India Tax Returns 2025: Number of Income Taxpayers

Key Highlights

• Over 86 million income tax returns (ITRs) were filed in the assessment year 2024 in India.
• The number is estimated to increase to over 91 million in the year 2025.
• The new tax regime will be the default tax regime from assessment year 2025-26.
• The number of income taxpayers has more than doubled since 2014.
• Union Budget 2024 introduced changes in the new tax regime to make it more beneficial for taxpayers.

Introduction

The number of income tax returns filed in India shows how well the country is collecting taxes. The Central Government of India wants to grow the tax base and make the tax system simpler with a new tax regime. In the Union Budget 2024, the government made changes to the new tax regime to help taxpayers more. Let’s see what the expected number of income taxpayers will be in 2025 and the planned changes in the new tax regime for the financial year 2024-25.

Salaried Individuals for AY 2025-26

The assessment year 2025-26 is for income earned from 1st April 2024 to 31st March 2025. Salaried individuals need to file their income tax returns by 31st July 2025. It is important to file tax returns on time. This will help individuals avoid penalties and legal issues.

A salaried person should know the right ITR form to use. They also need to understand how to calculate income tax, the tax slabs that apply, and how to claim deductions and exemptions. Filing ITRs is now simple and easy thanks to online platforms.

Forms Applicable

It is very important to choose the right Income Tax Return (ITR) form. The form you pick will depend on your income source, where you live, and your total income earned. If you file the wrong ITR form, your tax returns could be seen as defective or invalid.

Salaried people can select from four tax forms: ITR 1, ITR 2, ITR 3, and ITR 4 (SUGAM). This choice depends on their income sources, whether they earn income from a business or profession, and if they want to use the new tax regime. The assessment year 2025-26 will be the first year when the new tax regime is the default tax regime for all taxpayers.

People need to make sure they meet the eligibility requirements for the income tax form before filing their tax returns.

Tax Slabs for AY 2025-26

For the assessment year 2025-26, taxpayers in India should look for new tax slabs. These slabs decide how much tax people pay based on their income. It is important to understand these slabs for good tax planning and to follow the Income Tax Act. Taxpayers need to keep up with any changes from the Central Government about the tax regime to figure out their tax liability correctly. By tracking the tax slabs, taxpayers can improve their tax returns. Stay informed about the latest tax laws to handle your finances well.

Investments / Payments / Incomes on which I can get tax benefit

Tax deductions help lower your taxable income. This means you will pay less tax overall. It is important for people to use all tax deductions that they can. The old tax regime has more tax deductions available than the new tax regime.

Here are some payments, investments, and incomes that you can claim tax deductions on under the old tax regime:

• Life Insurance premium (Section 80C)
• Tuition Fees (Section 80C)
• Home loan principal repayment (Section 80C)
• Contribution towards National Pension Scheme (Section 80CCD(1B)

Remember, you can only claim these tax deductions if you choose the old tax regime. To choose wisely between the old and new tax regimes, consider your income and investments.

Following deductions will be available to a taxpayer opting for the New Tax Regime u/s 115BAC:

Deductions for taxpayers using the new tax regime under section 115BAC include the standard deduction, house rent allowance, and deductions from specific sections. This includes section 80C for certain investments, section 80D for medical insurance, and section 80G for donations. These deductions are very important. They help lower taxable income and reduce the tax liability for people in the new tax regime. Taxpayers can use these deductions to save more money and improve their tax planning. This aligns with the rules in the Income Tax Act.

Income tax slab and rates for FY 2024-25 (AY 2025-26) after budget 2024

The budget for 2024 has brought changes to the income tax slab and rates for FY 2024-25 (AY 2025-26). These changes are important for taxpayers because they affect the amount of income tax based on total income. It is essential to understand these revised tax slabs to calculate taxes correctly. The updates in tax rates show adjustments by the government to match the changing financial situation. Taxpayers must stay updated about these changes to meet their tax obligations in the right way.

Raising the 30% tax slab threshold

Before, in the new tax regime, income above ₹ 10 lakhs was taxed at the top rate of 30%. Now, starting from the assessment year 2024-25, this highest tax slab will apply to income over ₹ 15 lakhs. This is good news as it will lower the tax burden for middle-income earners.

Raising the 30% tax slab limit is an important update in the direct tax system. By increasing the income amount for this top tax slab, the government wants to make taxes simpler, help the middle class, and encourage spending. This change may also get more people to choose the new tax regime.

The benefit of marginal relief from surcharge is still available when income goes over ₹ 50 lakhs, ₹ 1 crore, ₹ 2 crores, or ₹ 5 crores.

