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Review Of Recent Income Tax Returns Statistics

The Income Tax Department has recently released income tax return statistics for the assessment years (AY) 2019-20 to 2021-22. These figures highlight an increase in compliance.

There’s also a noticeable shift of taxpayers moving from lower-income brackets to higher ones. Despite this, there is a significant number of taxpayers who don’t file their tax returns.

This issue is causing concern among policymakers.

Key Points To Remember

  • For the AY 2021-22 (FY 2020-21), the total number of taxpayers filing income tax returns rose by 5.6%, reaching 6.75 crores.
  • This is an increase from the 6.39 crore taxpayers in the previous year.
  • The number of individual taxpayer filings showed a significant increase of 90% over the nine-year period from Assessment Year 2013-14 to AY 2021-22 (FY21).
  • Alongside this, approximately 2.1 crore taxpayers paid their taxes but did not file returns.
  • The tax department attributes this increase to the broadening of the tax base.
  • Measures taken have resulted in a robust growth in the gross total income for individuals in various income groups.
  • After a considerable gap, income tax-statistics, based on assessment-year linked return filings, have been released.
  • Data for the three years from AY 2019-20 to AY 2021-22 has been published together.

Taxpayer Trends

  • Recent statistics on income tax returns from AY 2019-20 to 2021-22 reveal broader compliance.
  • These trends also show a shift of taxpayers towards higher income brackets.
  • Despite broader compliance, there are taxpayers who do not submit their tax returns.
  • Most taxpayers fall into the category of not paying any tax.
  • With over 2.1 crore taxpayers paying taxes through Tax Deducted at Source (TDS) but not filing returns, the issue of non-filing remains substantial.
  • Even so, there is a noticeable increase in the total filings of income tax returns over the years.

Key Highlights From Recent Income Tax Statistics

  • For the assessment year 2020-21, there were 6.75 crore taxpayers. This includes individuals, companies, Hindu Undivided Families (HUFs), and Associations of Persons (AOPs).
  • This number is a 5.6% increase from 6.39 crore taxpayers in the previous year.
  • Among these 6.75 crore taxpayers, 4.46 crore did not pay taxes for the year 2021-22.
  • Approximately 2.1 crore taxpayers paid their taxes but failed to file their returns.
  • Apart from the assessment year 2020-21, roughly 2.1 crore taxpayers have consistently paid taxes but not filed returns since the assessment year 2018-19.
  • The percentage of taxpayers who paid no tax increased from 40.3% in 2018-19 to 66% in 2021-22.
  • The count of individuals who paid no tax rose from 2.23 crore in 2018-19 to 4.28 crore in 2021-22.
  • Similarly, the number of companies that paid zero tax also grew, starting from 3.73 lakh in 2018-19 to 5.08 lakh in 2021-22.

Income Tax Return Data For Salaried Individuals

  • In the Assessment Year (AY) 2021-22, a total of 6.36 crore individuals filed income tax returns.
  • This group represented over 94% of the country’s total taxpayers, which was 6.75 crore.
  • The largest group of salaried taxpayers, totaling 3.25 crore individuals, fall into the category of zero salary income.
  • The next group, totaling 94.52 lakh individuals, falls within the salary income bracket of Rs 5.5-9.5 lakh.
  • The third largest group, totaling 32.6 lakh individuals, falls within the salary income bracket of Rs 10-15 lakh.

Other Key Numbers

  • The income group earning between Rs 15-20 lakh saw the highest growth rate among salaried taxpayers, with an increase of 13.9% from the previous year.
  • The income group earning Rs 20-25 lakh followed closely behind with a growth rate of 12.4%.
  • There was lower growth in the income slabs of Rs 10-15 lakh and Rs 5-10 lakh, with an increase of 4.9% and 2.6%, respectively.
  • The FY21 numbers were impacted by the pandemic.
  • The taxpayers earning the least or paying no income tax increased to 1.35 crores in AY 2021-22, an increase from 1.32 crores in AY 2020-21.
  • There was a substantial decrease in the number of salaried individuals paying no income tax, falling to 1.32 crores in AY 2020-21 from 1.63 crores in AY 2019-20 and 1.46 crores in AY 2018-19.
  • The primary opposition party in India has raised concerns about the growing income gap between the ultra-rich and middle class.
  • In the fiscal year 2013-14, the top 1% of income tax payers earned 17% of all income. This increased to 23% by 2021-22.
  • The income of the ultra-rich grew 60% faster than that of the lowest 25% of taxpayers from 2013-14 to 2021-22.
  • This growth was calculated at 13% year-on-year.
  • After adjusting for inflation, the real income of the lowest 25% taxpayers in 2022 was lower than in 2019.
  • Specifically, the gross income of the lowest 25% fell by 11%, from Rs 3.8 lakh crore in FY 19 to Rs 3.4 lakh crore in FY 22.
  • Contrarily, the real income of the top 1% saw a 30% increase, from Rs 7.9 lakh crore in FY 19 to Rs 10.2 lakh crore in FY 22.
  • This growth in income inequality has sparked concerns about the distribution of wealth and opportunities in India.

Source: The Indian Express

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