ITR Filing: How Many People File Income Tax Returns In India? Here's What Official Data Tells Us

Finance Minister Nirmala Sitharaman provided the number of people who have filed Income Tax returns in a reply to a question in Lok Sabha. According to the official data, around 7.4 crore people had filed ITR in FY23. This is an increase of 6.18 per cent from the year ago period when 6.94 crore people filed ITR.

As the last date to file ITR approaches, which is July 31, this number is expected to go up further. Commenting on the growth seen in number of people filing the returns, the finance minister said that it can be attributed to several initiatives of the government. Expansion of TDS/TCS scope, simplification of personal income tax rules and non-filers monitoring systems, among others, have been some of the reasons behind the increase, the FM said.

In her reply, the finance minister also provided the state-wise breakdown of ITR data, along with how it has evolved over the years. Looking at the latest data for Income Tax collection and ITR, here’s what the government data tells us.

As per the data for FY23 so far, the highest number of Income Tax returns have been filed in Maharashtra. With 1.13 crore people filing returns, the state leads the tally. The second highest number of ITR were filed in Gujarat while Uttar Pradesh ranked third in the tally.

Out of the 7.4 crore people who have filed their ITR, 5.16 crore returns have zero tax liability. In 2019-20, the number of people with zero tax liability stood at 2.9 crore while the total number of returns were 6.4 crore. The government had increased the tax exemption to Rs 5 lakh in the 2019 budget. This has been further increased to Rs 7 lakh under the new tax regime.

Looking at the broader trends of direct tax collections under which income tax falls, its share in total tax collections has steadily risen since the start of the century. In FY2001, the percentage share of direct tax in total tax collections was 36 per cent which increased to 52 per cent in 2021-22. Direct taxes majorly constitute corporate and personal income taxes. The share of direct tax in total collections surpassed indirect tax collection in 2007-08. Except in 2016-17 and 2020-21, it has remained above indirect taxes since then.