Demonetisation – A Golden Opportunity for Widening the Taxpayer Base

Rajiva Ranjan Singh and Anandita Bagchi
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Rajiva Ranjan Singh: Indian Council for Research on International Economic Relations (ICRIER)

Indian Council for Research on International Economic Relations (ICRIER) Working Paper from Indian Council for Research on International Economic Relations (ICRIER), New Delhi, India

Abstract: The authors acknowledge the stress that this sudden move put on the common man. The RBI's Annual Report 2017, showed that 99 percent of the demonetised currency had found its way back to the banks suggesting first, that most black money in the Indian economy is not held as cash, and secondly, that the Income Tax department now has a large amount of financial database. The authors feel that the Department should use technology to compile 360-degree profiles of all citizens based on: (i) all transactional data received since November 2016, and (ii) the large amount of historical data and third-party information available. Action by the Government/Department should be based on proper data analysis since tax proceedings can be initiated till six years after March 2017. The paper also recommends that the Department act with a focus on the 'customer' and in a non-intrusive and taxpayer-friendly manner.

Keywords: demonetisation; black economy; digitisation; corruption; cash economy; formalisation (search for similar items in EconPapers)
Pages: https://icrier.org/pdf/Working_Paper_351.pdf
Date: 2018-01
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