Income Tax compliance in India is on the upswing across slabs, says data

Number of returns filed have shot up across various tax slabs reflecting more robust revenue base

October 27, 2023

ITR filings by taxpayers rise 90% in the last nine years

Data released by the Income Tax Department shows that a healthy trend of increased compliance by taxpayers is continuing to grow which augurs well for the country going ahead.

The data shows that the number of returns filed have shot up across various tax slabs reflecting a more robust revenue base.

The number of ITR filings has shown a consistent upswing over the last few years. The returns filed by individual taxpayers have shot up from 3.36 crore in Assessment Year (AY) 2013-14 to 6.37 crore in AY 2021-22 registering an overall increase of 90 percent.

During the current financial year, the number of ITRs filed has surged further to 7.41 crore for AY 2023-24 till date, including 53 lakh new first-time filers. “This is an indication of the widening of tax base subsequent to various reform measures put in place,” the Income Tax Department said in a statement.

In fact, while the overall number of returns of individual taxpayers has shown an increase over the years, there is also an increase in the number of returns filed by individual taxpayers across various ranges of gross total income, the statement said.

In the range of gross total income of Rs.5 lakh to Rs.10 lakh, and Rs.10 lakh to Rs.25 lakh, the number of returns filed by individual taxpayers from AY 2013-14 to AY 2021-22 has registered an increase of 295 percent and 291 percent. respectively.

This indicates that individual taxpayers are showing a positive trend of migration to the higher range of gross total income.

Further analysis of the gross total income of taxpayers for AY 2013-14 and AY 2021-22 also shows that the proportionate contribution of the gross total income of the top 1 percent of individual taxpayers vis-a-vis all individual taxpayers has decreased from 15.9 percent in AY 2013-14 to 14.6 percent in AY 2021-22, the proportionate contribution of the gross total income of the bottom 25 percent individual taxpayers vis-a-vis all individual taxpayers has increased from 8.3 percent in AY 2013-14 to 8.4 percent in AY 2021-22, and the proportion of the gross total income of middle 74 percent group of individual taxpayers increased from 75.8 percent to 77 percent in the above period.

The average gross total income for individual taxpayers increased from about Rs.4.5 lakh in AY 2013-14 to about Rs.7 lakh in AY 2021-22 representing an increase of 56 percent. The increase in average gross total income for the top 1 percent of individual taxpayers is 42 percent while that for the bottom 25 percent of individual taxpayers is 58 percent.

The above data is clearly indicative of a robust growth in the gross total income of individuals across different income groups subsequent to AY 2013-14. The overall impact has been reflected in an increase in net direct tax collections from Rs.6.38 lakh crore in FY 2013-14 to Rs. 16.61 lakh crore in FY 2022-23.

In the range of gross total income up to Rs.5 lakh, the number of returns filed by individual taxpayers has increased from 2.62 crore in AY 2013-14 to 3.47 crore in AY 2021-22 registering an increase of 32 percent. This range of income includes individuals having income below the taxable limit who may not be filing returns.

[With Inputs from IANS]

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