Indians are becoming more disciplined in filing income-tax returns

economictimes.indiatimes.com:

SBI Research which analysed Income Tax Return (ITR) filings data. The share of returns filed after the due date (with fine) has witnessed a significant decline from a high of 60 per cent in assessment year (AY) 2020 to merely 25 per cent in AY23. This number is expected to fall further to 20 per cent in AY24.

«This reveals the discipline among tax-payers along with the simplification of IT forms and processes driven by constant efforts of CBDT to build an efficient, digital-heavy filing, verification and return architecture sans hassles,» it said. Furthermore, the number of Indians paying tax has also increased in AY23. The total ITRs filed during AY23 surged to 78 million from 73 million in AY22.

Of these, 58 million or 75 per cent of the returns were filed on or before the due date, said the report. For AY24, 68 million ITRs have been filed by the due date and another 18-20 million returns are expected to be filed in the remaining financial year till March 2024. The ITR filing is likely to cross 85 million in the current assessment year.Rising income of the middle class An interesting find from the report is an increase in the income of the middle class population.

The report says that the weighted mean income of Rs 4.4 lakh in AY14 has increased to Rs 13 lakh in AY23. It can be linked with transition from lower income group to upper income group. A buoyancy in the number of tax-filers who were earlier not reporting income is another significant factor.