Operation Clean Money initiated to nail down individuals and entities making repeated attempts at tax evasion and the earlier demonetization step brought as many as 91 lakh more individuals in the tax bracket in the FY 2016-17. With a stern step, scrapping of high-value bank notes proved to be an effective way and an undisclosed income to the tune of Rs. 23,144 crore was detected as a result of search and seizure operations as well as surge in income tax return filings.
The number of e-filing by taxpayers of the total tax returns filed increased at the rate of 97.6% in the year 2016-17 from 85% in the 2015-16 FY with their number standing at 5.28 crores (provisional) and 4.33 crores respectively in F.Y 2016-17 and 2015-16.
The details come on the sidelines of a launch of a new portal by Finance Minister Jaitley that will work towards identifying individuals and entities whose declared income is not in line with their huge deposits or expenses.
Finance Minister in a Press Release commented " It is time of reckoning for those who evade tax. We want to change habit from non-tax compliant to tax compliant". He also iterated that the demonetization step geared the economy to a digital platform and the number of tax assessees as well as tax revenue has increased many folds.
After the scrapping of high value notes a total of 17.92 lakh cases were determined for unaccounted for deposits and of these over one lakh are under suspicion due to tax evasion. CBDT Chairman said "We identified around 17.92 lakh persons in whose case the cash transactions did not appear in line with the taxpayers' profiles. And online verifications of these transactions are underway".
Taxmen via e-mail and sms intimated these 17.92 lakh individuals and of these 9.72 lakh individuals have responded with details of 13.33 lakh bank accounts and cash deposits totaling to Rs. 2.89 lakh crore.
Note ban as suggested by CBDT has led to an increase in gross tax revenues which grew at the rate of 16% in FY 2016-17 that is said to be highest growth in the last five years time. Net tax collection also increased by 14% with increase in income tax and regular assessment and self-assessment tax at 18%, 25% and 22% respectively.
The details of collection from Income Declaration Scheme II or Pradhan Mantri Garib Kalyan Yojana (the window opened for individuals to come clean by providing details of unaccounted cash with penalty payments) have not yet been notified by the government. But various sources suggest it to be in the range of Rs. 2000-3000 crore, making the earlier claims of a heavy mop up against the scheme false.