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Finance Minister Sitharaman confirms the new Income Tax Bill, designed for simplification and reduced litigation, will be reviewed in the monsoon session of Parliament.

Income Tax Bill Set for Monsoon Parliament Review

The new Income Tax Bill, aiming for simplicity and reduced litigation with a nearly halved word count, will be reviewed in the upcoming monsoon session.

New income tax bill to be debated in monsoon parliament session

The upcoming monsoon session of Parliament will debate a streamlined Income Tax Bill designed to simplify existing laws and reduce litigation.

The new Income Tax Bill will be taken up for discussion in the monsoon session of Parliament, Finance Minister Nirmala Sitharaman said on Tuesday.
Replying to the discussions on the Finance Bill 2025 in the Lok Sabha, Sitharaman said the new income tax bill, which was introduced in the House on February 13, is currently being vetted by the Select Committee.
The Select Committee has been mandated to submit its report by the first day of the next session of Parliament.
"...we will take it (new income tax bill) up in the monsoon session," Sitharaman said.
The monsoon session of Parliament is usually convene in July and runs through August.
The simplified Income Tax Bill, which is half the size of the 1961 Income Tax Act, seeks to achieve tax certainty by minimising the scope of litigation and fresh interpretation, the Income Tax department had earlier said.
The new bill has a word count of 2.6 lakh, lower than 5.12 lakh in the I-T Act. The number of sections is 536 against 819 effective sections in the existing law.
The number of chapters has also been halved to 23 from 47.
The Income Tax Bill 2025 has 57 tables compared to 18 in the existing Act and removed 1,200 provisos and 900 explanations.

The Income Tax Bill 2025 maintains existing powers for digital access during search operations without expanding them, protecting taxpayer privacy.

Income Tax Bill 2025: Digital Access Clarified

Officials confirm the Income Tax Bill 2025 maintains existing parameters for digital access in tax operations, ensuring privacy protection.

The Income Tax Bill 2025 reaffirms existing digital access measures for search operations, maintaining taxpayer privacy.

The new Income Tax Bill prescribes the existing process for tax authorities to gain access to the digital space or a computer device only during search and survey operations, and it is not aimed to breach the online privacy of common taxpayers even if their case lands into scrutiny, a top I-T department official said Monday.
The powers for such a coercive action "already existed" in the 1961 Act, and these have only been reiterated in the Income Tax Bill of 2025, he said.
The official rejected claims made in some reports and opinion pieces that the tax authorities have been granted "additional" powers to breach the passwords of electronic records, including email, social media handles and Cloud storage space of the taxpayers.
"Such reports are nothing but fear mongering. The tax department is not into snooping of social media accounts or online activities of a taxpayer.
"These powers are only to be executed during the course of a search or survey operation, and that too when the assessee being searched or surveyed refuses to share the passwords for digital storage drives, emails, Clouds and communication platforms such as WhatsApp and Telegram, etc.," the officer told PTI.
Section 247 of the Income Tax Bill, 2025, which is before Parliament at present, prescribes an authorised officer to gain access by "over-riding" the access code of computer system or 'virtual digital space'.
The government has brought the new Bill in order to change the decades-old I-T Act of 1961 with an aim to make the bulky direct tax law simpler and easier for the taxpayers.
Under the existing law, Section 132 enables an authorised officer to require any person who is found in possession of books, accounts or other documents in the form of electronic record to afford facility to inspect such documents and also to seize such document (including electronic record as per Section 2(22AA) of Income Tax Act, 1961).
"Tax crimes and the methods of tax evasion have attained a new level of sophistication with the advent of smart Internet-based tools and technology," the official said.
Gaining access to digital devices and spaces during coercive actions like search and survey is vital to find evidence and these raids are limited when you see the data," a second official said.
The tax department conducts about 100-150 "full blown" searches and surveys in a financial year, and this enforcement action is not aimed towards the common taxpaying individual or entity.
Also, out of the about 8.79 crore income-tax returns (ITRs) filed annually, only about 1 per cent are selected for scrutiny, the official said.
"The provisions related to 'virtual digital space' are not applicable even to these cases under scrutiny. It is applied only during the process of a search or survey and not even before this action is mounted.
"The tax department does not snoop or make a back door entry against any individual or entity through their social media accounts," the first official said.
As per officials in the tax department, gathering evidence from digital accounts is not only "essential" to prove tax evasion before a court of law, but also for computing the exact amount of tax evaded.
During search and seizure operations, it has been found in some cases that the person in control of books, documents and records, etc., does not cooperate with the proceedings or provide necessary facilities to access the evidence.
In this digital and e-enabled world, information is stored in servers and storage facilities abroad, which are not accessible from India and the access code is not provided by the person concerned.
In such circumstances, the entire exercise of search and seizure gets redundant and can result in the tax evader going scot-free, officials said.

 This proposed legislation aims to replace the longstanding Income Tax Act of 1961 with a more streamlined and modern set of laws. 

India's Income Tax Bill 2025 Unveiled

India's Income Tax Bill 2025: a step towards tax reform

This proposed legislation aims to replace the longstanding Income Tax Act of 1961 with a more streamlined and modern set of laws.

Finance Minister Nirmala Sitharaman has tabled the Income Tax Bill 2025 in the Lok Sabha, marking a significant step toward overhauling India's tax framework. This proposed legislation aims to replace the longstanding Income Tax Act of 1961 with a more streamlined and modern set of laws. Now, the bill heads to a Select Committee for further scrutiny.
The proposed Income Tax Act 2025 is scheduled for implementation in April 2026 and seeks to simplify India&rsquo;s taxation landscape by consolidating and amending existing laws. This move is expected to reduce litigation and enhance compliance by removing outdated sections from the current tax code.
The bill introduces several changes, including revisions to deductions for investments, donations, and specific expenses previously covered under Sections 10 and 80C to 80U of the 1961 Act. The new provisions, outlined under Clauses 11 to 154, are designed to support startups, digital enterprises, and renewable energy investments, aligning the tax code with today&rsquo;s economic realities.
For the bill to become law, it must pass through several stages. After evaluation by the Select Committee and receiving government and cabinet approval, it will return to Parliament for final passage. Only then will its rollout timeline be decided.
While this development sets the stage for a comprehensive tax reform, further discussions and recommendations from the Select Committee and the cabinet are anticipated in the coming months.

FM Nirmala Sitharaman presented the Union Budget 2025-26, focusing on economic recovery, defense modernization, and inclusive growth. Highlights include income tax relief for middle-class taxpayers, Rs 6.81 lakh crore allocated to defense and more.

