Direct taxes data shows improved taxpayer compliance
- October 27, 2023
- CA Chandan Agarwal's Office
The data reveals a consistent upward trend in the number of Income Tax Returns (ITRs) filed by individual taxpayers. Over the past decade, the number of ITR filings has increased significantly, reaching 6.37 crore in Assessment Year (AY) 2021-22, representing a substantial 90% increase from 3.36 crore in AY 2013-14.
The Income Tax Department of India on Thursday (October 26) released Time Series Data of Direct Taxes and Income Tax Return Statistics, showcasing a surge in taxpayer compliance and an impressive increase in direct tax collections over the past few years.
The data reveals a consistent upward trend in the number of Income Tax Returns (ITRs) filed by individual taxpayers. Over the past decade, the number of ITR filings has increased significantly, reaching 6.37 crore in Assessment Year (AY) 2021-22, representing a substantial 90% increase from 3.36 crore in AY 2013-14.
For AY 2023-24, the numbers continue to rise, with 7.41 crore ITRs filed, including an encouraging 53 lakh new first-time filers. This surge demonstrates a notable expansion of the taxpayer base, primarily driven by various reform measures introduced by the Department to simplify the tax process.
Notably, the increase in individual taxpayer compliance is not limited to one income range but extends across various brackets of gross total income. In the income range up to ₹5 lakh, the number of returns filed by individual taxpayers increased from 2.62 crore in AY 2013-14 to 3.47 crore in AY 2021-22, indicating a 32% growth. This range of income includes individuals having income below taxable limit who may not be filing returns.
Moreover, the data reveals substantial increases in ITRs filed by individual taxpayers with gross total income in the ranges of Rs. 5 lakh to ₹10 lakh and ₹10 lakh to ₹25 lakh, growing by 295% and 291%, respectively, from AY 2013-14 to AY 2021-22. This suggests a positive trend in individual taxpayers’ movement towards higher income brackets.
A deeper analysis of the gross total income for individual taxpayers in AY 2013-14 and AY 2021-22 reveals several important findings:
- The proportionate contribution of gross total income from the top 1% of individual taxpayers, compared to all individual taxpayers, decreased from 15.9% in AY 2013-14 to 14.6% in AY 2021-22.
- The proportionate contribution of gross total income from the bottom 25% of individual taxpayers increased from 8.3% in AY 2013-14 to 8.4% in AY 2021-22.
- The proportion of gross total income from the middle 74% group of individual taxpayers increased from 75.8% to 77% during the same period.
In addition to these encouraging trends, the average gross total income for individual taxpayers has witnessed an overall increase of 56%, rising from around ₹4.5 lakh in AY 2013-14 to approximately ₹7 lakh in AY 2021-22.
The increase in average gross total income for the top 1% of individual taxpayers is 42%, while for the bottom 25% of individual taxpayers, it is an impressive 58%.
These statistics underscore robust income growth among individuals across different income groups since AY 2013-14, culminating in a substantial rise in net direct tax collections.
Net direct tax collections have surged from ₹6.38 lakh crore in the financial year 2013-14 to an impressive ₹16.61 lakh crore in the financial year 2022-23.
This significant progress can be attributed to the government’s taxpayer-friendly and progressive policies, which aim to ensure transparency, efficiency, and trust-building efforts with taxpayers and stakeholders, Ministry of Finance said in a statement.
Source: https://www.cnbctv18.com/economy/direct-taxes-data-shows-improved-taxpayer-compliance-18163741.htm
