ITR filings rise 32 per cent in five years, says government

With numbers rising from 6.48 crore in FY20 to 8.56 crore in FY25 officials attribute the surge to digitisation, policy reforms, and compliance measures

New Delhi: The number of people filing income tax returns (ITR) in India has grown by over 32 per cent in the past five financial years, the Parliament was informed on Tuesday. While 6.48 crore people filed ITRs in FY 2019-20, the figure rose to 8.56 crore in FY 2024-25, Minister of State for Finance Pankaj Chaudhary, said in a written reply to a question in the Rajya Sabha.

This is an increase of more than 2 crore taxpayers — reflecting a steady rise in tax compliance and expansion of the tax base, as per the data shared by the Finance Ministry. The Minister highlighted that the government has taken several policy measures over the last two decades to bring more people into the tax net.

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These include expansion of the scope of TDS and TCS to cover transactions like foreign remittances, luxury car purchases, e-commerce sales, and immovable property deals. The introduction of the new Form 26AS and the Annual Information Statement (AIS) has also made taxpayers more aware of their financial transactions and nudged them towards accurate reporting.

The government has further simplified the filing process by introducing pre-filled ITR forms and allowing taxpayers to file updated returns within four years of the relevant assessment year. The e-Verification Scheme, launched in 2021, flags mismatches between third-party data and ITR filings, encouraging voluntary compliance before scrutiny.

Policy changes have also included structural reforms like reduced corporate tax rates, simplified personal income tax slabs, and the enactment of strong laws such as the Black Money Act (2015) and the amended Benami Transactions Prohibition Act (2016). These measures, officials said, have helped in improving transparency and boosting compliance.

While data on the percentage of the population filing returns 20 years ago is not available due to paper-based filing at that time, the Ministry underlined that the reforms undertaken since then have led to a significant expansion of India’s tax base.

The government, however, clarified that it has not identified any specific sectors or demographics with low compliance. The rise in ITR filers, officials believe, indicates that policy reforms combined with digitisation and enforcement are steadily moving India towards a broader and more transparent tax base.