Budget 2025 key announcements: Income tax relief, defence boost, and infrastructure investments

FM Nirmala Sitharaman presented the Union Budget 2025-26, focusing on economic recovery, defense modernization, and inclusive growth. Highlights include income tax relief for middle-class taxpayers, Rs 6.81 lakh crore allocated to defense and more.

The Union Budget 2025 has been unveiled, outlining a strategic roadmap for India&rsquo;s growth, fiscal stability, and social development. Finance Minister Nirmala Sitharaman delivered the budget speech in Parliament on February 1, 2025, at 11 a.m.
The government has introduced several key initiatives aimed at accelerating economic recovery post-pandemic, promoting inclusive growth, and enhancing India&rsquo;s global competitiveness.
Here&rsquo;s a breakdown of the major announcements, including changes to income tax rates, capital expenditures, new infrastructure projects, and plans for agriculture and defense spending:
<h3> Income Tax Relief for Middle Class </h3>
In her Union Budget 2025 speech, Finance Minister Nirmala Sitharaman announced that individuals earning up to Rs 12 lakh annually will be exempt from paying income tax.
For salaried taxpayers, the exemption limit rises to Rs 12.75 lakh with a standard deduction of Rs 75,000. The Finance Minister also highlighted the simplification of the new income tax regime, aiming to provide greater relief to the middle class....<a href="https://www.editorji.com/business-news/budget-2025-no-income-tax-payable-up-to-rs-12-lakh-under-new-regime-says-fm-nirmala-sitharaman-1738392726418" target="_blank">Read More</a>
<h3> Prioritizing growth, inclusivity, and economic strengthening</h3>
Finance Minister Nirmala Sitharaman presented the Union Budget for 2025-26, focusing on economic growth, inclusive development, and supporting industries. The budget also aimed to boost the purchasing power of India's growing middle class...<a href="https://www.editorji.com/business-news/union-budget-2025-26-prioritizing-growth-inclusivity-and-economic-strengthening-1738389779640" target="_blank">Read more</a>
&nbsp;
<h3>&nbsp;</h3>
<h3>Rs 6.81 Lakh Crore Allocated to Defence&nbsp;</h3>
The Union Budget for 2025-26 has earmarked Rs 6.81 lakh crore for the Ministry of Defence, underscoring the government's focus on modernizing the Armed Forces and aligning with the 'Viksit Bharat @2047' vision.
This allocation, marking a 9.53% increase from the previous year, represents 13.45% of the total Union Budget, the highest among all ministries...<a href="https://www.editorji.com/business-news/budget-2025-government-allocates-rs-6-81-lakh-crore-to-defence-ministry-1738408291086" target="_blank">Read more</a>
<h3>&nbsp;</h3>
&nbsp;
<h3>Rs 11.21 Lakh Crore Allocated for Capital Expenditure in Budget 2025-26; Railways and Roads Remain Unchanged</h3>
Nirmala Sitharaman has allocated Rs 11.21 lakh crore for capital expenditure (capex), reflecting a 0.9% increase from last year's Budget Estimate of Rs 11.11 lakh crore. This allocation is significantly higher when compared to the revised estimate of Rs 10.18 lakh crore for 2024-25. The defence sector received the largest hike in capex, with an increase of 4.6%, totaling Rs 1.8 lakh crore.&nbsp;
The capital outlays for Railways and Roads remain unchanged, at Rs 2.52 lakh crore and Rs 2.72 lakh crore, respectively...<a href="https://www.editorji.com/business-news/budget-2025-rs-11-21-lakh-crore-allocated-for-capital-expenditure-0-9-increase-from-2024-25-1738417607194" target="_blank">Read more</a>
&nbsp;
&nbsp;
<h3>Enhancement to Kisan Credit Card Scheme and Micro-Enterprise Credit Cards</h3>
Finance Minister Nirmala Sitharaman has announced a significant increase in the Kisan Credit Card (KCC) interest subvention limit, raising it from Rs 3 lakh to Rs 5 lakh. In addition, the government will introduce customized credit cards for micro-enterprises with a Rs 5 lakh limit.
These changes aim to simplify credit access, benefiting 7.7 crore farmers, fishermen, and dairy farmers...<a href="https://www.editorji.com/business-news/budget-2025-fm-announces-raising-of-kisan-credit-cards-interest-subvention-limit-to-rs-5-lakh-1738390601203" target="_blank">Read more</a>
<h3> Modified UDAN Scheme to Boost Regional Connectivity</h3>
A modified UDAN scheme announced to enhance regional connectivity by adding 120 new destinations and accommodating 4 crore more passengers, with a focus on developing helipads and smaller airports in remote and northeastern areas...<a href="https://www.editorji.com/business-news/budget-2025-fm-sitharaman-introduces-modified-udan-scheme-to-expand-regional-connectivity-1738400220377" target="_blank">Read more</a>
<h3> PM Dhan Dhanya Krishi Yojana to Boost Agricultural Productivity</h3>
The Union government has introduced the PM Dhan Dhanya Krishi Yojana, targeting 100 low-productivity districts with limited credit access. The initiative aims to enhance rural prosperity by integrating existing agricultural programs with customized solutions. The scheme will be executed in collaboration with state governments...<a href="https://www.editorji.com/business-news/budget-2025-govt-launches-pm-dhan-dhanya-krishi-yojana-to-benefit-1-7-crore-farmers-1738391172060" target="_blank">Read more</a>
