Most tax filers report zero income tax liability

Most tax filers report zero income tax liability

Subject: Economy

Section: Fiscal Policy

Context:

70% ITR fillers have zero tax liability as per data presented to the Parliament by finance minister.

Key Points:

• Around 70% of people who filed income tax returns in FY23 reported no tax liability.
• In FY23, 7.4 crore persons filed income tax returns but 5.16 crore reported zero tax liability, showed the data. That represents 70% of all tax return filers.
• There has been a 6.18 % increase in the number of persons filing income tax returns in FY23.
  • The government took several steps to increase the number of tax return filers, the minister said.
  • The scope of Tax Deducted at Source / Tax Collected at Source (TDS/TCS) has been expanded by bringing several new transactions into their ambit.
  • Newer points of taxation include TDS/TCS on huge cash withdrawals, foreign remittance, purchase of luxury car, e-commerce participants, sale of goods, acquisition of immovable of property, purchase of overseas tour programme, transfer of virtual digital assets, net winnings from online games and interest on listed debentures paid to the resident.

Tax base:

The tax base is the total amount of assets or revenue that a government can charge tax on. For example, the assessed value is the tax base for property taxes and taxable income is the tax base for income tax. It can also be defined as the total of taxable income, taxable assets, and the assessed value of property within the government tax jurisdiction.

Widening of text base mean that the people who are filing returns should be much more.