Zero tax filers increased by 20% between 2020-21 and 2024-25:50% increase in taxpayers in 4 years despite a rise in tax exemption limits

Despite the increase in income tax exemption limits, the number of taxpayers in the country continues to rise. According to the government report presented in the Parliament, while the number of zero tax return filers increased by 20% in the last four years, while, taxpayers increased up to 50.4%. In 2020-21, a total of 6.72 crore returns were filed. Of these, 4.84 crore were zero tax filers, meaning they had no tax liability. Meanwhile, 1.88 crore people paid taxes. In 2024-25, zero tax filers increased to 5.58 crore, but the number of taxpayers reached 2.82 crore. In 2020-21, 72% of total returns were zero filers, which decreased to 66% in 2024-25. Meanwhile, the share of taxpayers increased from 28% to 34%. According to experts, AI, faceless assessment, and simplification of income tax laws have increased trust in the tax system. Taxpayers who previously were caught up in tax avoidance strategies are now paying taxes directly. The impact of increased income from salaries, businesses and MSMEs after COVID is also visible in tax collection. Corporate profits have increased significantly in the last five years. Its effect is being seen in the form of an increase in the number of people filing income tax returns for paying taxes. Zero Filers Increased More in Southern States Zero filers increased rapidly in southern states considered more prosperous than the north. In the new state of Telangana, the number of zero filers tripled in five years. In Kerala, zero filers increased two and a half times. In Tamil Nadu, it increased by about one and a quarter times. Experts: Most young people start their first job in South Indian states like Telangana, Tamil Nadu and Karnataka. Even with lower salaries, PAN, bank accounts and PF deposits all begin. They are also taking advantage of tax exemptions. That’s why zero filers increased rapidly there. Haryana Also Shows Growth in Taxpayers In North India, the number of taxpayers has been increasing suddenly over five years. The reason is that people who were not paying taxes before are now coming forward to pay taxes. Looking at the increase in taxpayers, Haryana is at the top. Gujarat is second and Bihar is third. Madhya Pradesh is at 7th position in this list. Experts: With the expansion of tax exemption limits, people now feel they can avoid future income tax hassles by declaring their income. That’s why taxpayers increased by 1 crore in 5 years.