India’s tax base has widened sharply since 2013-14, with individuals moving up the income ladder and the proportion of super-rich taxpayers’ incomes declining, the Central Board of Direct Taxes (CBDT) said on Thursday, days after the Congress cited income tax data to show widening income inequality in the country.
The overall number of income tax (I-T) returns filed by individuals has risen from 3.36 crore to 6.37 crore through assessment years 2013-14 to 2021-22, while there is also an increase in number of returns filed by individual taxpayers across various ranges of gross total income, the CBDT said in a statement.
“In the range of gross total income up to ₹5 lakh, the number of returns filed by individual taxpayers has increased from 2.62 crore in AY 2013-14 to 3.47 crore in AY 2021-22, registering an increase of 32%. This range of income includes individuals having income below taxable limit who may not be filing returns,” the board pointed out.
Migration to higher range
For higher income ranges of ₹5 lakh to ₹10 lakh, and ₹10 lakh to ₹25 lakh, the number of individual returns filed surged 295% and 291% individuals over the same period, respectively. “This indicates that individual taxpayers are showing a positive trend of migration to higher range of gross total income,” the CBDT said.
Digging deeper into the data reveals that the proportionate contribution of gross total income of top 1% individual taxpayers vis-à-vis all individual taxpayers has decreased from 15.9% to 14.6%, the board said, while the share of the bottom 25% taxpayers increased from 8.3% to 8.4% over the same period.
“The proportion of gross total income of middle 74% group of individual taxpayers increased from 75.8% to 77% in the above period,” the statement said, adding that the average gross total income for individual taxpayers increased from about ₹4.5 lakh to about ₹7 lakh over the nine-year period, representing an increase of 56%.
“The increase in average gross total income for top 1% individual taxpayers is 42% while that for bottom 25% individual taxpayers is 58%,” it added.
The data indicates “robust growth in the gross total income of individuals across different income groups subsequent to AY 2013-14”, the board emphasised, adding this was reflected in the increase in net direct tax collections from ₹6.38 lakh crore in 2013-14 to ₹16.61 lakh crore in 2022-23.
As many as 7.41 crore I-T returns have been filed so far this year, which include 53 lakh first-time tax filers.
