Practicing Success

Target Exam

CUET

Subject

Business Studies

Chapter

Business Environment

Question:

What is the positive outcome of demonetization in terms of tax administration?

Options:

Increased tax evasion

Channelizing savings into formal financial systems

Encouraging black money transactions

Declining tax compliance

Correct Answer:

Channelizing savings into formal financial systems

Explanation:

Demonetisation also led to tax administration channelizing savings into the formal financial system. Though, much of the cash that has been deposited in the banking system is bound to be withdrawn but some of the new deposits schemes offered by the banks will continue to provide a base loans, at lower interest rates.