India's tax department recorded a huge surge in the number of "stop filers" in the financial year in which Prime Minister Narendra Modi announced demonetisation, The Indian Express reported. Stop filers are those individuals who filed returns in the earlier years but did not do so in the current year.
According to the report, the number of stop filers spiked over 10-fold to 88.04 lakh from 8.56 lakh in 2015-16. The report mentioned that this number does not include taxpayers who have passed away or whose PAN cards have been cancelled or surrendered in that year.
"This is the highest increase in almost two decades since 2000-01," the report said, quoting unnamed tax officials. "The number of stop filers was consistently falling from 37.54 lakh in fiscal 2013 to 27.02 lakh in fiscal 2014, 16.32 lakh in fiscal 2015 and 8.56 lakh in fiscal 2016."
According to officials, the surge in the number of stop filers may be because of loss of jobs or drop in income due to fall in economic activity after unprecedented move to ban high-denomination currency notes of Rs 500 and Rs 1,000.
This was in sharp contrast with the government's estimates which claimed that it added 1.06 crore new taxpayers in the financial year 2016-17, almost 25 per cent more than the previous year. Finance Minister Arun Jately had described the note ban as a "key step in a chain of important decisions taken by the government to formalise the economy".
"Typically, the number of stop filers reflects a compliance and enforcement gap, which the tax administration fails to enforce. But this huge increase in stop filers for 2016-17 cannot be attributed to sudden changes in compliance behavior. The spike could be due to a fall in income or loss of jobs during the year," the tax official was quoted as saying this.
In 2016-17, tax data also shows a sharp decline of more than 33 lakh TDS (tax deducted at source) deductees, who did not file returns in the past, the Indian Express quotes another tax official as saying this. This indicates that persons who undertook some specified transactions in previous year, did not undertake it during the year in question, suggesting a fall in economic activity, tax official added.
Edited by Chitranjan Kumar
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