Tax-Free Income Up to Rs 8 Lakh Could Propel ITR Filings to 9 Crore by 2025 - Read Now

Government tax exemption on income up to Rs 8 lakh could help ITR filings reach 9 crore by March 2025. A tax-free limit would particularly benefit senior citizens and further simplify TDS deductions, as SBI report suggests.

By Aayushi Dubey Oct 26, 2024, 10:08 IST

With the increase in ITR filings in India, the government may even consider allowing tax exemptions up to Rs 8 lakh. This might increase ITR filings in India to 9 crore by March 2025. According to a report from the SBI Economic Department, such a tax exemption will lead to a flurry of filings, primarily among senior citizens.

Growing ITR Filings in India: Relevant Statistics
Around 7.3 crore ITRs have been filed till date in the ongoing fiscal year, and it is expected to cross 9 crores by the end of the financial year. In the assessment year 2022-23, 7.3 crore ITRs were filed in India, and in the case of assessment year 2023-24, it was 8.6 crores. According to the report, if income up to Rs 8 lakh is exempted from tax, this can easily go above 10 crore in the following fiscal year.

The following are proposed income tax benefits for the seniors:
The analysis of SBI found that this income tax exemption would mainly benefit senior citizens between 60 and 80 years of age, thereby increasing the ITR filing among them. It would also decrease the tax burden for millions of senior citizens while encouraging them to file their taxes regularly. According to the report, if the government focuses on tax incentives, the ITRs could rise by quite a margin.

It should reduce TDS and also make the forms easy to fill
The SBI report has recommended that the government must revisit TDS parameters as well as simplify TDS certificates for easy tax filing. Now, the tax department has already streamlined ITR forms and further tweaks will ensure even higher filings on time. With simplification of TDS process, greater numbers of taxpayers will file returns in time and good taxpayer compliance will be ensured.

The proposed tax-free limit on income up to Rs 8 lakh and further TDS adjustments could easily make the tax system in India much more accessible for its citizens, thereby leading directly to economic stability and growth. If actually made, this will make an enormous difference in the rise of taxpayer participation and how streamlined India's tax filing infrastructure would become.

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