Income Tax Returns Filed by Individuals Increase 90% in 8 Years

The income tax department on Thursday said I-T returns filed by individual taxpayers have risen 90 per cent in 8 years to 6.37 crore in AY 2021-22, indicating a widening of the taxpayer base.

Increase in Tax Returns Filed

The returns filed by individual taxpayers have increased from 3.36 crore in Assessment Year AY 2013-14 to 6.37 crore in AY 2021-22, registering an overall increase of 90 per cent. During the current fiscal too, 7.41 crore returns have been filed for AY 2023-24 till date, including 53 lakh first-time filers, the Central Board of Direct Taxes CBDT said in a statement.

Growth in Different Income Groups

Giving a breakup of the returns filed by individual taxpayers across various ranges of gross total income, the CBDT said the ITRs filed by individual taxpayers earning between Rs 5 lakh and Rs 10 lakh have increased 295 per cent during the period from AY 2013-14 to AY 2021-22. There has been a 291 per cent increase in ITRs filed by individuals with gross total income between Rs 10 lakh and Rs 25 lakh. This indicates that individual taxpayers are showing a positive trend of migration to a higher range of gross total income, the CBDT said.

Increase in Average Gross Total Income

In the range of gross total income of 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 per cent. This range of income includes individuals having income below the taxable limit who may not be filing returns. A further analysis of the data of individual taxpayers for AY 2013-14 and AY 2021-22 showed that 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 per cent.

Impact on Direct Tax Collections

The increase in average gross total income for the top 1 per cent of individual taxpayers is 42 per cent, while that for the bottom 25 per cent of individual taxpayers is 58 per cent. The proportionate contribution of the gross total income of the top 1 per cent of individual taxpayers vis-à-vis all individual taxpayers has decreased from 15.9 per cent in AY 2013-14 to 14.6 per cent in AY 2021-22. The proportionate contribution of the gross total income of the bottom 25 per cent of individual taxpayers vis-à-vis all individual taxpayers has increased from 8.3 per cent in AY 2013-14 to 8.4 per cent in AY 2021-22. The proportion of gross total income of the middle 74 per cent group of individual taxpayers increased from 75.8 per cent to 77 per cent during the period. …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, the CBDT said.

The 2023-24 budget has pegged direct tax collection at a little over Rs 18.23 lakh crore, a 9.75 per cent higher than Rs 16.61 lakh crore mopped up in the last fiscal. Robust growth in income tax returns filed by individuals indicates a widening of the taxpayer base and increased compliance. The growth in different income groups and the rise in average gross total income reflect the positive trend of economic growth and formalization of the economy. The increase in net direct tax collections further strengthens the government's revenue position and supports its efforts in nation-building.