Only 6.68% of India’s Population Filed Income Tax Returns in FY 2023-24
Date: December 18, 2024
Category: Tax News
Read Time: 4 Minutes
Despite an increase in income tax returns (ITRs) filed, only 6.68% of India’s population submitted their ITRs in the fiscal year 2023-24. Minister of State for Finance Pankaj Chaudhary shared these insights with Parliament on December 17, 2024.
Key Statistics
1. ITR Filing Trends Over the Years
Over the last five fiscal years, the number of ITRs filed has shown consistent growth:
- FY 2023-24: 8.09 crore
- FY 2022-23: 7.40 crore
- FY 2021-22: 6.96 crore
- FY 2020-21: 6.72 crore
- FY 2019-20: 6.48 crore
This steady rise highlights the growing awareness and compliance among taxpayers.
2. Percentage of Population Filing ITRs
Although filings have increased, only 6.68% of India’s population submitted ITRs in FY 2023-24. This figure underscores the narrow tax base in the country, even with improved filing numbers.
Zero-Taxable Income Reports
Out of the 8.09 crore returns filed in FY 2023-24, 4.90 crore individuals reported zero taxable income. This marks an increase compared to 4.64 crore in FY 2022-23, raising questions about income thresholds and deductions benefiting a large segment of taxpayers.
Implications
1. Narrow Tax Base
With only a small fraction of the population filing returns, there’s a clear need for policy interventions to broaden the tax net. Encouraging voluntary compliance and simplifying the tax process could play a pivotal role in achieving this.
2. Economic Indicators
The increase in zero-taxable income filings suggests that a significant portion of the population either earns below the taxable income threshold or benefits from various deductions and exemptions. This trend reflects economic disparities that require attention.
3. Digital and Administrative Reforms
On the positive side, the consistent growth in ITR filings reflects improved awareness, efficient e-filing systems, and better tax administration. Continued reforms in these areas could further enhance compliance rates.
Key Takeaways
The government’s sustained efforts to improve tax compliance are yielding results, as evidenced by the steady rise in ITR filings. However, the challenge of expanding the tax base persists, particularly given that over 50% of filers report zero taxable income.
To address this, the government may need to focus on reforms that drive economic growth, formalize income, and simplify tax structures. These changes could encourage broader participation in the tax system and reduce reliance on exemptions and deduction
