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How does demonetization helped govt. to increase their receipt from indirect tax

Dear Student, Demonetization is the act of stripping a currency unit of its status as legal tender. It occurs whenever there is a change of national currency: The current form or forms of money is pulled from circulation and retired, often to be replaced with new notes or coins. Demonetisation will help government to fight corruption, black money, etc. Smuggling and illegal activities will reduce. As a result of this, people have started bringing out their black money. This will directly help us in the development of the country. Demonetization helped government to increase their receipt from indirect tax as it will lead to increase in income tax collections both from the Individuals and the firms. Significant increase in direct net tax collections in the year of demonetisation and after, growth in revenue from advance and self-assessment tax. Positively increase in new income tax filers. Regards!

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It has sharply lifted tax buoyancy and ushered many new return filers into the income tax net
The argument about whether demonetisation was good or bad for the economy refuses to die down even a year after the event. Former RBI Governor Raghuram Rajan took potshots at it in a recent speech.While one can endlessly debate, with very little data, on whether the ban on high-value currency notes dealt a body blow to terrorism, corruption and counterfeiting, one area in which its impact can be quantified with data is tax compliance.
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