7,40,09,046 persons filed ITR in FY 2022-23

The Minister of State Shri Pankaj Chaudhary in the Ministry of Finance in a written reply to a question raised in Lok Sabha said that 7,40,09,046 persons filed ITR in FY 2022-23.

The Minister Shri Sanjay Seth and Shri T.R. Baalu raised the following questions in Lok Sabha:

Will the Minister of FINANCE be pleased to state:

(a) whether the filing of Income Tax Returns (ITR) has seen a sharp increase during the last five years, if so, the details thereof along with the zero liability ITR filed during the above-said period, State-wise;

(b) whether the increase in the number of persons filing tax returns brought in a proportionate increase in tax amount collection, if not, the reasons therefor;

(c) the details of people filed ITR from Jharkhand in the financial years 2021-22 and 2022-23, district-wise;

(d) the steps taken or proposed to be taken by the Government to further increase the number of persons filing ITR;

(e) whether the personal income tax limit has not been increased to the level commensurate with the creamy layer income levels prescribed for reservation purposes in recruitments of OBCs and EWS; and

(f) if so, the details thereof and the reasons therefor?

Replied by Minister of State Shri Pankaj Chaudhary:

(a): (i) Yes, there has been an increase in the number of returns filed in the last five years. The state-wise number of persons who have filed ITRs in the last five years is submitted as per Annexure-‘A’

(ii) State-wise number of persons whose I-T return amounts to zero tax liability during the last four years is submitted as Annexure-‘B’.

(b) There may not be a proportionate increase in direct tax collection and the number of income tax returns filed because the direct tax collection is dependent upon multiple factors which include tax rate applicable for the relevant assessment year, admissible deductions/ exemptions under the law, overall economic growth in various sectors in the economy, etc. However, the data of net direct tax Collection from F.Y. 2018-19 to F.Y. 2022-23 is as under:

(c) The district-wise data of ITRs filed for 2021-22 and 2022-23 is not maintained. However, details of ITRs filed from Jharkhand for 2021-22 and 2022-23 are as under:

(d) Steps taken by the Government to further increase the number of persons filing ITR are as under –

(i) New Form 26AS – This new form contains all information of deduction or collection of tax at source, specified financial transaction (SFT), and payment of taxes, demand and refund etc. Further, details of SFT data in Form 26AS makes taxpayer aware about their transactions beforehand and encourages them to disclose their true income.

(ii) Pre-filling of Income-tax Returns – In order to make tax compliance easier pre-filled Income tax Returns (ITR) have been provided to individual taxpayers. The scope of information for pre-filing includes information such as salary income, bank interest, dividends, etc.

(iii) Updated Return – Section 139(8A) of the Income-tax Act, 1961 (the Act) facilitates the taxpayer to update his return anytime within two years from the end of the relevant assessment so that he can file an updated return by voluntarily admitting omissions or mistakes and paying an additional tax as applicable. Further, an e-verification scheme was launched to allow taxpayers to disclose their unreported or under-reported income in the updated ITR.

(iv) Reduction in the Corporate tax rate – Starting from the Finance Act of 2016, the corporate tax rates have been gradually reduced while phasing out the exemptions and incentives available to the corporates so as to increase the tax base.

(v) Simplification of the Personal Income-tax – Finance Act, 2020 provided an option to individual taxpayers for paying income-tax at lower slab rates if they do not avail specified exemptions and incentives.

(vi) Expansion of scope of TDS/TCS – For bringing new tax-payers into the income-tax net, scope of TDS/TCS was expanded by including huge cash withdrawal, foreign remittance, purchase of luxury car, e-commerce participants, sale of goods, acquisition of immovable property, purchase of overseas tour program package etc.

(e) and (f): There is no linkage between the basic exemption limit of personal income tax and the annual income limit for the purposes of determination of creamy layer among OBCs and EWS group of general category. The basic exemption limit of an individual under the Income-tax Act, 1961 is referable to the net income chargeable to tax after admissible deductions/ exemptions of the particular person. Whereas the income limit for the purposes of determination of creamy layer among EWS group of general category is the annual income of family from all sources and of parental income for OBCs who do not fall with the other conditions prescribed for determination of Creamy Layer.

Further, India has a progressive taxation structure under which an individual or Hindu undivided family (HUF) or an association of person or body of individuals or artificial juridical person is required to pay tax at a higher rate with an increase in income levels.

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