The number of individual income tax return filers, showing ₹1 crore plus income, has surged around 41 per cent to over 2.38 lakh during the first half (April-September) of the current fiscal year, latest data by e-filing portal (https://eportal.incometax.gov.in/) showed.
Experts feel the number is expected to go up further as due date for individuals having accounts to be audited is November 15.
The returns are related for Assessment Year 2024-25 (Fiscal Year 2023-24). While Tax officials said that formalisation of economy along with use of technology along with ease of compliance contributed in not just higher number of return filers.
Data showed that the number of crorepati filers was over 19000 during April-September period in 2020-21 which dropped a bit to over 16700 in the next fiscal (2021-22) mainly on account of the pandemic. However, in the next fiscal year (2022-23), it surged to over 1 lakh and since then, it has been on the rise.
- Also read: India’s business activity grows at faster clip in Oct, PMI shows
According to Amit Maheshwari, Tax Partner at AKM Global, the major reason is the strong economic growth which, in turn, leads to higher incomes for individuals. Buoyant capital markets have also led to gains for individuals. Also, advanced technology, particularly AI, is playing a significant role in improving tax administration.
“Tax authorities are increasingly using technology to match income declared in ITRs with information from various sources like banks, financial institutions, and property registrars. This helps detecting discrepancies and encouraging higher compliance, especially among high-income earners. Overall, the surge in crorepati ITR filers is a positive sign for the country reflecting on increasing prosperity and improved tax compliance,” he said.
India’s direct tax-to-GDP ratio has hit a 24-year high of 6.64 percent in the fiscal year 2023-24. Also, direct tax collections have surged by over 182 percent during the last decade, reaching more than Rs 19.60 lakh crore in FY24.
Sudhakar Sethuraman, Partner at Deloitte India, said Indian economy registered a growth of 8.15 per with an estimated revenue growth of 9.6 per cent approximately.
Consequently, there is a natural increase in individual income levels and spending power. Besides this, the scope and requirement for tax return filing is not confined to just income levels.
“Even certain spendings are critical triggers for tax return filing. One could also appreciate that the enhancement is reflected in every slab of income; indicating that there is no stagnation of growth after a certain level,” he said.
The number of filers and taxpayers has the potential to rise further.
“Given our low tax to GDP ratio, work in still required to bring more taxpayers within the tax bracket. Very few (approximately 1.5 per cent) taxpayers contribute to the entirety of individual tax collections,” said Maheswari. Sethuraman concluded that given industrial/technological developments and collaborations within and overseas, the positive trend is most likely to continue.
- Also read: Corporates can file ITR for FY25 till November 15
