In the process, the filing of ITRs touched a new high with a record 7.28 crore filed for assessment year 2024-25. Processing times have come down drastically over the last decade, reflecting a sea change in the methodology for tax assessment across the country.
One of the major achievements of Prime Minister Narendra Modi's government is the large reduction in the average processing time of returns. As per Finance Minister Nirmala Sitharaman, it has come down from 93 days in 2013 to just 10 days now, facilitating quicker refunds.
Improvements have come in with the initiation of new and upgraded systems put in place while making filing simpler over time. According to the latest data issued by the Ministry of Finance, ITR filings have increased significantly to 7.28 crore for 2024-25—about 7.5 percent higher than the 6.77 crore filings reported during the corresponding period last year, up to July 31.
The other important trend is an addition of 58.57 lakh first-time filers this year, indicating an enlarged tax base in this burgeoning economy. FM Sitharaman said that the Union Budget seeks to rationalize the tax structure, bringing equity in all classes of assets, which benefits the middle class with various tax proposals.
The new regime's effective tax rate on annual incomes up to Rs 15 lakh reduced to 10 per cent in 2023, which was further revised this year. As of July 31, 2023, about 5.2 crore taxpayers, out of a total of 7.15 crore tax filers, have opted for the new regime for the assessment year 2024-25, proving its success.
Concurrently, the government is embarking on a wholesale review of the Income Tax Act; the first draft will be released for stakeholder consultation within six months.
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