A new milestone has been achieved in India as over 7.28 crore income tax returns (ITRs) were filed by the July 31 deadline for the assessment year 2024-25, the income tax department reported. This figure surpasses the 6.77 crore ITRs filed the previous year, reflecting a significant increase in tax compliance.
The tax department highlighted that of the total ITRs filed, a substantial 5.27 crore were under the new tax regime, compared to 2.01 crore under the old tax regime. This shift indicates a growing preference for the new tax structure, which offers simplified tax slabs and the removal of various exemptions and deductions.
The filing activity peaked on July 31, 2024, the last day for salaried taxpayers and other non-tax audit cases, with an impressive 69.92 lakh ITRs filed in a single day. Additionally, the department noted that 58.57 lakh ITRs were submitted by first-time filers, showcasing the widening of the tax base and greater inclusion of new taxpayers.
Why This Is a Positive Development
- Increased Tax Compliance: The record number of ITRs filed indicates a higher level of tax compliance among citizens, which is crucial for the government’s revenue collection and public expenditure.
- Preference for the New Tax Regime: The significant number of filings under the new tax regime suggests that taxpayers are finding it beneficial, potentially due to its simplified structure and ease of filing.
- Expansion of the Tax Base: With 58.57 lakh first-time filers, the tax base is broadening. This not only helps in increasing the revenue but also indicates economic growth as more individuals and businesses are earning taxable income.
- Efficient Tax Administration: The ability to handle such a high volume of filings, especially on the last day, reflects the efficiency and robustness of the tax administration system.
- Economic Insight: The data on ITR filings provides valuable insights into the economic activities of individuals and businesses, helping in better fiscal planning and policy formulation.
Overall, the surge in ITR filings is a positive sign of a growing and maturing economy with responsible taxpayers contributing to the nation’s development.