<h3> Makhana Board for Bihar</h3>
In her Budget speech, Finance Minister Nirmala Sitharaman proposed the creation of a Makhana Board in Bihar to further promote the state's significant production of foxnuts. Makhana has benefited from the One District One Product scheme, and with its GI tag and the establishment of the Makhana Research Center, the proposal aims to boost its national recognition and market presence...<a href="https://www.editorji.com/business-news/budget-2025-fm-sitharaman-proposes-makhana-board-for-bihar-s-growth-1738391842639" target="_blank">Read more</a>
<h3> Boost to India's startup ecosystem</h3>
Finance Minister Nirmala Sitharaman introduced a new Fund of Funds worth Rs 10,000 crore to further boost India's startup ecosystem. This follows the success of the existing Fund of Funds for Startups (FFS) scheme, which has already garnered over Rs 91,000 crore in commitments...<a href="https://www.editorji.com/business-news/budget-2025-rs-10-000-crore-fund-of-funds-for-startups-announced-1738399225690" target="_blank">Read more</a>
<h3> Enhanced Support for MSMEs</h3>
Finance Minister announced an increased investment and turnover limits for MSMEs in the Union Budget 2025, aiming to boost the sector. Additionally, she introduced customized credit cards with a Rs 5 lakh limit for micro-enterprises registered on the Udyam portal...<a href="https://www.editorji.com/business-news/budget-2025-finance-minister-sitharaman-announces-support-measures-for-msmes-1738400877749" target="_blank">Read more</a>
<h3> Budget 2025 Expands Lifesaving Drug Exemptions</h3>
In the Union Budget 2025-26, Finance Minister Nirmala Sitharaman expanded the list of lifesaving drugs exempt from Basic Customs Duty (BCD). This move includes 36 additional drugs for cancer, rare diseases, and other critical ailments, making essential treatments more affordable for patients in need...<a href="https://www.editorji.com/business-news/budget-2025-fm-expands-custom-duty-exemptions-on-lifesaving-drugs-1738403632739" target="_blank">Read more</a>
<h3> Budget 2025 Boosts Social Security for Gig Workers</h3>
Finance Minister Nirmala Sitharaman announced initiatives to provide social security for gig workers, including identity cards and healthcare access. The plan includes registering gig workers on the e-Shram portal and revamping the PM SVANidhi scheme to invest in street vendors and online workers...<a href="https://www.editorji.com/business-news/budget-2025-fm-announces-id-cards-for-gig-workers-upi-credit-cards-for-street-vendors-1738406585002" target="_blank">Read more</a>
<h3> Mission for Aatmanirbharta in Pulses</h3>
The government has launched a six-year "Mission for Aatmanirbharta in Pulses" to enhance self-reliance in pulses, focusing on increasing the production of tur, urad, and masoor pulses, reducing India's reliance on imports...<a href="https://www.editorji.com/business-news/budget-2025-government-launches-six-year-pulses-mission-for-self-reliance-1738402893545" target="_blank">Read more</a>
<h3> Government&rsquo;s Plan to Boost Tourism&nbsp;</h3>
Finance Minister unveiled a plan to develop India&rsquo;s top 50 tourist destinations through collaboration with state authorities, focusing on infrastructure growth and land allocation for tourism development...<a href="https://www.editorji.com/business-news/budget-2025-government-to-boost-development-of-50-key-tourist-destinations-1738402383730" target="_blank">Read more</a>
<h3> Increased TDS Threshold on Rent for Taxpayers</h3>
Increase in the Tax Deduction at Source (TDS) threshold announced on rent from Rs 2.40 lakh to Rs 6 lakh annually, reducing TDS transactions and easing compliance for small taxpayers...<a href="https://www.editorji.com/business-news/budget-2025-annual-limit-on-tds-on-rent-raised-to-rs-6-lakh-1738401619044" target="_blank">Read more</a>
<h3> FDI Limit in Insurance Sector Raised to 100%</h3>
Government announced a significant change by increasing the Foreign Direct Investment (FDI) limit in the insurance sector from 74% to 100%, with conditions that require companies to invest the entire premium in India...<a href="https://www.editorji.com/business-news/budget-2025-insurance-sector-s-fdi-limit-increased-to-100-1738399706113" target="_blank">Read more</a>
<h3> Nuclear Energy Mission for Clean Transition</h3>
Finance Minister Nirmala Sitharaman introduced a Nuclear Energy Mission in the Union Budget 2025, aiming to develop 100 GW of nuclear energy by 2047, supporting India&rsquo;s goal of becoming a developed nation under the "Viksit Bharat" initiative...<a href="https://www.editorji.com/business-news/budget-2025-india-targets-100-gw-nuclear-energy-by-2047-1738398711566" target="_blank">Read more</a>
&nbsp;
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ALSO READ: <a href="https://www.editorji.com/business-news/budget-2025-finance-minister-nirmala-sitharaman-sets-record-with-eighth-consecutive-budget-speech-1738413002437" target="_blank">Finance Minister Nirmala Sitharaman sets record with eighth consecutive budget speech</a>

