Income Tax Return Filers in India: Key Data & Trends

Government of India has provided detailed data on income tax filings in the country. In FY 2023-24, 6.68% of the population filed Income Tax Returns (ITR), with over 8 crore returns submitted. Over the past five years, the number of individuals declaring zero taxable income has varied, with 4.9 lakh filings in 2023-24. The Government has taken several steps to expand the tax base, including introducing Form 26AS for easier tracking of tax deductions, offering pre-filled returns, and enabling updates to previously filed returns. Other efforts include simplifying personal tax rates and broadening the scope of Tax Deducted at Source (TDS) for various transactions. Measures to curb tax evasion include the Black Money Act and amendments to the Benami Transactions Act. The Government aims to increase compliance and widen the taxpayer base through these initiatives. Data from the last few years reveals income distribution among taxpayers, with a notable increase in the number of individuals filing in higher income brackets.

GOVERNMENT OF INDIA
MINISTRY OF FINANCE
DEPARTMENT OF REVENUE

RAJYA SABHA

UNSTARRED QUESTION NO. 2478

ANSWERED ON- 17/12/2024

‘Income tax returns’

2478. Shri Raghav Chadha:

Will the Minister of FINANCE be pleased to state:

(a) whether Government has data on the percentage of the population that files income tax returns in the country;

(b) if so, the details of income tax filers categorized by income slabs over the last five years;

(c) the number of individuals filing income tax returns but declaring zero taxable income in the same period;

(d) the steps taken by Government to expand the tax base and bring more individuals under the income tax net; and

(e) the measures proposed to ensure accurate reporting of income and prevent tax evasion?

ANSWER

MINISTER OF STATE IN THE MINISTRY OF FINANCE

(SHRI PANKAJ CHAUDHARY)

(a) In F.Y. 2023-24, the percentage of population that files Income Tax Return is 6.68%. (In FY 2023­24 the total number of persons filling income tax return is 8,09,03,315).

(b) The slab wise details of income tax filers for AY 2019-20 to AY 2023-24 are attached as Annexure A.

(c) Total number of Individuals reporting zero return-income in their ITRs is as under:

(d) Steps taken by Government to expand the tax base and bring more individuals under the income tax net are as under:

(i) New Form 26AS– This new form contains all information of deduction or collection of tax at source, specified financial transaction (SFT), and payment of taxes, demand and refund etc. Further, details of SFT data in the Form 26AS makes taxpayer aware about their transactions beforehand and encourages them to disclose their true income.

(ii) Pre-filling of Income-tax Returns– In order to make tax compliance easier pre-filled Income tax Returns (ITR) have been provided to individual taxpayers. The scope of information for pre-filling includes information such as salary income, bank interest, dividends, etc.

(iii) Updated Return– Section 139(8A) of the Income-tax Act, 1961(the Act) facilitates the taxpayer to update his return anytime within two years from the end of the relevant assessment year so that he can file an updated return by voluntarily admitting omissions or mistakes and paying an additional tax as applicable. Further, e-verification scheme was launched to allow tax-payers to disclose their unreported or under-reported income in the updated ITR.

(iv) Reduction in the corporate tax rate- Starting from the Finance Act, 2016, the corporate tax rates have been gradually reduced while phasing out the exemptions and incentives available to the corporate so as to increase the tax base.

(v) Simplification of the Personal Income-tax– Finance Act, 2020 and Finance Act, 2024 have provided an option to individual tax payers for paying income-tax at lower slab rates if they do not avail specified exemptions and incentives.

(vi) Expansion of scope of TDS/TCS– For bringing new tax-payers into the income-tax net, scope of TDS/TCS was expanded by including huge cash withdrawal, foreign remittance, purchase of luxury car & other goods, e-commerce participants, sale of goods, acquisition of immovable property, purchase of overseas tour program package, payment on transfer of virtual digital assets, online gaming, payments to partners of a firm, etc.

(vii) Black Money Act– In order to curb the flow of black money stashed abroad, the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 (the Black Act) has been enacted, it increased the voluntary compliance in filing Income Tax Returns.

(viii) Benami Law– The Benami Transactions (Prohibition) Act, 1988 was comprehensively amended by the Benami Transactions (Prohibition) Amendment Act, 2016 to enable confiscation of Benami Property and prosecution of benamidar and the beneficial owner.

(e) Plugging of tax evasion is an ongoing process and any legislative measures taken in this regard are reflected in the Finance Bill.

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Annexure^–A

1.10 All Taxpayers – Range of Returned Income (AY 2019-20)

Notes

1. Returned Income is the total income after chapter VI-A deduction and deductions u(s 10A/10AA (wherever applicable) as computed in the ‘Computation of total income” schedule of return of

2. The “Sum of Returned Income” is the sum of Returned Income of all returns within the value range slab.

3. The “Average Returned Income” is the average Returned Income within the value range slab e., “Sum of Returned Income” divided by total number of returns within the value range slab.

1.10 All Taxpayers – Range of Returned Income (AY 2020-21)

Notes

1. Returned Income is the total income after chapter VI-A deduction and deductions u/s 10A/10AA (wherever applicable) as computed in the “Computation of total income” schedule of return of income.

2. The “Sum of Returned Income” is the sum of Returned Income of all returns within the value range slab.

3. The “Average Returned Income” is the average Returned Income within the value range slab i.e., “Sum ci Returned Income” divided by total number of returns within the value range slab.

1.10 All Taxpayers – Range of Returned Income (AY 2021-22)

Notes

1. Returned Income is the total income after chapter VI-A deduction and deductions u/s 10A/10AA (wherever applicable) as computed in the ‘Computation of total income” schedule of return of

2. The “Sum of Returned Income” is the sum of Returned Income of all returns within the value range

3. The ‘Average Returned Income° is the average Returned Income within the value range slab e., “Sum of Returned Income’ divided by total number of returns within the value range slab.

1.10 All Taxpayers – Range of Returned Income (AY 2022-23)

Notes

1. Returned Income is the total income after chapter VI-A deduction and deductions Ws 10A/10AA (wherever applicable) as computed in the ‘Computation of total income” schedule of return of income.

2. The “Sum of Returned Income” is the sum of Returned Income of all returns within the value range

3. The “Average Returned Income” is the average Returned Income within the value range slab i.e., “Sum of Returned Income” divided by total number of returns within the value range

1.10 All Taxpayers – Range of Returned Income (AY 2023-24)

Notes

1. Returned Income is the total income after chapter V1-A deduction and deductions u/s 10A/10AA (wherever applicable) as computed in the “Computation of total income’ schedule of return of income.

2. The “Sum of Returned Income” is the sum of Returned Income of all returns within the value range slab.

3. The “Average Returned Income” is the average Returned Income within the value range slab is., “Sum of Returned Income” divided by total number of returns within the value range slab.