Most of India’s personal income taxpayers have moved to the simpler new tax regime in this assessment year, with 72% of those who had filed their returns by the July 31 deadline opting for it, even as the number of Income Tax (I-T) return filings rose 7.5% to hit a record high of almost 7.29 crore.

“Out of the total ITRs [I-T returns] of 7.28 crore filed for Assessment Year 2024-25, 5.27 crore have been filed in the new tax regime compared to 2.01 crore ITRs filed in the old tax regime,” the Central Board of Direct Taxes (CBDT) said on Friday, terming the increase in number of taxpayers under the new tax regime ‘heartening’.

The switchover has likely been expedited by significant changes in the new tax regime, originally introduced in 2020, effected in the Budget 2023-24 to make it attractive. Apart from making the new system ‘the default tax regime’ for taxpayers, Finance Minister Nirmala Sitharaman had slashed the tax rate slabs to five from six and raised the tax-free income limit to ₹3 lakh from ₹2.5 lakh.

Last year’s Budget had also granted a hike in the tax rebate limit from ₹5 lakh to ₹7 lakh a year under the new tax regime, compared with ₹5 lakh a year applicable for the old tax regime. With Budget 2024-25 raising the standard deduction to ₹75,000 from ₹50,000 and rejigging the tax slabs under the new regime again, there could be a greater impetus for taxpayers to opt out of the old regime.

Nearly 58.6 lakh I-T returns were filed by first-time filers, a fair indication of widening of tax base, the department said in a statement. A little over 6.77 crore returns had been filed by the July 31 deadline last year, while total ITR filings were 8.61 crore.

Taking the first-time filers into account, back-of-the-envelope calculations show that about 7.19 lakh taxpayers who had filed their returns on time last year, have not met the deadline this year.

Portal ramped up

Responding to tax practitioners’ concerns about slow processing and down times on the I-T e-filing portal ahead of the deadline, CBDT chairperson Ravi Agarwal had told The Hindu that those issues had been resolved by ramping up the portal’s handling capacity. The filings data for the last few days suggests this clicked.

From about 28 lakh filings on the portal on July 24, the number of ITRs filed soared to almost 70 lakh on July 31. “The filing of ITRs peaked on July 31 [due date for salaried taxpayers and other non-tax audit cases] with over 69.92 lakh ITRs being filed on a single day and a highest per hour rate of 5.07 lakh recorded between 7 p.m. to 8 p.m. on July 31,” the I-T department said.

The highest per second rate of ITR filings was 917, achieved on July 17 early morning, while the highest per minute rate of ITR filings was 9,367, at 8.08 p.m. on the deadline day.

“During the peak filing period, the e-filing portal successfully handled huge traffic, providing a seamless experience to taxpayers for filing of ITRs. On July 31, 2024 alone, successful logins stood at 3.2 crore,” the statement said.

Over 43.82% of ITRs were filed using the online utility available on the e-filing portal and the balance have been filed using offline ITR utilities.