Benchmark indices Sensex and Nifty closed flat after a volatile session as investors reacted to Finance Minister Nirmala Sitharaman’s Union Budget 2025, with mixed views on tax relief and sectoral performance. 

Sensex, Nifty end flat in highly volatile trade on Budget day

Benchmark indices Sensex and Nifty closed flat after a volatile session as investors reacted to Finance Minister Nirmala Sitharaman&rsquo;s Union Budget 2025, with mixed views on tax relief and sectoral performance.&nbsp;

Benchmark indices Sensex and Nifty ended flat in a special trading session on Saturday as investors saw little coming in from the Finance Minister Nirmala Sitharaman for retail investors and the overall markets in the Union Budget.
But, buying in consumption-related sectors after Sitharaman exempted annual income of up to Rs 12 lakh from income tax and rejigged tax slabs as part of her reformist Budget prevented any major fall in the markets.
The markets were open on Saturday due to the presentation of the Union Budget.
In a day market with heavy volatility, the 30-share BSE benchmark Sensex eked out a marginal gain of 5.39 points or 0.01 per cent to settle at 77,505.96. During the day, it hit a high of 77,899.05 and a low of 77,006.47, gyrating 892.58 points.
The NSE Nifty dipped 26.25 points or 0.11 per cent to settle at 23,482.15. Intra-day, the benchmark scaled a high of 23,632.45 and a low of 23,318.30.
Markets were rallying for the past four days.
"The market has responded to the Union budget with a mixed view, primarily due to the modest 10 per cent YoY increase in capex for FY26, falling short of expectations. Sectors like railways, defense, and infra are affected on which the market relies for the performance, dampening the sentiment," Vinod Nair, Head of Research, Geojit Financial Services, said.
On the other hand, Nair said, consumption-based sectors, which are expected to benefit the most, had a low effect on the broad market due to their modest market mix position.
"While the Budget failed to cheer the markets, sectoral stocks from consumer durables, FMCG, and automobile space attracted significant buying interest after the government announced major income tax relief for the salaried class.
With salaried income up to Rs 12 lakh per annum exempted from any tax, consumption is expected to get a major boost which is reflected positively across most of the consumption-related sectors," Prashanth Tapse, Senior VP (Research), Mehta Equities Ltd, said.
In a relief to the middle class, Sitharaman exempted annual income of up to Rs 12 lakh from income tax and rejigged tax slabs as part of her reformist Budget.
Presenting her eighth straight Budget in the Lok Sabha, Sitharaman laid out a blueprint for next generation reforms including raising FDI limit in insurance sector, simplification of tax laws, cutting duties on intermediaries while providing enhanced fiscal support for welfare measures.
This she did while sticking to the fiscal consolidation roadmap that projected the fiscal deficit to come down to 4.4 per cent of the GDP in the financial year 2025-26.
For the current financial year fiscal deficit has been pegged at 4.8 per cent of GDP.
"The Union Budget largely played to our expectations, particularly with the much-needed income tax relief for the middle class, which will drive consumption and economic growth. No changes were made to Securities Transaction Tax or capital gains tax, as anticipated," Pranav Haridasan, MD and CEO, Axis Securities, said.
From the 30-share blue-chip pack, Zomato surged over 7 per cent. Maruti, ITC Hotels, ITC, Mahindra &amp; Mahindra, Asian Paints, Titan and IndusInd Bank were among the biggest gainers.
Power Grid, Larsen &amp; Toubro, NTPC, UltraTech Cement, HCL Tech, Tech Mahindra, Infosys and Adani Ports were among the laggards.
"While the markets might have anticipated a more relaxed fiscal approach, the current stance is satisfactory. Overall, the budget is well-received, incorporating numerous reforms aimed at increasing farm incomes and supporting farmers. There are also considerable measures in place to assist MSMEs and to boost exports, making this a well-rounded budget that addresses the diverse needs of the populace," Vikas Khemani, Founder, Carnelian Asset Management &amp; Advisors, said.
Asian markets are closed on Saturday due to holidays. European markets were also closed.
US markets ended lower on Friday.
According to Vishal Kampani - Vice Chairman and Managing Director, JM Financial Ltd, the budget has touched upon all key elements to accelerate economic growth. It has successfully managed to strike a balance among the trinity &ndash; offering fiscal stimulus to consumption, maintaining the fiscal glide path and undertaking reforms to boost growth.
"All in all, it is a growth-focused budget which will boost all the growth levers &ndash; manufacturing, access to credit, exports, employment generation, innovation and technology development, sustainability, etc. which will have a multiplier impact on the economy," Kampani said.
Foreign Institutional Investors (FIIs) offloaded equities worth Rs 1,188.99 crore on Friday, according to exchange data.
Global oil benchmark Brent crude dipped 0.29 per cent to USD 76.67 a barrel.
Rallying for the fourth day running on Friday, the 30-share BSE benchmark ended 740.76 points or 0.97 per cent higher at 77,500.57. The Nifty rallied 258.90 points or 1.11 per cent to 23,508.40.

In her Union Budget 2025 speech, Finance Minister Nirmala Sitharaman announced that taxpayers earning up to Rs 12 lakh will be exempt from income tax under the new tax regime.

Budget 2025: No income tax payable up to Rs 12 lakh under new regime: FM Nirmala Sitharaman

In her Union Budget 2025 speech, Finance Minister Nirmala Sitharaman announced that taxpayers earning up to Rs 12 lakh will be exempt from income tax under the new tax regime.
&nbsp;

During her Union Budget 2025 speech, Finance Minister Nirmala Sitharaman announced that individuals with an annual income up to Rs 12 lakh will be exempt from paying income tax, offering significant relief, particularly to the middle class.&nbsp;
&nbsp;
<blockquote class="twitter-tweet" data-media-max-width="560">
<a href="https://twitter.com/hashtag/UnionBudget2025?src=hash&amp;ref_src=twsrc%5Etfw">#UnionBudget2025</a> | Finance Minister Nirmala Sitharaman says, " I am now happy to announce that there will be no income tax up to an income of Rs 12 lakhs." <a href="https://t.co/rDUEulG3b9">pic.twitter.com/rDUEulG3b9</a>
&mdash; ANI (@ANI) <a href="https://twitter.com/ANI/status/1885580146742288461?ref_src=twsrc%5Etfw">February 1, 2025</a></blockquote>
&nbsp;
&nbsp;
This exemption limit increases to Rs 12.75 lakh for salaried taxpayers, accounting for a standard deduction of Rs 75,000. She also emphasized that the new income tax regime will be simplified, with a special focus on benefiting the middle class.&nbsp;
However, to claim this benefit, taxpayers must avail themselves of relief under various sections of the Income Tax Act, such as the Rs 1.5 lakh exemption under Section 80CCC or for paying interest on home loans.
&nbsp;
<blockquote class="twitter-tweet" data-media-max-width="560">
<a href="https://twitter.com/hashtag/UnionBudget2025?src=hash&amp;ref_src=twsrc%5Etfw">#UnionBudget2025</a> | Finance Minister Nirmala Sitharaman says, " I am now happy to announce that there will be no income tax up to an income of Rs 12 lakhs." <a href="https://t.co/rDUEulG3b9">pic.twitter.com/rDUEulG3b9</a>
&mdash; ANI (@ANI) <a href="https://twitter.com/ANI/status/1885580146742288461?ref_src=twsrc%5Etfw">February 1, 2025</a></blockquote>
&nbsp;
&nbsp;
Sitharaman said, "To taxpayers up to Rs 12 lakh of normal income (other than special rate income such as capital gains), tax rebate is being provided in addition to the benefit due to slab rate reduction in such a manner that there is no tax payable by them."
The Finance Minister&rsquo;s announcement, a major relief for the middle class, was met with loud applause from the treasury benches, led by Prime Minister Narendra Modi. Sitharaman further announced changes to the income tax slabs and rates across the board to ensure a more progressive taxation system.&nbsp;
She said, "Slabs and rates are being changed across the board to benefit all taxpayers. The new structure will substantially reduce the taxes of the middle class and leave more money in their hands, boosting household consumption, savings and investment."
The tax slabs and rates are as follows:
<ul>
<li>0-4 lakh rupees: Nil</li>
<li>4-8 lakh rupees: 5%</li>
<li>8-12 lakh rupees: 10%</li>
<li>12-16 lakh rupees: 15%</li>
<li>16-20 lakh rupees: 20%</li>
<li>20-24 lakh rupees: 25%</li>
<li>Above 24 lakh rupees: 30%</li>
</ul>
Under the new tax slabs, income up to Rs 4 lakh will be tax-free, a hike from the previous Rs 3 lakh.
<img src="https://cdn.editorji.com/679dd0f798c2f_1738395895.jpg" width="490" height="576">
A taxpayer earning Rs 12 lakh annually will benefit from Rs 80,000 in tax savings, while someone earning Rs 18 lakh will benefit by Rs 70,000. A person earning Rs 25 lakh will see a tax benefit of Rs 1.10 lakh under the new slabs.
Sitharaman illustrated the tax benefits with examples, saying, "The total tax benefit of slab rate changes and rebate at different income levels can be illustrated with a few examples. A taxpayer in the new regime with an income of Rs 12 lakh will get a benefit of Rs 80,000 in tax, which is 100% of tax payable as per the existing rates. A person with an income of Rs 18 lakh will get a benefit of Rs 70,000 in tax, which is 30% of tax payable as per existing rates. A person with an income of Rs 25 lakh will get a benefit of Rs 1.10 lakh, which is 25% of tax payable as per existing rates."
As a result of these proposals, the government expects to forgo about Rs 1 lakh crore in direct taxes and Rs 2,600 crore in indirect taxes.
Following the announcement, the Lok Sabha was adjourned by Speaker Om Birla. The House will now reconvene on February 3 at 11 a.m.

