Record-breaking 7.4 Crore ITRs Filed! Over 5.16 Crore Declare Zero Tax Liability: Insights from Finance Minister

In the recent update from New Delhi, Finance Minister Nirmala Sitharaman revealed that there has been a notable 6.18 per cent increase in the number of entities, including individuals, who filed income tax returns during the financial year 2022-23. The total number of income tax return filings surpassed a staggering 7.40 crore, indicating a positive trend in tax compliance.

Among these filings, approximately 5.16 crore individuals declared zero tax liability, showcasing a significant portion of taxpayers who were not liable to pay any income tax. This data was shared during the Lok Sabha session, providing insights into the current tax landscape in the country.

Furthermore, the gross direct tax collection in India witnessed an impressive growth of 20.33 per cent, amounting to over Rs 19.68 lakh crore during the fiscal year 2022-23. This substantial increase in tax collection reflects the nation's economic resilience and expanding tax base.

Comparing the return filing data over the past four years, the figures demonstrate a consistent upward trend. In the preceding fiscal year 2021-22, over 6.94 crore income tax returns were filed, with more than 5.05 crore individuals reporting zero tax liability. In the fiscal years 2020-21 and 2019-20, the numbers of filed ITRs were 6.72 crore and 6.47 crore, respectively, showcasing a progressive growth in tax compliance over time.

Among the tax return filers, sizeable numbers of individuals, 4.84 crore, and 2.90 crore in the respective fiscal years, had zero tax liability. This trend highlights the diverse tax scenarios faced by taxpayers and underlines the importance of understanding tax exemptions and deductions.

The government's concerted efforts to increase tax compliance have yielded positive results. Measures such as the expansion of the scope of Tax Deducted at Source (TDS) and Tax Collected at Source (TCS), simplification of personal income tax processes, prefiling of ITRs, updated returns, and the introduction of new Form 26AS have played instrumental roles in encouraging more individuals to join the taxpayer community.

To further boost compliance, the tax department has adopted proactive approaches, including issuing e-mails and SMS reminders to taxpayers, urging them to file their ITRs and fulfill their tax obligations. Additionally, extensive publicity campaigns have been undertaken to raise awareness about the significance of filing tax returns and contributing to the nation's development through responsible taxpaying practices.

Overall, the rise in income tax return filings and the increasing number of individuals declaring zero tax liability indicate a positive trajectory in the country's tax ecosystem. With continued efforts from the government and active participation from taxpayers, the nation's economic landscape is poised for further growth and stability.