Rise in Income Tax Return Filings: Analysis: A Rajya Sabha question revealed a significant 25% increase in income tax returns filed from FY 2019-20 to FY 2023-24, with total filings rising from approximately 6.49 crore to 8.09 crore. This growth spans multiple taxpayer categories, including individuals, firms, and companies, with individual filings accounting for the majority of returns. However, the claim that the number of filers doubled in five years was refuted by the Ministry of Finance.
The government attributed this growth to several measures aimed at improving tax compliance. Key initiatives include the introduction of Form 26AS, which provides detailed transaction data to taxpayers, and pre-filled income tax returns to simplify the filing process. Additionally, the provision to update returns within two years of the assessment year under Section 139(8A) has encouraged voluntary compliance. Corporate tax rate reductions and the simplification of personal income tax slabs further contributed to broadening the taxpayer base. Other measures, such as expanding the scope of TDS/TCS, and enacting laws like the Black Money Act and the Benami Transactions (Prohibition) Act, have also played a pivotal role in enhancing compliance and increasing transparency.
These steps collectively highlight the government’s efforts to foster a robust tax filing system and encourage greater participation in the formal economy.
GOVERNMENT OF INDIA
MINISTRY OF FINANCE
DEPARTMENT OF REVENUE
RAJYSABHA UNSTARRED
QUESTION NO. 24
ANSWERED ON- 17/12/2024
‘Rise in tax returns file
- Shri Madan Rathore:
- Shri Narhari Amin:
Will the Minister of FINANCE be pleased to state:
(a) whether there has been an increase in the number of tax returns filed during the last five years, if so, the details thereof;
(b) whether the Income Tax return filers have doubled in the last five years, if so, the details thereof; and
(c) the steps taken by Government that can be attributed to the said increase?
ANSWER
MINISTER OF STATE IN THE MINISTRY OF FINANCE
(SHRI PANKAJ CHAUDHARY)
(a) Yes, there is an increase in filing ITR. The details are as under:
| SR | PAN Category | FY 2019-20 | FY 2020-21 | FY 2021-22 | FY 2022-23 | FY 2023-24 |
| 1 | Individual | 6,11,30,366 | 6,31,71,013 | 6,54,61,868 | 6,96,90,925 | 7,63,70,510 |
| 2 | H U F | 11,58,601 | 12,01,502 | 12,26,587 | 12,46,413 | 12,85,421 |
| 3 | Firm | 12,98,406 | 14,10,154 | 14,51,576 | 15,10,551 | 15,88,455 |
| 4 | Company | 8,40,511 | 9,24,296 | 9,71,319 | 10,27,200 | 10,80,882 |
| 5 | AOP(Trust) | 2,41,893 | 2,63,856 | 2,71,117 | 2,74,213 | 2,90,665 |
| 6 | Other AOP/BOI |
1,84,360 | 2,24,358 | 2,40,167 | 2,47,682 | 2,73,672 |
| 7 | Local authority |
2,861 | 3,534 | 3,594 | 3,529 | 3,760 |
| 8 | AJP | 8,583 | 9,505 | 8,800 | 9,321 | 9,394 |
| 9 | Others | 307 | 396 | 418 | 435 | 556 |
| Total | 6,48,65,888 | 6,72,08,614 | 6,96,35,446 | 7,40,10,269 | 8,09,03,315 |
(b) No sir. As compared to FY 2019-20, there has been around 25% increase in the number of ITRs filed in FY 2023-24.
(c) Steps taken by the Government that can be attributed to the increase in the number of income tax return filers 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.
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