High earners are playing an increasingly crucial role in India's personal income tax collections, with their contribution growing nearly 4X in the past decade. Latest data shows a sharp rise in the number of individuals earning ₹50 lakh + filing ITR.

India’s Income Tax Surge: Contribution from ₹50 Lakh+ Earners Soars

High earners are playing an increasingly crucial role in India's personal income tax collections, with their contribution growing nearly fourfold in the past decade. Latest data shows a sharp rise in the number of individuals earning over ₹50 lakh filing ITR.

The contribution of high earners towards India&rsquo;s personal income tax mop-up is rising at a fast pace. According to the latest income tax return (ITR) filing data, the number of individuals reporting annual income of over Rs 50 lakh has jumped from 1.85 lakh in FY14 to over 9.39 lakh in FY24&mdash;a five-fold surge in just a decade.
This stellar surge is not limited only to the number of high earners; their contribution towards the government&rsquo;s income tax revenue has also seen rapid growth. From Rs 2.52 lakh crore in 2014, it has increased to Rs 9.62 lakh crore in 2024, marking nearly a fourfold increase.
According to media reports citing sources, 76 per cent of income tax collected in FY24 came from those earning above Rs 50 lakh per annum. This surge, as per the source quoted in these reports, is attributed to "strong anti-tax evasion and black money laws implemented by the Modi government."
Participative Tax Administration
A Mint report quotes an unnamed source who believes the change in the government&rsquo;s approach towards tax collection has driven this revenue surge. The person said that &ldquo;earlier the focus was more on enforcement, but today the focus is on sharing of information, and through sharing of information, nudging people towards compliance.&rdquo; They added that the tax department&rsquo;s work is now characterised as &lsquo;participative tax administration,&rsquo; rather than enforcement.
Lower Tax Burden on the Middle Class
While the income tax contribution from high earners has increased significantly over the last ten years, the share of taxes paid by the lower and middle class has notably decreased. The latest income tax data shows the share of tax collected from individuals earning less than Rs 10 lakh has dropped from over 10% to 6.22% over the past decade.
Also Watch: <a href="https://www.editorji.com/business-news/us-retail-inflation-surges-by-2-6-what-this-means-for-fed-rate-cuts-1731563791531">US Retail Inflation Surges By 2.6%: What This Means for Fed Rate Cuts</a>

TCS employees received tax notices due to TDS discrepancies, with demands up to ₹1.5 lakh. TCS advises waiting for rectification, as the issue may stem from a tax authority error. Experts expect the notices to be quashed soon.

TCS Employees Receive Tax Demands—What Went Wrong? Here’s the Real Story

TCS employees received tax notices due to TDS discrepancies, with demands up to ₹1.5 lakh. TCS advises waiting for rectification, as the issue may stem from a tax authority error. Experts expect the notices to be quashed soon.

TCS employees are in for a shock! Many of them have received tax demand notices from the Income Tax Department, asking for payments ranging from ₹50,000 to ₹1.5 lakh. But before you panic, here&rsquo;s what&rsquo;s really going on!
India&rsquo;s largest IT services company, Tata Consultancy Services or TCS, has confirmed that some of their employees have received these notices due to discrepancies in their TDS claims. But don&rsquo;t worry, says TCS!
The IT major has sent an internal mail to employees saying there&rsquo;s no need to pay the demanded amounts right now. They believe the tax authorities made a mistake, and employees should expect rectification notices soon.
The issue seems to stem from a TDS mismatch&mdash;this happens when there&rsquo;s a difference between the TDS reflected in Form 26AS and the amount claimed in the return. Experts say these notices are often automated and can be corrected by the tax department itself.
Let's see how soon this issue gets resolved!
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In the 2023 Budget, the finance minister introduced a standard deduction of 50,000 rupees for salaried taxpayers and pensioners under the new regime, which became the default unless opted out

Budget 2024: FM may raise Standard Deduction under New Tax Regime, say reports 

In the 2023 Budget, the finance minister introduced a standard deduction of 50,000 rupees for salaried taxpayers and pensioners under the new regime, which became the default unless opted out

The finance ministry is planning to increase the standard deduction limit for taxpayers under the new tax regime, while the older, exemption-filled regime will remain unchanged, according to the reports by Times of India. The report further adds that the Finance Minister Nirmala Sitharaman has started public consultations on the budget, although most discussions are currently within the finance ministry. Also read/watch - <a title="Prosus writes off Byju's stake, marking $493 million in loss" href="https://www.editorji.com/business-news/prosus-writes-off-byju-s-stake-marking-493-million-in-loss-1719226629913">Prosus writes off Byju's stake, marking $493 million in loss</a>
These internal assessments will be reviewed with other government branches and the Prime Minister's Office before final decisions. In the 2023 Budget, the finance minister introduced a standard deduction of 50,000 rupees for salaried taxpayers and pensioners under the new regime, which became the default unless opted out. Additionally, a rebate under Section 87A was increased for taxable incomes up to 7 lakh rupees, eliminating taxes for these earners, and the highest surcharge under the new regime was removed.

