Over 9.54 Lakh Crorepati Taxpayers File Income Tax Returns by October 31: A Surge in High-Income Filers

The latest income tax data released by the Income Tax Department in India paints a detailed picture of taxpayer trends for the financial year 2024-25, particularly within the higher income brackets. This analysis provides insights into the number of taxpayers with annual incomes of ₹1 crore and above, as well as those with over ₹10 crore in income. It also highlights a noteworthy rise in tax compliance, as seen through the increase in high-income returns filed compared to previous years. Additionally, the Central Board of Direct Taxes (CBDT) recently extended the filing deadline for certain taxpayers, underscoring the government’s effort to support timely and accurate tax compliance.

This report explores:

1. The breakdown of high-income taxpayers in the fiscal year 2024-25.
2. Comparisons with filing patterns from five years ago.
3. Broader economic implications, and
4. The recent deadline extension by the CBDT to facilitate compliance.

1. High-Income Taxpayer Analysis

Taxpayers with Annual Income of ₹1 Crore and Above

A significant portion of income tax returns filed in India came from individuals with an annual income of ₹1 crore and above:

• Total Filings: By October 31, 2024, over 9.54 lakh individuals with income exceeding ₹1 crore had filed their returns. This is a substantial rise, reflecting both economic growth and a more robust tax compliance regime.
• Monthly Data Trend: The data shows a progressive increase each month:
  • July: 2,08,284 returns filed
  • August: 2,15,586 returns filed
  • September: 2,38,472 returns filed
  • October: 2,76,872 returns filed (highest monthly count to date)
• Five-Year Comparison: In 2019, the total number of taxpayers in this income bracket was only 2.89 lakh. The more than threefold increase to 9.54 lakh demonstrates a significant expansion in this high-income category.

Taxpayers with Annual Income of ₹10 Crore and Above

For the ultra-high-income group with annual incomes exceeding ₹10 crore:

• Total Filings by October 31, 2024: A total of 26,449 taxpayers declared income in this bracket.
• Monthly Breakdown: A gradual increase in filings is noted, with a major uptick closer to the tax deadline:
  • April: 51
  • May: 93
  • June: 282
  • July: 5,582
  • August: 5,812
  • September: 6,565
  • October: 8,064 (highest for the fiscal year)
• This upward trend suggests both higher tax compliance and possible increases in ultra-high-income earnings.

2. Broader Trends in Income Tax Compliance

The total number of tax returns filed for 2024-25 reached 8.11 crore, with 7.97 crore returns verified. This high verification rate highlights the efficiency and effectiveness of the Income Tax Department’s digital infrastructure. Compared to previous years, there is a visible increase in overall compliance, with many new filers joining the tax base and higher-income individuals consistently filing returns.

3. Economic Implications of High-Income Taxpayer Growth

The increase in high-income tax filings has significant economic implications:

• Revenue Generation: A growing number of high-income taxpayers directly contributes to the government’s revenue, enabling greater spending on infrastructure, healthcare, and welfare.
• Progressive Taxation: India’s progressive tax system imposes higher tax rates on higher incomes, which helps redistribute wealth and reduce income inequality.
• Economic Formalization: The trend of rising compliance and transparency aligns with the government’s digitalization efforts and tax reforms, encouraging a more formal economic system where income declaration is standardized and monitored.

4. Extension of Income Tax Filing Deadline by CBDT

The Central Board of Direct Taxes (CBDT), acknowledging the importance of facilitating smooth tax compliance, recently extended the filing deadline under Section 139(1) of the Income Tax Act, 1961:

• New Deadline: The due date for filing income tax returns for assessment year 2024-25 has been moved from October 31 to November 15, 2024.
• Applicable Section: This extension applies to clause (a) of Explanation 2 to sub-section (1) of Section 139, covering individuals, Hindu Undivided Families (HUFs), and certain other entities.
• Purpose: The extension was aimed at easing the compliance process, reducing last-minute filing pressure, and providing taxpayers with additional time to ensure accuracy in their filings.

Conclusion

The rise in high-income tax filings in India, along with CBDT’s proactive approach in extending filing deadlines, reflects a maturing tax system that aligns with India’s broader economic goals. By facilitating an environment that encourages compliance, the government is expanding its tax base, securing revenue for public spending, and fostering a more formalized economy. The substantial increase in crorepati taxpayers also highlights India’s economic potential, with wealthier segments increasingly contributing their share towards the country’s development.