For the last four consecutive fiscal years, there has been seen consistent upward growth in the number of income tax returns filed by taxpayers in Karnataka state. This upward trend indicates the increasing awareness of tax adherence in the population. In the fiscal year 2019-20, a noticeable 38.18 lakh individuals filed their income tax returns, with this figure experiencing a slight increase to 39.25 lakh in the fiscal year, 2020-21.
This upturn kept constant in the following fiscal year 2021-22 as well, where it touched 39.80 lakh filers. During the financial year 2022-23, this number reached a remarkable rise and clocked at 42.58 lakh filers. This consistent growth in tax filings indicates that people are more aware of their responsibility towards the nation.
In order to see the different perspectives and contexts of Karnataka’s contribution to the national tax landscape, it has a noticeable share in the overall income tax returns submitted in India.
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In the fiscal year 2021-22, Karnataka’s share of total national income tax returns stood around 5.74%, and in the latest financial year 2022-23, 5.75% was marked. These enticing growth graph of the State collectively shows its efforts to give a substantial share of tax returns to the nation.
Concerning zero tax liability, a study of the past four fiscal years’ aggregate return filings in Karnataka reveals that 12,46,799 individuals reported zero tax liability in the fiscal year 2019-20, which was succeeded by 23,61,785 individuals in 2020-21, 24,22,438 individuals in 2021-22, and 24,63,232 individuals in 2022-23. This data shows that individuals during these years had zero tax liabilities.
In the financial year 2022-23, Karnataka recorded an aggregate no. of taxpayers 42,58,035 who filed income tax returns. It secured the highest number of returns filed, with Uttar Pradesh securing the second position at 71,65,746 returns filed, and Tamil Nadu stood at the third position with 45,90,531 returns filed. Maharashtra was the highest in this regard, having a total of 1,13,91,610 income tax returns filed in FY 2022-23.
In a recent meeting in the Parliament, the Union Finance Minister, Nirmala Sitharaman, stated that there has been an impressive growth achieved of 6.18% in the number of individuals filing their income tax returns during the fiscal year 2022-23 when compared to the previous year.
This growth was achieved due to a series of strategic actions implemented by the Government to enhance tax compliance. Among these measures, is the expansion of the Tax Deducted at Source/Tax Collected at Source (TDS/TCS) framework to cover a wider array of transactions, making easy Personal Income tax filing via the provision of reduced slab rates for those not availing specific exemptions, and the issuance of pre-filled income tax returns including relevant information for individual taxpayers are included in department’s action plan.
On what grounds the tax compliance increased, she stated that bringing the updated Form 26AS, bearing complete tax deductions information, mentioned financial transactions, tax liabilities, and more, has enhanced taxpayer awareness and voluntary compliance.