The government plans to revise income tax rates, focusing on lower income levels to boost consumption, which is crucial for economic revival. Tax rationalisation is favored over welfare spending to enhance fiscal stability and stimulate economic activities

Govt may cut income tax rate to boost demand, rekindle capital expenditure: Report

<h2>The government plans to revise income tax rates, focusing on lower income levels to boost consumption, which is crucial for economic revival. Tax rationalisation is favored over welfare spending to enhance fiscal stability and stimulate economic activities</h2>

The middle class may get some relief as the income tax rate is likely to be revised. As per Indian Express, policymakers in the government are in favour of rationalising the existing income tax structure, especially at lower income levels.
<h3>Income Tax rate</h3>
The Indian Express report quoted two government officials and said that it is likely that tax rate cuts for those earning less may likely take precedence over freebies or excessive welfare spending given the focus on fiscal consolidation.
This comes as the government is aiming to boost consumption by cutting rate that would enhance disposable income. As per Indian Express, a boost to consumption is being seen as crucial for reviving demand, which in turn is central to restarting the investment cycle, especially rekindling private capital expenditure in consumer-focused sectors
This could also add to GST Collections. &ldquo;This way (tax rationalisation), you will unlock consumption. There would be greater disposable income, means greater consumption, greater economic activities, more GST collection. So you may be actually activating more direct and indirect revenue collection. It would also mean more direct tax collection, also for corporations, because they would be having more income to report,&rdquo; an official told Indian Express.
At present, the rise in marginal income tax is &ldquo;too steep&rdquo;. &ldquo;Right now, in the new tax system, your first slab of 5 per cent starts at Rs 3 lakh. By the time it goes to Rs 15 lakh, which is five times, the marginal tax rate jumps from 5 per cent to 30 per cent &mdash; a six fold jump. So while income goes up five times, the marginal tax rate goes up six times, which is quite steep,&rdquo; the official told Indian Express.
<h3>Tax Simplification</h3>
This Tax simplification is also seen as as a better tool than overt spending on welfare schemes, which may see possible leakages. &nbsp;&ldquo;Our deficit is not too low. The poor cannot be benefitted at the cost of fiscal instability. Consumption should come from economic activities generated through appropriate government schemes and not voucher spend. It can be done through tax cuts, especially for lower income levels,&rdquo; another official told Indian Express.
The newly formed government under Prime Minister Narendra Modi is expected to &nbsp;present the full Budget for financial year 2024-25 by the third week of July.
Also watch: <a href="https://www.editorji.com/business-news/economy/full-budget-likely-to-be-present-on-july-22-report-1718346922422">Full budget likely to be presented on July 22: Report</a>

Internal discussions are currently underway to determine the threshold for compounding offences. Presently, criminal prosecution can be triggered for minor infractions, such as delayed payment of TDS, which can even lead to the prosecution of company directors

Govt to decriminalise minor tax offences within 100 days: Report

Internal discussions are currently underway to determine the threshold for compounding offences. Presently, criminal prosecution can be triggered for minor infractions, such as delayed payment of TDS, which can even lead to the prosecution of company directors

The Centre plans to address a long-standing industry demand by decriminalising minor income tax offences as per an exclusive report by Moneycontrol.
Prosecution will be replaced with penalties to improve ease of doing business, a senior government official revealed to Moneycontrol.
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The report further added that within the next 100 days, the government plans to promote ease of doing business by revising certain provisions of the Income Tax Act. The threshold for what constitutes a minor offence will be established to facilitate this change. Internal discussions are currently underway to determine the threshold for compounding offences. Presently, criminal prosecution can be triggered for minor infractions, such as delayed payment of TDS, which can even lead to the prosecution of company directors.&nbsp;

The CBDT order said that the outstanding tax demands pertaining to income tax, wealth tax and gift tax as on January 31, 2024, shall be remitted and extinguished and the limit include principal component of tax demand, interest, penalty or fee, cess, surcharge

Income tax demand of up to Rs 1lakh/person can be withdrawn: IT department

<h2>The CBDT order said that the outstanding tax demands pertaining to income tax, wealth tax and gift tax as on January 31, 2024, shall be remitted and extinguished and the limit include principal component of tax demand, interest, penalty or fee, cess, surcharge</h2>

The Income Tax department has begun the process of extinguishment of old outstanding small income tax demand as announced in the Interim Budget 2024. The Central Board of Direct Taxes (CBDT) has set the ceiling at Rs 1 lakh per person for withdrawal of small tax demands till Assessment Year 2015-16.
<h3>Tax Withdrawal</h3>
The CBDT order said that the outstanding tax demands pertaining to income tax, wealth tax and gift tax as on January 31, 2024, shall be remitted and extinguished "subject to the maximum ceiling of Rs 1 lakh for any specific taxpayer/assessee".
The limit of Rs 1 lakh would include principal component of tax demand, interest, penalty or fee, cess, surcharge.
However, the remission shall not be applicable on the demands raised against the tax deductors or tax collectors under TDS or TCS provisions of the I-T Act.
Also Read: <a href="https://www.editorji.com/business-news/tax-payers-who-donated-to-unrecognised-political-parties-under-income-tax-department-s-radar-1707987872235">Tax payers who donated to unrecognised political parties under Income Tax department's radar</a>
Finance Minister Nirmala Sitharaman in the interim budget said that that tax demands for AY 2010-11 of up to Rs 25,000 and for AY 2011-12 to 2015-16 of up to Rs 10,000 will be withdrawn. Tax demands totalling about Rs 3,500 crore will be withdrawn following the announcement.
Nangia Andersen India Partner Maneesh Bawa said the directive further specifies that this waiver or cancellation does not entitle taxpayers to any claims for credit or refunds.
Additionally, the waiver or cancellation will not influence any ongoing, planned, or potential criminal legal proceedings against the taxpayer and does not grant any immunity under any legislation.
"Taxpayers are advised to access their online accounts and navigate to Pending Action &gt; Response to Outstanding Demand to verify the status of 'Extinguished Demands' related to them," Bawa said.
Revenue Secretary Sanjay Malhotra had earlier this month said that there are about 1.11 crore such disputed tax demands
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 The Income Tax department has frozen the Congress' main bank accounts on "flimsy grounds", treasurer Ajay Maken claimed on Friday

I-T appellate allows Congress to operate frozen bank accounts

I-T appellate grants relief to Congress
I-T appellate allows operation of Congress accounts
Congress said I-T dept had frozen 4 of its bank accounts

&nbsp;The Income Tax department has frozen the Congress' main bank accounts on "flimsy grounds", treasurer Ajay Maken claimed on Friday