Enhancing tax brackets

The Union Budget 2024 changes the tax brackets in the new tax regime. The basic exemption limit will be raised to ₹ 3 lakhs. This change should help people in lower income groups.

With this increase, the government might also raise the tax exemption limit for some investments and payments under Section 80C. To encourage people to use electric vehicles, the government could extend the tax deduction on interest paid for loans taken to buy electric vehicles under Section 80EEB.

Still, this is only a guess. We will need to wait for the Finance Bill to see the exact changes planned.

Budget 2025 could consider:

The budget for 2025 may consider big changes in tax policies. These changes could include updating tax brackets or adding new deductions. This could affect how money flows in the economy. The government wants to support economic growth and fair tax distribution. They might look at current tax rules to see if changes are needed. This method fits with how income and economic needs change for taxpayers. By making helpful updates, the budget could simplify the tax process. This would encourage people and businesses to follow the rules and improve their financial stability.

Number of income taxpayers across India in assessment year 2024, by income range (in millions)

In the assessment year 2024, the number of income taxpayers in India changed in various income ranges, all shown in millions. This distribution revealed the different financial situations of taxpayers in the country. This information gives important insights into the taxpayer base and trends in income distribution. This is essential for understanding how well tax policies are working and how much people are following them. Knowing these figures helps in creating targeted tax strategies. This ensures that fair contributions come from all taxpayers, no matter their income level. Such analysis is vital for shaping future tax reforms and policies, creating a balanced and sustainable tax regime.

Other statistics on the topic Wages and salaries in India

In India, many numbers show the economy’s health. It’s not just about the income tax returns filed. We can also look at wages, salaries, job trends, and how income is shared. Having data on wages and salaries allows us to see income levels and wage gaps. This helps us understand how well workers are doing.

Also, this information is important for seeing how government rules affect wages, job markets, and income fairness. Policymakers, researchers, and companies need this data to make smart choices about income tax, job laws, and support programs.

Other statistics that may interest you Wages and salaries in India

Data on wages and salaries can show trends in different parts of the economy. It can also highlight differences based on location and people. For instance, wage and salary numbers might show if some industries or jobs are paying more than others. This information can help job seekers and investors find good opportunities.

Also, looking at wages and salaries from different states or regions in India can show economic gaps and differences in the cost of living. Knowing these details about wages and salaries across India is important for businesses. It helps them make smart decisions about paying their workers, hiring talent, and expanding into new markets.

Budget 2025-26 highlights: Key announcements and major changes

The Finance Minister will present the Union Budget for 2025-26 in February 2025. This budget will show the government’s plan for the next financial year. As usual, experts in the industry are guessing about possible changes to the income tax rules.

Some people think the budget will help connect the old and new tax regimes. It will be interesting to see what changes are announced to make the new tax regime better for taxpayers.

Budget 2025-26 highlights: Key announcements and major changes

Budget 2025-26 is expected to bring important tax changes and new policies. These changes could involve updates to tax rates, lower deductions, and incentives for certain industries. Since 2024 was the last full budget of the Narendra Modi government’s second term, everyone is focused on Budget 2025. This will be the first budget after the new government takes over.

A major concern for taxpayers in Budget 2025 is understanding the capital gains tax structure. People are excited and waiting to hear about long-term capital gains tax and how it fits with the government’s economic plans.

Reintroducing deductions

The new income tax regime has made taxes easier to understand. But it has cut down on the ways people can claim tax deductions. Because of this, many taxpayers are unsure about leaving the old tax regime. In the old system, they could get tax deductions for investments and specific expenses.

To encourage more people to adopt the new tax regime, the government could think about bringing back some tax deductions. For example, reintroducing deductions for investments in infrastructure bonds or contributions to social security could make the new system more attractive. This change would not only make the new tax regime better but also promote savings for national development.

Additionally, the government might want to raise the deduction limits under Section 80C to match the current cost of living. If they increase the deduction limit, it would give taxpayers some relief and boost their disposable income. This, in turn, could help stimulate economic growth.

Conclusion

In conclusion, it’s very important to understand income tax returns in India for good financial planning. The tax rules are changing, and new updates could happen soon. Staying up-to-date with the latest tax slabs, deductions, and investments can help you lower your tax costs. As we approach 2025, be proactive in using your tax benefits while following the rules. Pay attention to the newest budget news and tax changes. This will help you make smart choices that support your financial goals. Stay informed and ready. Use the tax-saving options available to build a stable financial future.

Frequently Asked Questions