ITR filing: No. of income tax fliers increased by 120% from 2014 to 2024, sources say

The number of income tax filers has witnessed a remarkable 120% increase over the span of a decade. According to sources from the Finance Ministry, there has been a significant surge in tax returns among individuals earning an annual income exceeding Rs 50 lakh. In 2014, there were 1.85 lakh returns filed by individuals in this income bracket, which escalated to 9.39 lakh in 2024. The sources attribute this substantial increase to enhanced compliance within this particular income group. 

According to the latest income tax return (ITR) filing data, the number of individuals reporting annual income exceeding Rs 50 lakh has surged to over 9.39 lakh in the fiscal year 2023-24, marking a substantial five-fold increase from the 1.85 lakh individuals in 2013-14. Furthermore, the income tax liability of those earning above Rs 50 lakh has escalated by 3.2 times, reaching Rs 9.62 lakh crore in 2024 from Rs 2.52 lakh crore in 2014.

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The source revealed that a significant 76 per cent of the total income tax collected is contributed by individuals earning above Rs 50 lakh annually, consequently alleviating the tax burden on the middle class.

The significant rise in the number of taxpayers reporting income above Rs 50 lakh can be attributed to the robust anti-tax evasion and black money laws introduced by the Modi government, as stated by the source.

The percentage of income tax returns filed by individuals in the income brackets of Rs 4.5 lakh to Rs 9.5 lakh saw a rise to 52% during AY2023-24, compared to 54.6% from the Rs 1.5-3.5 lakh segments in AY 2013-14. Additionally, one in every four returns filed fell within the Rs 5.5-9.5 lakh segment, in contrast to one in every five from the Rs 2.5-3.5 lakh bracket, as per the data.

The group with a gross total income of Rs 5.5-9.5 lakh has increased its dominance, now representing over 23% share, up from 18% in AY2013-14. However, there have been notable shifts as well. For instance, the Rs 10-15 lakh income range emerged as the second largest contributor with a share of over 12%, followed by 10% in the Rs 25-50 lakh range. In comparison, during AY2013-14, the Rs 2.5-3.5 lakh group held the second largest contributor position with a 12.8% share.

According to the source, in 2014, individuals with an annual income above Rs 2 lakh were required to pay income tax. However, due to exemptions and deductions introduced by the Modi government, individuals earning up to Rs 7 lakh are now exempt from paying taxes.

The portion of income tax collected from individuals earning less than Rs 10 lakh has decreased from 10.17% of the total tax paid in 2014 to 6.22% in 2024.

As per the source, individuals earning between Rs 2.5 and Rs 7 lakh had an average income tax liability of Rs 43,000 in the fiscal year 2023-24, which accounts for approximately 4-5% of their income. This is noted to be the lowest level among emerging economies.

Furthermore, the source indicates that official calculations show a nearly 60% decrease in tax liability for individuals earning between Rs 10-20 lakh, when adjusting for inflation over a 10-year span.

The number of income tax returns filed by individuals has significantly increased, from over 3.60 crore in 2013-14 to 7.97 crore in 2023-24, marking a notable 121% increase.

Recent data released by the Income Tax department revealed that the count of individuals declaring taxable income above Rs 1 crore in their tax returns surged from 44,078 in the assessment year 2013-14 (financial year 2012-13) to nearly 2.3 lakh in the assessment year 2023-24 (financial year 2022-23), indicating potentially higher incomes and improved compliance. Correspondingly, the number of tax returns filed by individuals more than doubled from 3.3 crore to over 7.5 crore during this period, as per the latest data provided by the tax department.

In the latest assessment year, nearly 52% of salaried individuals disclosed an income exceeding Rs 1 crore, which is higher than the 49.2% reported in AY2022-23 and the 51% reported in AY2013-14.