line'. Since the Modi government took office in the year 2014, the number of personal income taxpayers has increased by 60 per cent, said the report. 

The government’s written response in the Lok Sabha did not mention any specific reason for the rise in the number of income taxpayers. Officials told the newspaper there were multiple factors, including formalisation of the economy, better use of technology, tracking high spenders, and deposit of demonetised notes in banks. 

Additionally, simplification introduced to the process of filing Income Tax returns and ease in compliance may also have helped increase the number of taxpayers, said the report. 

After demonetisation, new notes of Rs 500 and Rs 2,000 were issued by the Reserve Bank of India. People were given the option to exchange old notes with new ones on or before December 30, 2016. People who were outside India during November 9-December 30, 2016, were given the opportunity to deposit old notes by March 31, 2017, the report elaborated. 

The government faced flak after more than 99 per cent of the old notes were deposited in banks. However, tax officials said that the move helped track depositors, which further helped add more taxpayers, said the report. 

Notably, data provided by the Finance Ministry in the Lok Sabha on Monday showed that Income tax collection surged to over Rs 6.73 trillion in FY 22 from Rs 2.58 trillion, a growth of over 160 per cent. During this period, corporate tax rose to over Rs 7.12 trillion from over Rs 4.28 trillion, a growth of over 66 per cent, according to the report.