Income tax return submission: 20% reduction in late-filed ITRs by 2024

Income tax return Income tax return: In the assessment year 2022–23 (AY23), there were 74 million income tax filers overall, up from 70 million in the AY22, according to a new report published on January 5, 2023 by State Bank of India researchers.

A breakdown of the individual taxpayers’ returns filed across various categories of gross total income was recently made available by the income tax department. It said that between AY14 and AY22, there was a notable shift towards higher gross total income brackets, as evidenced by the 295% increase in the number of individual taxpayers earning between Rs 5 lakh and Rs 10 lakh. Furthermore, there was a 291% increase in earnings for those between Rs 10 lakh and Rs 25 lakh. In total, 74 million people filed income taxes in AY23 compared to 70 million in AY22.

Read also: Income tax dept sent mass messages to ITR filers relating to high value transactions

82 million ITRs for AY24 have been filed as of December 31. An additional 5-8 million returns are anticipated to be filed in the remaining months of the fiscal year, through March. This brings the total number of returns filed to over 85 million, or approximately 37% of the formal labor force.

We predict that in AY24, the percentage of IT returns filed after the deadline may fall to about 20%. According to the report, this illustrates tax payers’ discipline as well as the streamlining of IT forms and procedures brought about by CBDT’s ongoing efforts to create an effective, digitally-heavy filing, verification, and return architecture free of complications.

According to the study, which examined data from tax returns, inequality decreased between FY14 and FY22 as indicated by the Gini coefficient. It also noted that 36.3% of those who were in the lowest income category in FY14 have since climbed the income scale.

Read also: Here’s why Indian taxpayers prefer old income tax regime over new tax regime

Data from the Financial Year 2014 (AY 2015) shows that there was a considerable amount of upward mobility among individual ITR filers across different income brackets. Notably, 36.3% of people who were previously in the less than Rs 3.5 lakh income bracket have moved into higher income categories, as was previously mentioned. In particular, 15.3% proceeded to the Rs 3.5 lakh to Rs 5 lakh and the Rs 5 lakh to Rs 10 lakh brackets, 4.2% to the Rs 10 lakh to Rs 20 lakh bracket, and the remaining percentage increased still higher.

Significantly 21.1% of the gross income has risen to higher brackets within the lowest income group (less than Rs 4 lakh), with 6.6% going to the Rs 4 lakh to Rs 5 lakh group, 7.1% to the Rs 5 lakh to Rs 10 lakh group, 2.9% to the Rs 20 lakh to Rs 50 lakh group, and 0.8% to the Rs 50 lakh to Rs 1 crore group.

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