ITR filings surged, yet 70 lakh taxpayers vanished in just five years

Income Tax Return: Compared to 2019–20, the number of taxpayers who paid taxes fell by almost 33% in the fiscal year 2024–25. The government’s revenue from income taxes has risen despite this.

Income Tax Return: Although over 8 crore persons in the nation submitted income tax returns in the current fiscal year 2024–2025, the data shows that the number of taxpayers has dropped by roughly 70 lakhs over the previous five years. In other words, although more persons may have filed income tax returns, the actual number of taxpayers who paid taxes fell by almost 33% in the fiscal year 2024–2025 compared to 2019–20. Nevertheless, the government’s revenue from income taxes has consistently increased despite this.

The Finance Ministry was questioned during the Lok Sabha’s Question Hour on the number of individuals who had filed income tax returns in the nation during the past five years. The subject of how many people who submit income tax returns pay income tax was also posed. You might be rather surprised by the numbers provided by the Finance Ministry in response to these inquiries.

According to data from the Finance Ministry, 6,47,88,494 people submitted income tax returns in 2019–20. Of these, 2,90,36,234 people filed forms but did not pay any taxes, meaning that 3,57,52,260 people paid income tax during that year. The number of individuals filing income tax returns during the fiscal year 2024–2025 approached 8 crores.

While 8,39,73,416 people filed income tax returns during the current fiscal year, the number of income taxpayers has declined in comparison to previous years, according to data provided to the House. In the fiscal year 2024–2025, 5,57,95,391 individuals filed income tax forms but failed to pay any taxes, according to data provided by the Finance Ministry. In other words, just 2 crore 81 lakh 78 thousand 025 persons paid taxes for the fiscal year 2024–2025. 

In other words, although the number of persons filing income tax returns in the nation is undoubtedly rising every year, the number of income taxpayers has declined during the past five years. The new income tax system and the central government’s ongoing adjustments to the tax slabs can be regarded as the primary cause of this. For instance, the tax exemption of Rs 12 lakh, which Nirmala Sitharaman announced in the current budget, will result in a reduction of 1 crore taxpayers nationwide. In other words, although the number of people filing tax returns may rise in the upcoming fiscal year, the actual number of taxpayers may fall.

Additionally, this indicates that just around 2% of the nation’s 140 crore inhabitants genuinely pay taxes to the government. However, according to Gopal Kedia, a tax expert, “The government may have changed the structure of the tax slab and the number of taxpayers may have decreased, but still the government’s tax revenue has increased significantly in the last few years.” Gopal Kedia claims that the government has already received over 20 lakh crores from taxpayers in the current fiscal year and that an additional 2 to 3 lakh crores in taxes could be received by March 31. In other words, while the government is consistently increasing its revenue, it is also providing relief to those who pay income taxes, which is causing the number of taxpayers to decline.

The current budget predictions indicate that during the next fiscal year, the government’s income tax revenue could surpass 24 lakh crores. The goal of the government is clear: the wealthy should pay more taxes, the middle class should be required to file income tax returns even if they do not pay taxes on business or salary income up to Rs 12 lakh, and the lower classes should be exempt from filing returns and paying taxes.

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