Tax net widened, tax liability of middle class reduced under Modi govt

NEW DELHI: There has been a 120 per cent increase in income tax returns filed between 2014 and 2024. From some 3.6 crore returns filed in 2014, it has increased to 7.9 crore this year. According to sources in the tax department, the maximum increase in tax returns filed were from those earning above Rs 50 lakh per annum.

Due to the strong anti-tax evasion and black money laws implemented by the Narendra  Modi government, there has been an almost five-fold increase in returns being filed by those earning above Rs 50 lakh (from 1.85 lakhs in 2014 to 9.39 lakhs in 2024), sources said.

Income Tax liability by those earning above Rs 50 lakh per annum increased from Rs 2.52 lakh crore in 2014 to Rs 9.62 lakh crore this year. Data showed that 76 per cent of income tax collected is from those earning above Rs 50 lakh. This, they said, has led to a reduced tax burden on the middle class.

Further, the sources said there has been an increase in Zero Income Tax filings due to increased exemption limit by the current government. In 2014, all those earning above Rs 2 lakh had to pay tax. In 2024, the exemption limit has been raised to Rs 7 lakh by the Modi government.

The percentage of income tax collection from taxpayers earning less than Rs 10 lakh reduced from 10.17 per cent of the total tax paid in 2014 to 6.22 per cent in 2024. Under the Modi government, those earning up to Rs 7 lakh have no liability to pay income tax. Even for those earning between Rs 7 lakhs and Rs 10 lakhs, the tax liability was an average of just Rs 43,000 annually as income tax in 2023-2024.

About 2.2 crore income tax returns filed belonged to those earning between Rs 7 lakh and Rs 10 lakh in 3023-2024. In summation, the sources asserted that there has been a substantial reduction of tax burden on people earning income less than 20 lakhs — middle-class group. Also, because of better enforcement, the number of returns with more than Rs 50 lakhs has increased substantially. (ANI)