Income tax returns filers’ count may cross 90 million in AY25: SBI report

The total number of income tax returns filers could exceed 90 million for assessment year 2024-25 (AY25) by the end of March 2025, a new report has said, while calling for a flat income tax rate for individuals earning over Rs 8 lakh, specifically targeting those aged between 60 and 80.

“For AY25, 7.3 crore (73 million) ITRs have been filed by the due date and another about 2 crore (20 million) returns are expected to be filed in the remaining financial year till March 25, thereby taking the total number close to or over 9 crore (90 million),” said a Research Report from the Economic Department of State Bank of India, titled How Tax Simplification has given a necessary fillip to ITR Filing.

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ITR filing has increased sharply over the years and stood at close to 86 million in AY24 as against 73 million in AY22, the report noted, adding that the number of returns filed after the due date is also declining in an indication of discipline among tax-payers along with the simplification of IT forms and processed.

With the government also undertaking a review of the Income Tax Act, 1961, that was announced in the Union Budget 2024-25, the report has also suggested several changes. It has called for switching from progressive taxation to a uniform taxation with a flat tax rate for individuals earning over Rs 8 lakh, specifically targeting those aged between 60 and 80, with additional provisions for individuals aged 80 and above.

It has also proposed raising the tax deducted at source (TDS) threshold on bank interest payments to at least Rs 1 lakh from the current Rs 10,000 to address the outdated limit and the compliance burden on taxpayers. Further, it has proposed that the government should consider allowing annual issuance of TDS certificates (Form 16A) instead of quarterly, aligning it with Form 16 for salaries, since Form 26AS is primarily used for credit.

The report has also called for prioritising the review of the Income tax Act in the Union Budget 2025-26 and to introduce it as a money bill which would enable its swift passage within 75 days. “There should be no amendments to the Income Tax Act, 1961 in the Budget 2026 and all direct tax proposals should be reflected in the new Code,” it has underlined.

At present, a committee of officers in the Central Board of Direct Taxes is reviewing the Income Tax Act and it is expected that the exercise will be over in the coming months ahead of the Budget.