Data presented in the Lok Sabha showed that nearly 66.5% of income tax return filers have zero tax obligation. Compared to FY20, the number has nearly doubled in FY25.
The Minister of State for Finance Pankaj Chaudhary in response has shown the data of the income tax return filers. It outlines that the number of return filers stood at Rs 6.48 crore in FY19-20 which surged to 8.39 crore in the existing financial (as of December 31).
The number of return filers with zero tax obligation was 2.9 crore or 44.75% of the total filers in FY20. At present the number and share in FY25 are 5.58 crore and 66.5 per cent respectively.
Percentage of Taxpayers with Zero Tax Liability
| Financial Year | Total ITR (In Cr.) | ITR with Zero Tax Liability (In Cr.) | Percentage(%) of Zero Tax Liability |
|---|---|---|---|
| 2019-20 | 6.48 | 2.90 | 44.75 |
| 2020-21 | 6.72 | 4.85 | 72.17 |
| 2021-22 | 6.94 | 5.05 | 72.76 |
| 2022-23 | 7.40 | 5.16 | 69.72 |
| 2023-24 | 8.09 | 5.50 | 67.98 |
| 2024-25 (Till 31st Dec.) | 8.39 | 5.58 | 66.50 |
Effects of Nil-tax Slab
In FY25 the number of zero tax liability filers rose by 92% as compared to FY20, till now the existing fiscal share is the lowest in 5 years.
The answer of the government in Parliament does not cite the cause for the high number of filers with the zero tax obligation though tax experts mentioned that the same is due to the Nil tax slab which is rising steadily.
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The ‘Nil tax’ slab after 2014, was raised to Rs 2.5 lakh which was then raised to Rs 5 lakh in 2019 and to Rs 7 lakh in 2023.
It directed that people in the same slab of the annual income are not needed to file the income tax based on the rebate but they still be required to submit the ITRs to claim the return.
The anticipation is that the number of filers with zero tax liability will increase not only in absolute terms but also as a share of total taxpayers. This is because, under the new regime, a person who previously had to pay ₹80,000 in taxes on an income of ₹12 lakh will now have zero tax liability on the same income.
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These taxpayers will required to submit the ITR to claim the rebate. Via increasing the limit nearly 1 crore taxpayers will be added to the number of filers with zero tax obligation.
