NEW DELHI: The average gross income of individual taxpayers rose 56% from ₹4.5 lakh to ₹7 lakh in eight years ending assessment year 2021-22 and there was a 90% jump in the number of people filing income-tax returns (ITRs) during this period indicating rising income and widening of tax base due to India’s economic resilience and the government’s focus on compliance, an official time-series data showed.
Citing the data, the Union finance ministry on Thursday said the number of ITR filings has shown a consistent upswing over the last few years as returns filed by individual taxpayers have increased from 3.36 crore in assessment year (AY) 2013-14 to 6.37 crore in AY 2021-22.
An assessment year (AY) reflects income earned and revenue accrued to the exchequer in the previous financial year (FY).
According to the data, the filing of ITRs was growing consistently and 7.41 crore returns have been filed for AY 2023-24 as on date, which includes 53 lakh first-time filers.
“This is an indication of the widening of tax base subsequent to various reform measures put in place by the [Income-Tax] Department,” the finance ministry said in a statement.
The statement said the average gross total income for individual taxpayers increased from about ₹4.5 lakh in AY 2013-14 to about ₹7 lakh in AY 2021-22, representing an increase of 56%. The “increase in average gross total income for top 1% individual taxpayers is 42% while that for bottom 25% individual taxpayers is 58%,” it added.
The data is clearly indicative of a robust growth in the gross total income of individuals across different income groups subsequent to AY 2013-14, the finance ministry said.
The overall impact has been reflected in an increase in net direct tax collections from Rs.6.38 lakh crore in FY 2013-14 to Rs. 16.61 lakh crore in FY 2022-23, it added.
“This has been made possible due to the taxpayer-friendly and taxpayer-oriented progressive policies adopted by the government. The Department is committed to ensure transparency in processes, efficiency in administration and concerted efforts at building trust with taxpayers and stakeholders,” the statement said.
In the range of gross total income up to ₹5 lakh, the number of returns filed by individual taxpayers has increased from 2.62 crore in AY 2013-14 to 3.47 crore in AY 2021-22 registering an increase of 32%, it said. This range of income includes individuals having income below the taxable limit who may not be filing returns, it added.
In the range of gross total income of Rs. 5 lakh to Rs. 10 lakh, and Rs. 10 lakh to Rs. 25 lakh, the number of returns filed by individual taxpayers from AY 2013-14 to AY 2021-22 has registered an increase of 295% and 291% respectively, it said. “This indicates that individual taxpayers are showing a positive trend of migration to higher range of gross total income,” it added.
Analysing the gross total income of individual taxpayers for AY 2013-14 and AY 2021-22, it said: “The proportionate contribution of gross total income of top 1% individual taxpayers vis-à-vis all individual taxpayers has decreased from 15.9% in AY 2013-14 to 14.6% in AY 2021-22.”
“The proportionate contribution of gross total income of bottom 25% individual taxpayers vis-à-vis all individual taxpayers has increased from 8.3% in AY 2013-14 to 8.4% in AY 2021-22.” it said. The statement added that the proportion of gross total income of middle 74% group of individual taxpayers increased from 75.8% to 77% in the above period.
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