Modi Government's 'Clarification' on Tax Data Further Muddies the Demonetisation Waters -James Wilson

-TheWire.in

Instead of waiting for all the data to come in and making an apples-with-apples comparison, are different numbers being thrown at the public in order to make a political point about the ‘success’ of demonetisation?

On August 18, the Ministry of Finance issued a clarification about the number of tax payers that had been added post-demonetisation, hoping to set at rest the confusion – and skepticism – that had resulted from four different numbers being quoted by the prime minister, the finance minister, the Economic Survey and the Central Board of Direct Taxes.

Of course, the number of new tax payers claimed – of 56 lakhs, 5.4 lakhs, 91 lakhs and 33 lakhs – were quite confusing and perplexing. Friday’s press release said that these numbers denote nothing but “different period and different type of taxpayers”. The maze that the government has laid out is literally difficult for any fact-checker to navigate. Even then, let me try to decode this puzzle.

56 lakhs: The number quoted in Prime Minister Modi’s speech

First, let me first dissect the clarification given to the statement made by the prime minister. The clarification is as follows:

“The Prime Minister’s speech referred to the increase in number of e-filed Personal Income Tax Returns (ITRs) filed from 1st April, 2017 to 5th August, 2017 over the ITRs filed in corresponding period of earlier years. The data maintained by the IT Department shows that during 1st April, 2017 to 5th August, 2017, 2.79 crore e-returns of Individual taxpayers were received as against 2.23 crore e-returns received during 1st April, 2016 to 5th August, 2016. Thus, the additional ITRs received in 2017 works out to be 56 lakh. During the same period of 2015, 2.00 crore e-returns were received, meaning thereby, that in 2016, only 22 lakh (rounded off)) additional e-returns were received by the due date of filing. This data has already been put in public domain by CBDT’s Press Release dated 7th August, 2017.” (Emphasis added)

 

Now let us examine the prime minister’s speech to see that exactly what he has said:

“The number of new taxpayers filing income tax returns from April 01 to August 05 is 56 lakhs while in the same period last year only 22 lakh filed the returns. In a way it has more than doubled. This is the result of our fight against black money.”

 

Nowhere in the above statement is the prime minister specifically comparing e-returns – as clarified by the Ministry of Finance. Instead, he is speaking about new tax payers without qualifying whether they are filing e-returns. Also the CBDT press release of August 7 mentioned in the August 18 press release also does not mention e-returns.

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