56% in 8 years: Rise of average gross income of individual IT filers

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The average gross total income of individual taxpayers rose 56% to touch Rs 7 lakh in assessment year (AY) 2021-22 from Rs 4.5 lakh in AY 2013-14, said Central Board of Direct Taxes (CBDT) as it shared data crunched from ITRs on 26 October. CBDT officials also pointed out that while the top 1% individual taxpayers reported 42% rise in their average gross total income, the bottom 25% witnessed a rise of 58% in the same time period. The contribution of the gross total income of the top 1% individual taxpayers as a share of all individual taxpayers came down from 15.9% in AY 2013-14 to 14.6% in AY 2021-22. The “data is clearly indicative of a robust growth in the gross total income of individuals across different income groups subsequent to AY 2013-14. The overall impact has been reflected in an increase in net direct tax collections from Rs 6.38 lakh crore in FY 2013-14 to Rs 16.61 lakh crore in FY 2022-23,” the CBDT said. Reeling out more data, the apex direct tax board said the number of ITRs filed by individuals in the income brackets Rs 5-10 lakh and Rs 10-25 lakh increased by 295% and 291% respectively. The CBDT officials interpreted it as “…individual taxpayers showing a positive trend of migration to a higher range of gross total income.” On the subject of widening of tax base it was observed that the ITRs individual taxpayers rose 90% in eight years to 6.37 crore in AY 2021-22. During the ongoing financial year, a total of 7.41 crore returns have been filed for AY 2023-24 till date. This number includes 53 lakh first-time income tax filers. “This is an indication of the widening of the tax base subsequent to various reform measures put in place by the department,” the board said. The problem of nil ITRs, however, continues to plague the government. In the last week of July this year, it was reported that out of the record 7.4 crore ITRs filed for FY23, a whopping 70% (or 5.12 crore) of those were zero-tax ITRs, or individuals who did not have a taxable return. This data was placed by the finance ministry at the Parliament.