Just over an hour after Congress in a press conference said that four of its bank accounts were frozen, the Income Tax appellate tribunal granted it relief.&nbsp;
The tribunal allowed the Congress to operate its accounts till the next hearing which is on February 21.&nbsp;
&nbsp;The Income Tax department has frozen the Congress' main bank accounts on "flimsy grounds", treasurer Ajay Maken claimed on Friday and said this has affected all political activity of the party barely two weeks before general elections are announced.
The party is unable to use even the funds received under its crowdfunding scheme, Maken said at a press conference and alleged that democracy is in danger in the country. Maken said four main bank accounts were frozen. Sources later put the number at nine.
The accounts, including that of the Indian Youth Congress, were frozen on an Income Tax demand of Rs 210 crore for 2018-19, an election year, Maken said.
According to him, the party filed its Income Tax return for the concerned year a few days late and that is why this action. He said the IT authorities' orders freezing the accounts had come on Wednesday.
"For the first time in the country's history, accounts of the principal opposition party have been frozen by the tax authorities on flimsy grounds, barely two weeks before the announcement of general elections," Maken told reporters.
Congress president Mallikarjun Kharge said in a post on X, "Power drunk Modi Government has frozen the accounts of the country's largest Opposition party - the Indian National Congress - just before the Lok Sabha elections." "This is a deep assault on India's Democracy," he added. The unconstitutional money collected by the BJP would be utilised by them for elections, but the money collected by the Congress through crowdfunding shall be sealed, the party president said.
"That is why, I have said that there won't be any elections in the future. We appeal to the Judiciary to save the multi-party system in this country and protect India's Democracy," the Congress president said.
He said they will take to the streets and wage a strong fight against this autocracy.
Echoing the party chief, Maken appealed to the judiciary to save democracy as it was in danger and said the country is headed towards "one-party democracy".
He said the party has already appealed to the Income Tax appellate authority and hoped for justice. The party will otherwise make an appeal before the judiciary, Maken said.
On Thursday, the Supreme Court scrapped the Centre's electoral bonds scheme of anonymous political funding, calling it "unconstitutional" and ordering disclosure of the bond's donors, amount and recipients by March 13.
With PTI inputs

The Congress has said that the Income Tax department has frozen 4 of its bank accounts

Ajay Maken: Congress bank accounts frozen, Income Tax demanded Rs 210 in recovery

The Congress has said that the Income Tax department has frozen 4 of its bank accounts

The Income Tax department has frozen the Congress' four main bank accounts on "flimsy grounds", party treasurer Ajay Maken claimed on Friday and alleged that democracy was in danger in the country.
This has affected all political activity of the party, Maken said at a press conference. Sources later said nine accounts had been frozen.
The accounts were frozen on an Income Tax demand of Rs 210 crore for 2018-19, an election year, Maken said.
"For the first time in the country's history, accounts of the principal opposition party have been frozen by the tax authorities on flimsy grounds, barely two weeks before the announcement of general elections," Maken told reporters.
He appealed to the judiciary to save democracy as it was in danger and said the country is headed towards one-party democracy.
Maken said the party has already appealed to the Income Tax appellate authority.&nbsp;

About 5,000 notices are sent under Section 80GGC of the Income Tax Act as the donations to political parties did not match the declared income and it is suspected that these parties may have returned some of the amount in cash

Tax payers who donated to unrecognised political parties under Income Tax department's radar

<h2>About 5,000 notices are sent under Section 80GGC of the Income Tax Act as the donations to political parties did not match the declared income and it is suspected that these parties may have returned some of the amount in cash</h2>

The Income Tax department has sent notices to a number of taxpayers who made donations to political parties that are registered, but not recognised by the Election Commission. The notices were sent both to individuals and corporates for donations made in FY21 and FY22.&nbsp;
As per The Economic Times, the income tax department is investigating if such payments to lesser-known political parties were used to evade tax and launder money.
<h3>Donation to political parties</h3>
About 5,000 notices are sent under Section 80GGC of the Income Tax Act.
"So far, about 5,000 notices have been sent for FY21 and FY22. We will be sending more notices in the coming days," a senior official told ET. "The donations were made to about 20 registered, but unrecognised, political parties", the official said.
Also Read: <a href="https://www.editorji.com/business-news/income-tax-filings-reach-a-record-high-of-8-18-crore-by-december-31st-1704197799942">Income tax filings reach a record high of 8.18 crore by December 31st</a>
The official further told the publication that the donations did not match the declared income, and it is suspected these parties may have returned some of the amount in cash. In some cases, taxpayers have donated up to 80% of their income to a political party that's not even properly registered.
"We have sent notices where donation was not in proportion to income," a senior official told The Economic Times.&nbsp;
An unrecognised poltical party is the one that is registered but has not contested in any election or have not acquired the vote percentage threshold in assembly or Lok Sabha polls.
A taxpayer can deduct 100% of the donated amount to a registered electoral trust or political party subject to total deduction not exceeding the individual's total income.&nbsp;
&nbsp;
&nbsp;
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&nbsp;

Recognizing the intricacies of tax filing, the government implemented user-friendly measures. These included prefilled data covering salary, interest, dividends, tax payments, and other financial aspects to streamline process 

Income tax filings reach a record high of 8.18 crore by December 31st

Recognizing the intricacies of tax filing, the government implemented user-friendly measures. These included prefilled data covering salary, interest, dividends, tax payments, and other financial aspects to streamline process&nbsp;

Income tax filings have surged to a new pinnacle, with a staggering 8.18 crore Income-tax Returns (ITRs) filed for the Assessment Year 2023-2024 by December 31 of the previous year, marking a notable increase from the 7.51 crore ITRs filed by the same time in 2022.
According to a recent release by the Ministry of Finance, this surge represents a significant uptick of 9% in comparison to the total ITRs filed for the previous Assessment Year 2022-23. Additionally, during this period, a substantial 1.60 crore audit reports and other forms were filed, showcasing an increase from the 1.43 crore filings during the corresponding time in the previous year.
The Ministry observed a commendable trend among taxpayers who diligently cross-referenced their financial transactions by accessing their Annual Information Statement (AIS) and Taxpayer Information Summary (TIS), reflecting a heightened sense of responsibility and awareness among taxpayers.
Acknowledging the complexities of tax filing, the government introduced user-friendly initiatives to simplify the process. Prefilled data, encompassing various financial aspects such as salary, interest, dividends, tax payments, and more, significantly facilitated smoother and faster ITR filings.
The launch of the TIN 2.0 digital e-pay tax payment platform, which replaced the OLTAS payment system, offered enhanced payment options including Internet Banking, NEFT/RTGS, OTC, Debit Card, payment gateway, and UPI. This platform ensured real-time crediting of taxes, streamlining the ITR filing process for taxpayers.
To motivate early filings, the government conducted over 103.5 crore outreach initiatives through targeted emails, SMS, and creative campaigns, resulting in the 9 percent increase in ITR filings for the A.Y. 2023-24 by December 31, 2023.
Moreover, the e-filing Helpdesk adeptly managed approximately 27.37 lakh taxpayer queries through various channels such as inbound and outbound calls, live chats, WebEx, and co-browsing sessions, providing proactive support during peak filing periods.
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An official of the State Bank of India said that they have received 176 bags out of which 140 have been counted.

