Income Tax Return Filings in India: Trends and Government Measures

The number of income tax return (ITR) filings in India has increased over the past five years, with state-wise and year-wise data highlighting the trend. A significant portion of these filings result in zero tax liability. The government attributes the rise in filings to various initiatives aimed at simplifying compliance and expanding the tax base. Key measures include the introduction of the new Form 26AS, which provides a comprehensive view of tax deductions, financial transactions, and pending proceedings, encouraging taxpayers to disclose their income accurately. Pre-filled ITRs now include salary, interest, and dividend income, making filing more convenient. Additionally, the updated return provision under Section 139(8A) allows taxpayers to correct omissions within two years, fostering voluntary compliance. The government has also reduced corporate tax rates while phasing out exemptions and simplified personal income tax slabs to incentivize filing. Laws like the Black Money Act and amendments to the Benami Transactions Act have been enacted to curb tax evasion. The expanded scope of TDS/TCS has brought more taxpayers into the net by including transactions like high-value cash withdrawals, foreign remittances, luxury purchases, and e-commerce transactions. These efforts collectively aim to increase voluntary tax compliance and strengthen India’s taxation framework.

Government of India
Ministry of Finance
Department of Revenue

LOK SABHA

UNSTARRED QUESTION NO. 946

TO BE ANSWERED ON MONDAY, THE 10TH FEBRUARY, 2025/ MAGHA 21, 1946 (SAKA)

‘Income Tax Returns’

 946. Shri Janardan Singh Sigriwal:

Will the Minister of FINANCE be pleased to state:

(a) the number of persons who have filed Income Tax Returns during the last five years, State- wise and year-wise;

(b) the number of persons whose Income Tax Returns amount to zero tax liability during the last five years, State-wise and year-wise;

(c) whether there is an increase in the number of persons filing Income Tax Returns in the country; and

(d) if so, the details thereof along with the steps taken by the Government attributed to the said increase?

ANSWER
MINISTER OF STATE IN THE MINISTRY OF FINANCE
(SHRI PANKAJ CHAUDHARY)

(a) The details are attached as Annexure-

(b) The details are attached as Annexure-

(c) Yes, there is an increase in the number of persons filing Income Tax Returns in the

(d) Steps taken by the Government that can be attributed to the increase in the number of persons filing I-T returns are as follows:

• • 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, pending and completed proceedings. Further, details of SFT data in the Form 26AS makes taxpayer aware about their transactions beforehand and encourages them to disclose their true income.
  • Pre-filling of Income-tax Returns- In order to make tax compliance more convenient, pre-filled Income tax Returns (ITR) have been provided to individual taxpayers. The scope of information for pre-filing includes information such as salary income, bank interest, dividends, etc.
  •  Updated Return– Section 139(8A) of the Income Tax Act facilitates the taxpayer to update his return anytime within two years from the end of the relevant assessment 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 Income Tax Return.
  • 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 corporates so as to increase the tax base.
  • Simplification of the Personal Income Tax- Finance Act, 2020 simplified the filing of Income Tax Returns by providing an option to individual taxpayers for paying income-tax at lower slab rates if they do not avail specified exemption and incentive.
  • 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 Money Act) has been enacted, it increased the voluntary compliance in filing Income Tax Returns.
  • 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.
  • Expansion of scope of TDS/TCS – For bringing new tax-payers into the net of income tax department, scope of TDS/TCS was expanded by including huge cash withdrawal, foreign remittance, purchase of luxury car, e-commerce participants, sale of goods, acquisition of immovable property, remittance under LRS, purchase of overseas tour program package etc.

Annexure -A

 (a) The number of persons who have filed Income Tax Returns during the last five years, state-wise and year-wise is as follows: (Reference – part (a) of Question No. 946) 

 Note:-

1. Unique PAN (Permanent Account Number) count has been considered for specific FY from Income Tax Returns (ITRs).

2. E-filed ITRs have been considered for the above summary. In case multiple e-Returns were submitted by an assessee, the latest one in the corresponding FY has been taken into consideration.

3. State Description is taken from State Code in the communication address within Part A-General Information of ITR.

4. Outside India – ITR filers who have mentioned State Code as 99 (i.e. State outside India) in the communication address within Part A-General Information of ITR.

5. ITRs filed till 31st Dec’24 have been considered for FY 2024-

Annexure -B

 (b) The number of persons whose Income Tax Returns amount to zero tax liability during the last five years, state-wise and year-wise is as follows: (Reference – part (b) of Question No. 946) 

 Note:-

1. Unique PAN (Permanent Account Number) count has been considered for specific FY from Income Tax Returns (ITRs).

2. E-filed ITRs have been considered for the above summary. In case multiple e-Returns were submitted by an assessee, the latest one in the corresponding FY has been taken into consideration.

3. State Description is taken from State Code in the communication address within Part A-General Information of ITR.

4. Outside India – ITR filers who have mentioned the State Code as 99 (i.e. State outside India) in the communication address within Part A-General Information of ITR.

5. ITRs filed till  31st Dec’24  have been  considered for FY 2024-

6. Gross Tax payable column in the  ITR  has  been considered for determining tax