Income Tax News: Number of Crorepati Taxpayers in India Doubles in Last 5 Years

Income Tax News: In a remarkable trend revealed in data presented in the Rajya Sabha, the number of individual crorepati income tax return (ITR) filers has nearly doubled over the last five years, including a significant increase during the challenging Covid years. Let's delve into the details of this financial shift and explore the factors contributing to the rise in high-income earners and ITR submissions.

Doubling Figures: A Detailed Examination

The data presented by Minister of State in the Finance Ministry, Pankaj Chaudhry, showcases a striking escalation. During the Assessment Year 2019-20, the number of individuals filing e-returns with an income exceeding ₹1 crore stood at over 1.09 lakh. Fast forward to the Fiscal Year 2022-23, and this figure surged to over 2.16 lakh, marking an impressive growth of 97 percent.

Steady Growth Amidst Pandemic Challenges

Even during the Covid-19 years, namely 2020-21 and 2021-22, the number of crorepati filers continued to rise steadily. For instance, in AY22, the number exceeded 1.27 lakh, showcasing a growth of 6.7 percent. This number further increased to 1.87 lakh in the subsequent Assessment Year, recording a remarkable growth of over 47 percent.

Potential Reasons Behind the Surge

While the Ministry has not explicitly stated the reasons for the surge, it is believed that not only has there been an increase in incomes, but there has also been a rise in the overall number of filers. The rise in the number of crorepati filers reporting 'profession' as one of the nature of business highlights the diverse sources of high incomes.

Government Initiatives Boosting Taxpayer Numbers

The government's efforts to enhance taxpayer participation have played a pivotal role in this upward trend. Key initiatives include the introduction of the new form 26AS, pre-filing of income tax returns to simplify the process, and the provision for taxpayers to update their returns under section 139(8A) within two years from the end of the relevant assessment year.

Fiscal Measures and Tax Regime Changes

The government's reduction in the corporate tax rate, starting from the Finance Act 2016, has created a favorable environment for businesses. The simplification of the personal income tax regime, offering taxpayers the option of lower tax rates in exchange for giving up certain exemptions and incentives, has also contributed to the evolving tax landscape.

Expanding the Tax Base: TDS/TCS Scope Expansion

To bring new taxpayers into the fold, the government expanded the scope of Tax Deducted at Source (TDS) and Tax Collected at Source (TCS). This included incorporating significant transactions such as large cash withdrawals, foreign remittances, and purchases of overseas tour programs into the TDS/TCS framework.

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