Question

Which of the following is NOT a feature of demonetisation?

Options

• It leads to creation of a less-cash or cash-less (free) economy i.e. channeling more savings through the formal financial system and improving tax compliance.

• It is interpreted as a shift on the part of the government indicating that tax evasion will no longer be tolerated or accepted.

• It is viewed as a tax administration measure.

• It led to tax administration channelising savings away from the formal financial system.

Answer 1

It led to tax administration channelising savings away from the formal financial system.

Explanation:

As a result of demonetization, savings are directed into the official system.