The total number of income tax returns (ITRs) filed in FY25 reached a record 83.9 million by December 31, 2024, marking a 4% increase from the previous year, according to government data.
Key Trends in ITR Filings
Consistent Growth: ITR filings have steadily increased over the last five years:
- FY20: 64.7 million
- FY21: 67.2 million
- FY22: 69.4 million
- FY23: 74 million
- FY24: 80.7 million
- FY25: 83.9 million
High Number of Nil Returns:
- 55.7 million ITRs in FY25 reported zero tax liability, slightly higher than 55 million in FY24.
- Over the last five years, nil returns have consistently risen, reflecting improved tax compliance.
Government Measures Driving the Surge
Enhanced Taxpayer Services:
- New Form 26AS provides detailed tax payment and financial transaction insights.
- Pre-filled ITRs simplify tax filing by auto-populating details like salary, bank interest, and dividends.
Expanded Tax Net:
- Wider TDS/TCS coverage now includes transactions like high-value cash withdrawals, foreign remittances, luxury car purchases, e-commerce sales, and real estate transactions.
- Stricter enforcement under the Black Money Act, Benami Law, and e-verification scheme has boosted compliance.
Corporate Tax Cuts:
- Lower corporate tax rates have incentivized more businesses to file returns, broadening the tax base.
Why This Matters?
The surge in ITR filings highlights India's growing tax base, enhanced digital tax infrastructure, and improved compliance. With simplified tax processes and increased enforcement, the government is ensuring more taxpayers come under the income tax framework.
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