Indian Taxpayers in 30% Tax Slab on the Rise: Government Data Reveals

By By Consultants Review Team Wednesday, 15 March 2023

According to government data presented in Parliament on Tuesday, in the financial year 2020-21 which was impacted by the Covid-19 pandemic, out of a total of 6.94 crore taxpayers, 48.4 lakh individual taxpayers or 7.6 percent belonged to the highest 30 percent tax bracket in the country. The number of individual taxpayers in the 30 percent tax bracket increased to 60.81 lakh in the next fiscal year, but it is not possible to determine the percentage share as data for the total number of taxpayers is not available for the financial year 2021-22.

The Finance Ministry stated that the data for the total number of taxpayers for the financial year 2021-22 (the assessment year 2022-23) is currently being compiled, as the deadline for filing revised tax returns was December 31, 2022. According to the ministry, an individual taxpayer falls in the 30 percent tax bracket if their total income exceeds Rs 10 lakh and they have chosen the old tax regime, or their total income is over Rs 15 lakh and they have opted for the new tax regime. This excludes non-resident Indians, senior citizens, and super senior citizens. The ministry used to release annual tax filing data for direct taxes, but it has not done so since the assessment year 2018-19.

The total number of taxpayers had recorded a loss of 23.25 lakh in the financial year 2019-20, declining to 6.71 crores from 6.94 crores in the previous financial year 2018-19, government data showed. The total number of taxpayers then again increased to around 6.94 crores in 2020-21 but remained below the pre-pandemic level of 2018-19 by 24,645 taxpayers. The trend in individual taxpayers in the assessment year 2021-22 shows a shift towards middle-income and high-income categories away from the low-income category of zero to Rs 5 lakh.

In the assessment year 2021-22, which broadly refers to the financial year 2020-21, the number of taxpayers in the income group of zero to Rs 5 lakh decreased to 4.11 crore from 4.63 crores in the previous year. However, the number of taxpayers in the income group of Rs 5-10 lakh increased to 1.40 crore in FY21 from 1.12 crore in the previous year.

The total number of individual taxpayers had decreased from 6.54 crore in the previous year to 6.29 crore in FY 2019-20. However, in FY 2020-21, the number of individual taxpayers increased to 6.33 crore, but it was still more than 20 lakhs lower than the pre-pandemic level of 2018-19.

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