All deposited banned notes may not be legitimate: Jaitley

new delhi — In the backdrop of the RBI’s report stating that 99 per cent of the demonetised cash had come back into the banking system, Finance Minister Arun Jaitley on Thursday said “all of it may not be accounted money”.

“Demonetisation helped in bringing transparency in the system. Money getting back into banking system — not necessarily legitimate money,” Jaitley said here at the inaugural session of ‘India Summit 2017’ organised by The Economist magazine.

The Reserve Bank of India (RBI) on Wednesday revealed that of the 15.44 lakh crore rupees of notes taken out of circulation by the demonetisation of 500 rupees and 1,000 rupees’ notes in November 2016, 15.28 lakh crore rupees, or almost 99 per cent, had returned to the system by way of deposits by the public.

The Minister, however said that demonetisation achieved the overall objectives for which it was brought in.

“It helped in bringing informal economy into a formal one. Demonetisation helped in widening tax base which in turn led to increase in the direct and indirect tax collections.

“Note ban has ended anonymity surrounding money. Demonetisation shook the system,” he added.

“We benefited on direct taxes front on the back of note ban. Twenty five per cent more people have filed Income Tax returns. Significant additions to July Goods and Services Tax (GST) collections is seen.

“At two-thirds GST returns, we have surpassed the target. GST collections in first month of its implementation was more than the government’s expectations,” Jaitley noted.

He said that as a long-term note ban impact, spending would get a boost as revenues would go up.

Talking about GST, Jaitley said he expected convergence of tax rates in the coming days.

Demonetisation helped in bringing transparency in the system. Money getting back into banking system — not necessarily legitimate money Arun Jaitley, India’s Finance Minister