What is the impact of demonetization in

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Target Exam

CUET

Subject

Business Studies

Chapter

Business Environment

Question:

What is the impact of demonetization in relation to tax collection?

Options:

Rise in income tax collection because of increased disclosure

Decrease in income tax collection because of increased disclosure

Rise in income tax collection because of decreased disclosure

Decrease in income tax collection because of decreased disclosure

Correct Answer:

Rise in income tax collection because of increased disclosure

Explanation:

The correct answer is option 1- Rise in income tax collection because of increased disclosure.

IMPACT OF DEMONETISATION

1.	Money/Interest rates	i. Decline in cash transactions ii. Bank deposits increased iii. Increase in financial savings
2.	Private wealth	Declined since some high demonetised notes were not returned and real estate prices fell
3.	Public sector wealth	No effect
4.	Digitisation	Digital transactions amongst new users (RuPay/AEPS) increased
5.	Real estate	Prices declined
6.	Tax collection	Rise in income tax collection because of increased disclosure