Income Tax Return Filing Rose 6.18% In FY23, Says Nirmala Sitharaman

The number of people filing income tax returns rose by 6.18% in FY23 as compared with FY22, said Union Finance Minister Nirmala Sitharaman.

The total number of people who filed tax returns as of FY23 stands at 7.4 crore, she said in response to a question posed during the ongoing monsoon session of Parliament.

Of this, 5.1 crore incurred zero tax liability, indicating that the taxpayer is below the taxable income threshold in a particular financial year. This effectively brings the total number of people who contributed to government tax revenue to 2.2 crore.

The Finance Minister also provided data on the number of tax filers from each state since FY20.

Under the new tax regime, the taxable income threshold begins at Rs 3 lakh per annum. However, in a move to incentivise the salaried class to switch to the new tax regime, the Union Budget 2023 announced a tax rebate for those with an annual income of up to Rs 7 lakh.

Maharashtra had the highest number of tax return filers, owing to the size of the tax base in the state.

Of the 7.4 crore tax filers, 1.13 crore belonged to the state in FY23. It was followed by Gujarat with 74,000 odd tax return filers and Uttar Pradesh with 71,000 filers.

The department has taken various measures to increase the number of taxpayers, such as the expansion of the scope of Tax Deducted at Source and Tax Collected at Source, the simplification of personal income tax, pre-filed IT returns, allowing updated returns, the new Form 26AS that serves as an annual information statement with details on deductibles, and non-filer monitoring systems, among others.

"The government has undertaken several measures, such as setting up taxpayers’ lounges at various events, trade fairs, and exhibitions to raise tax awareness among the general public and school-going children," Sitharaman said.

Publicity campaigns are also run through SMS, emails, YouTube, and the Twitter handle of the department, urging taxpayers to file their returns on time.