The number of people filing income tax returns in the country is increasing year after year. But, income tax collection is not increasing as much as the number of ITRs. The reason for this is that the tax liability of most of the return filers is zero. According to the latest data of the Income Tax Department, out of the total 8.4 crore income tax returns (ITRs) filed in the financial year 2024-25 (till 31 December 2024), the tax liability of 5.58 crore filers was zero. This means that only one-third of the taxpayers paid taxes to the government.

According to the data, the share of taxpayers among the people filing income tax returns was 27.88% in 2020-21, which has increased to 33.55% in 2024-25. This ratio was 55% in 2019-20, when 6.47 crore people filed returns. After this, this percentage fell sharply. The main reason for this was the COVID-19 epidemic and its associated economic effects. In the financial year 2020-21 and 2021-22, the number of taxpayers was affected due to the corona epidemic and lockdown. However, in the subsequent years, tax compliance has increased due to the government simplifying the process of filing ITR, motivating taxpayers to file returns, and increasing the use of technology.

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Increase in tax collection and taxpayer base.

According to official data, 8,39,73,416 people filed ITR in the first nine months of FY 2025 (from April 1, 2024, to December 31, 2024). Of these, the tax liability of 5,57,95,391 was zero. In this way, only 2,81,78,025 people paid tax.

According to tax experts, the government has taken several new measures to increase the number of taxpayers. With the help of Form 26AS and Specified Financial Transaction (SFT) data by the Income Tax Department, taxpayers are being given complete information about their financial transactions. This motivates taxpayers to give information about their correct income.

Increase in declaration of foreign assets

Under a recent campaign run by the Central Board of Direct Taxes (CBDT), about 30,160 taxpayers have declared foreign assets worth more than ₹ 29,000 crore. Experts believe that the number of ITR filers may increase further in the coming years due to the government's efforts to ease tax compliance, make technical improvements, and motivate taxpayers to file returns.

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