Data Point: India’s Widening Tax Base

Context:

According to the Central Board of Direct Taxes (CBDT), increasing filing of income tax returns (ITRs) by individual taxpayers is an indication of the widening of tax base due to measures taken by the Income Tax Department.

90% Increase in ITRs Filing: It increased to 6.37 crore in Assessment Year (AY) 2021-22 (financial year 2020-21) from 3.36 crore in AY 2013-14.
- Around 7.41 crore ITRs have been filed for AY 2023-24 till date during the current fiscal, including 53 lakh new first time filers.
Positive Trend: Migration to higher range of gross total income.
- In the range of gross total income of Rs 5-10 lakh, and Rs 10-25 lakh, the ITRs filed by individual taxpayers registered an increase of 295% and 291% from AY 2013-14 to AY 2021-22, respectively.
Not Filing ITRs: The range of gross total income upto Rs 5 lakh includes individuals having income below taxable limit who may not be filing returns.
Trend of proportionate contribution of gross total income of individual taxpayers vis-à-vis all individual taxpayers from AY 2013-14 to AY 2021-22:
- Top 1%: Decreased from 15.9% to 14.6%
- Middle 74%: Increased from 75.8% to 77%.
- Bottom 25%: Increased from 8.3% to 8.4%.
Total Number of Taxpayers: Picked up pace in FY 2020-21 to 6.33 crore though it remained below pre-pandemic 2018-19 level by over 20 lakh.