The Income Tax Department has achieved a significant milestone with a record 7.28 crore Income Tax Returns (ITRs) filed in the assessment year (AY) 2024-25. This represents a 7.5% increase over the previous year's 6.77 crore ITRs, reflecting the expanding tax base and growing confidence in the tax system under Prime Minister Narendra Modi's government.
One of the most noteworthy achievements of the current administration is the drastic reduction in the average processing time for tax returns. Finance Minister Nirmala Sitharaman highlighted that the average processing time for ITRs has been slashed from 93 days in 2013 to just 10 days in 2024. This rapid turnaround is a result of the government's consistent efforts to modernize tax assessment methodologies and introduce updated systems that streamline the filing and processing of tax returns.
The introduction of the new income tax regime, coupled with the simplification of tax processes, has played a crucial role in making tax filing more accessible and efficient for taxpayers. As of July 31, 2024, over 58.57 lakh ITRs were filed by first-time taxpayers, underscoring the broadening tax base in India's growing economy.
Furthermore, the government's focus on equitable tax treatment and middle-class benefits has led to significant tax reliefs. In 2023, the effective tax on an annual income of ₹15 lakh was reduced to 10%, with further reductions introduced this year under the new tax regime. This has resulted in 5.2 crore taxpayers, or 72.8% of the total, opting for the new tax regime by the AY 2024-25 deadline.
Looking ahead, the government is preparing a comprehensive review of the Income Tax Act, with the first draft expected to be available for stakeholder consultation within the next six months. This move aims to further refine the tax system, ensuring it remains responsive to the needs of a dynamic economy.
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