IT raid at Congress MP Dheeraj Sahu's premises in Odisha concludes

An official of the State Bank of India said that they have received 176 bags out of which 140 have been counted.

Income tax officials on Tuesday concluded an IT raid at Congress MP Dheeraj Sahu's premises in Odisha's Balangir.
According to sources, around Rs 280 crore cash has been recovered from Dheeraj Sahu's Balangir's premises alone.
On Sunday, during the Income Tax raids at properties connected to Rajya Sabha MP Dheeraj Sahu, huge stacks of currency notes were seized.
"We received 176 bags and 140 of them have been counted, the rest will be counted today. Officials from 3 banks are involved in the counting process; 50 of our officials are involved. About 40 (currency counting) machines were brought here; 25 are in use and 15 are kept as a backup," the SBI Regional Manager said.
The Income Tax sleuths conducted raids at the premises of Boudh Distilleries Private Limited on Sunday as the crackdown by the central agency entered its fifth day.

The cash seizure in the income-tax department's searches against an Odisha-based distillery company has crossed 300 crore rupees, according to a PTI report.&nbsp;

Cash haul in IT raids linked to Congress MP crosses Rs 300-crore mark

The cash seizure in the income-tax department's searches against an Odisha-based distillery company has crossed 300 crore rupees, according to a PTI report. 

The cash seizure in the income-tax department's searches against an Odisha-based distillery company has crossed 300 crore rupees, according to a PTI report.&nbsp;

The cash seizure in the income-tax department's searches against an Odisha-based distillery company has become the "highest-ever" such haul in a single action conducted by any probe agency in the country and gone past Rs 300 crore, official sources said on Sunday.
The marathon raids against Boudh Distillery Private Limited, its promoters and others entered the fifth day on Sunday. The raids were launched on December 6 by the taxman on charges of tax evasion and "off-the-book" transactions.
The sources told PTI that cash to the tune of more than Rs 300 crore has been counted till now and the counting is still on.
The department believes that the entire cache of currency is "unaccounted" money earned from cash sales of country liquor by the business group, distributors and others.
This is the highest-ever cash seizure made by an agency in the country as part of an action against a single group and entities linked to it, the sources had said.
Some of the high-value seizures in the past include one from 2019 when the GST Intelligence raided a Kanpur-based businessman and seized cash amounting to Rs 257 crore and another instance where cash amounting to Rs 163 crore was unearthed by the I-T department during searches against a road construction firm in Tamil Nadu in July 2018.
The department is also recording the statements of the executives and other staff who were present at the searched locations and will soon issue summonses to the main promoters of the company for recording their statements.
The premises of Congress's Rajya Sabha MP from Jharkhand, Dhiraj Prasad Sahu, in Ranchi and other places were also covered during the searches by the department. It was not clear what amount of cash and other documents were seized from Sahu's house.
The company and the MP did not respond to PTI's queries regarding the action being carried out against them.
Union Tourism Minister G Kishan Reddy sought to know on Sunday why Congress leader Rahul Gandhi is silent on the seizure of crores of rupees from premises allegedly linked to his party MP during these I-T department searches.
Karnataka Chief Minister Siddaramaiah accused the Centre of targeting only the Congress and not the BJP, in the wake of this huge cash seizure.

Income Tax Department is conducting a raid at DMK MP S Jagathrakshakan's house in Chennai.

Income Tax Department raids DMK MP S Jagathrakshakan's house in Tamil Nadu

Income Tax Department is conducting a raid at DMK MP S Jagathrakshakan's house in Chennai.

Income Tax officials carried out raids at the residence of DMK MP S Jagathrakshakan and about 20 other locations linked to him.
According to PTI, some educational institutes were among the places searched by the probe agency.
Jagathrakshakan is a Lok Sabha MP from the Arakonnam constituency of Tamil Nadu.
The raids comes months after Tamil Nadu minister V Senthil Balaji was arrested by the Enforcement Directorate in an alleged money laundering case.
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This surge is attributed to a dual impact - the shift of many taxpayers from lower to upper income brackets and a decline in zero-tax liability returns

Middle-class Indians income triples to Rs 13 lakh in FY22 from Rs 4.4 lakh in FY13: Report 

This surge is attributed to a dual impact - the shift of many taxpayers from lower to upper income brackets and a decline in zero-tax liability returns

A recent report from SBI Research revelaed that the average income of middle class has experienced a substantial growth trajectory.
Starting at ₹4.4 lakh in the financial year 2012-13 FY13, it has surged to an impressive ₹13 lakh by FY22.
The report titled 'Deciphering Emerging Trends in ITR Filing: The Ascent of the New Middle Class in Circular Migration' delves into the data on income tax returns (ITR) and highlights how the landscape of India's middle-class income has transformed.
The reasons behind this remarkable shift are two-fold. Firstly, many taxpayers have transitioned from the lower income group to the upper income group, consequently elevating the overall average. Secondly, there has been a noticeable decline in the number of return filers with zero tax liability.
The report sheds light on the middle-class transition over the past decade. In FY11, a staggering 84% of the 16 million tax filers belonged to the income group of up to ₹5 lakh.
However, by FY22, this proportion has decreased to 64% among the 68.5 million ITR filers. This indicates that approximately 13.6% of the population has moved up the income ladder over this period.
Furthermore, there has been a positive trend in the reduction of zero-tax liability returns. These are cases where an individual's taxable income falls below the basic exemption limit, making them exempt from paying taxes. This share has declined from 84.10% in FY11 to 64% by FY22.
Looking ahead, the report forecasts that the average income is set to further increase to ₹49.70 lakh by 2047.
This projection is driven by an expected rise in the number of tax filers and a shift in the distribution of tax filers towards higher income brackets. Additionally, the report estimates that about 25% of ITR filers will move out of the lowest income strata (annual income of up to ₹5 lakh) by FY47.
The report also highlights improvements in timely return filing and processing. In FY22, 75% of the 78 million returns were filed on or before the due date, a significant improvement from the 60% in FY19.
The processing of returns has also become more efficient, with 64% of the 68 million returns filed in FY23 being processed by the due date.
The report not only illustrates the remarkable growth in the average income of middle-class Indians but also offers insights into the changing dynamics of the workforce and tax filers.
It suggests strategies to enhance accuracy in capturing migration patterns and socio-economic characteristics, as well as leveraging technology to streamline the tax filing process.
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income tax

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