AY25 ITR Filing Set to Surge, Yet ITR-1 Growth Slows
With the AY25 Income Tax Return (ITR) filing deadline approaching, the number of returns filed is likely to surpass last year’s. However, ITR-1 filings—the most widely used form—show little to no growth annually, and even a slight decline fiscally.
The surge in overall filings results from the Income Tax Department’s digitalization and simplification measures, which have made the filing process smoother. From April 1 to October 31, taxpayers filed 8.11 crore returns for AY25, compared to 7.65 crore during the same period last year. As deadlines near for specific categories, these numbers are expected to increase.
Reasons for ITR-1 Decline
- Diversified Income Sources: Taxpayers with multiple income sources, like capital gains or foreign assets, need to switch to ITR-2 or ITR-3.
- Business Income Reporting: Those with business income must use ITR-3, as ITR-1 doesn’t cover this income type.
- Property Ownership: Taxpayers owning more than one property must file ITR-2, as ITR-1 supports only one property.
Experts note that digital payments and enhanced reporting have expanded the taxpayer base and simplified compliance.
Important Dates
File belated returns by December 31, 2024.
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