No-tax liability claims grow despite robust rise in income

The number of persons reporting zero-tax liability for their previous year’s income continued to climb, with 44.6 million tax returns, or two-thirds of all 2021-22 assessment year filings, making this claim, according to data available from the income tax department.

- Gireesh Chandra Prasad

This represents a 4% increase in zero-tax returns filed in 2021-22 from the previous assessment year, despite the overall income of individuals and businesses growing by more than 14% in the tax returns filed in 2021-22, according to official data from the tax department.

While the overall trend of increased tax return filings signals a broadened tax base and improved compliance, the rise in returns claiming zero-tax liability raises concerns about the depth of this expansion.