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Income Tax compliance in India is on the upswing across slabs

  •   Thu, Oct 26 2023 10:59:13 PM

New Delhi, Oct 26 (IANS): Data released by the Income Tax Department on Thursday shows that a healthy trend of increased compliance by taxpayers is continuing to grow which augurs well for the country going ahead.

The data shows that the number of returns filed have shot up across various tax slabs reflecting the a more robust revenue base.

The number of ITR filings has shown a consistent upswing over the last few years. The returns filed by individual taxpayers have shot up 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 financial year the number of ITRs filed have surged further to 7.41 crore for AY 2023-24 till date, including 53 lakh new first time filers. "This is an indication of the widening of tax base subsequent to various reform measures put in place," the Income Tax Department said in a statement.

In fact, while the overall number of returns of individual taxpayers has shown an increase over the years, there is also an increase in the number of returns filed by individual taxpayers across various ranges of gross total income, the statement said.

In the range of gross total income of Rs 5 lakh to Rs 10 lakh, and Rs 10 lakh to Rs 25 lakh, the number of returns filed by individual taxpayers from AY 2013-14 to AY 2021-22 has registered an increase of 295 per cent and 291 per cent. respectively.

This indicates that individual taxpayers are showing a positive trend of migration to the higher range of gross total income.

A further analysis of the gross total income of taxpayers for AY 2013-14 and AY 2021-22 also shows that the proportionate contribution of gross total income of top 1 per cent individual taxpayers vis-a-vis all individual taxpayers has decreased from 15.9 pe cent in AY 2013-14 to 14.6 per cent in AY 2021-22, the proportionate contribution of gross total income of bottom 25 per cent individual taxpayers vis-a-vis all individual taxpayers has increased from 8.3 per cent in AY 2013-14 to 8.4 per cent in AY 2021-22, and the the proportion of gross total income of middle 74 per cent group of individual taxpayers increased from 75.8 per cent to 77 per cent in the above period.

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. The increase in average gross total income for top 1 per cent individual taxpayers is 42 per cent while that for bottom 25 per cent individual taxpayers is 58 per cent.

The above 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 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.

In the range of gross total income 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 taxable limit who may not be filing returns.

 
  

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Comment on this article

  • sense_shetty, Kudla,Mangalore,KodialGuthu

    Fri, Oct 27 2023

    Small and medium enterprises are facing additional challenges due to the complexities of income tax compliance, diverting their focus away from income generation and, in some cases, leading to business closures. In contrast to other countries, such as in the Gulf, where businesses simply pay for their licenses and comply with VAT, India's system requires time-consuming ITR filing and other related tasks. It would be beneficial for the government to automate this process, leveraging the data it already collects through transactions, such as those in UPI and other payment modes. In India, virtually every buying and selling activity is taxed, resulting in a significant demand for the services of Chartered Accountants (CAs), who are often from the upper castes, particularly Brahmins. The government should also prioritize evaluating per capita growth across all segments of society to ensure equitable economic development and rising incomes, rather than solely focusing on income tax compliance as an achievement

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  • Monty Dotor, Mangalore

    Fri, Oct 27 2023

    Compared to last year, IT return filing was much easier. To make it still simple ,as you have suggested, the prefilled forms should be more comprehensive, form 16a should be abolished, dividend from equity shares should be taxed at company level, shares held for more than 3 years should be totally exempt from LTCG. Some CAs are highly corrupt-but not all, caste and religion do not matter-money makes the mare go.

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  • flavian, chik

    Fri, Oct 27 2023

    Excellent progress ...IT should be friendly and nice to tax payers and that's how country progresses and more and more will pay . Many are scared and worried so more and more education on taxes will help people pay taxes .Banks should give reduced interest rate for tax payers maybe .5 percent less or some good schemes on credit also ....

    DisAgree Agree [1] Reply Report Abuse


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