More Formalisation, Less Black Money: Income Tax E-Returns See 48 Per Cent Increase In 6 Months

Electronic filing of income taxes in India has witnessed a growth rate of 48 per cent over the last six months (April - November FY19) when compared to the corresponding period last financial year (FY19), as reported by Financial Express (FE).

Also, states of Uttar Pradesh and Bihar, which are generally considered to be less industrialised, have registered over 70 per cent increase in e-returns filings. However, it should be noted that the impressive growth in these states can be attributed to the low base effect. This effect is the tendency of a small absolute change from a low initial amount to be translated into a large percentage change.

“With the help of GST, demonetisation and digitalisation, the government has created an environment where people working outside the parameters of the formal economy don’t feel completely secure. This new culture of compliance has carved out a growth trajectory of return filing which has not been achieved,” said Rajat Mohan, a partner at AMRG & Associates.

CBDT (Central Board of Direct Taxes) collected a record Rs 10.03 lakh crores as income taxes during 2017-18. Also from nearly four crore entities, the income taxpayer base has moved up to 6.26 crores in the past few years.

Also Read: Why Substantially Cutting Income Tax Is Crucial For The Success Of GST