Introduction
In a significant development, most of India's personal income taxpayers have transitioned to the new tax regime for the current assessment year. According to the Central Board of Direct Taxes (CBDT), 72% of those who filed their returns by the July 31 deadline opted for the new tax regime, contributing to a record high of almost 7.29 crore Income Tax return filings.
Key Statistics and Insights
The CBDT reported that out of the 7.28 crore I-T returns filed for Assessment Year 2024-25, 5.27 crore were under the new tax regime, compared to 2.01 crore under the old regime. This shift is seen as a positive sign, with the CBDT describing the increase in taxpayers under the new regime as 'heartening'.
Changes in the New Tax Regime
The new tax regime, introduced in 2020, has been made more attractive following significant changes announced in the Budget 2023-24. These changes include:
- Reduction of tax rate slabs from six to five.
- Increase in the tax-free income limit from ₹2.5 lakh to ₹3 lakh.
- Hike in the tax rebate limit from ₹5 lakh to ₹7 lakh per year.
- Increase in the standard deduction from ₹50,000 to ₹75,000.
These adjustments have likely expedited the switchover to the new regime, which has been made the default tax regime for taxpayers.
First-Time Filers and Widening Tax Base
The department also noted that nearly 58.6 lakh I-T returns were filed by first-time filers, indicating a widening of the tax base. However, back-of-the-envelope calculations suggest that about 7.19 lakh taxpayers who filed their returns on time last year missed the deadline this year.
Enhanced E-Filing Portal
In response to concerns about slow processing and downtimes on the I-T e-filing portal, CBDT chairperson Ravi Agarwal confirmed that the portal's handling capacity had been ramped up. The data indicates this improvement was successful, with ITR filings soaring from 28 lakh on July 24 to almost 70 lakh on July 31. The peak filing day saw over 69.92 lakh ITRs filed, with the highest per-hour rate of 5.07 lakh recorded between 7 p.m. to 8 p.m.
Impressive Portal Performance
The e-filing portal's performance during the peak period was noteworthy:
- The highest per second rate of ITR filings was 917, achieved on July 17 early morning.
- The highest per-minute rate of ITR filings was 9,367 at 8.08 p.m. on July 31.
- On July 31, successful logins stood at 3.2 crore.
Additionally, 43.82% of ITRs were filed using the online utility available on the e-filing portal, with the remainder filed using offline ITR utilities.
Conclusion
The record-high I-T return filings and the significant shift to the new tax regime underscore the effectiveness of recent tax policy changes and improvements in the e-filing system. As more taxpayers embrace the simplified new tax regime, the Indian tax landscape is poised for greater efficiency and inclusivity.
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