Income Tax & the Direct-Tax Base

The last decade of direct-tax administration is recorded most plainly in CBDT's own Time Series Data. Income tax returns filed, including revised returns, rose from 3,79,74,966 in FY 2013-14 to 9,18,46,067 in FY 2024-25. CBDT keeps this count by the financial year in which the returns are filed, and its note explains the one break in the run: in FY 2017-18 and earlier years, returns of two assessment years — the current one plus belated returns of the previous year — could be filed in a single financial year, so the figure for FY 2018-19 is marginally lower than for FY 2017-18 rather than higher. Net direct tax collections over the same years went from ₹6,38,596 crore (FY 2013-14) to ₹22,26,375 crore (FY 2024-25, provisional), and the cost of collecting them fell from 0.57% to 0.41% of total collections.

Faceless assessment removed the meeting between the taxpayer and the assessing officer. The E-Assessment Scheme 2019 was launched on 7 October 2019 with the setting up of the National e-Assessment Centre in New Delhi, and 58,322 regular assessment cases for AY 2018-19 were shortlisted on a pilot basis. On 13 August 2020 the scheme was renamed and widened into the Faceless Assessment Scheme 2019, covering all regular assessments under section 143(3) for AY 2018-19 and pending income-escaping assessments, except cases assigned to central charges and international tax charges. By 10 March 2021, 82,072 assessment cases had been completed in a faceless manner, on the Minister of State for Finance's reply in the Rajya Sabha. From 1 April 2021 the procedure ceased to be a scheme and became section 144B of the Income-tax Act itself.

A return is filed for an assessment year on the income of the financial year before it: the return for AY 2024-25 reports income earned in FY 2023-24. That is why the two labels are not interchangeable — CBDT's count of returns filed is kept by financial year, while its count of taxpayers is kept by assessment year. A taxpayer, in CBDT's definition, is a person who either filed a return of income for the relevant assessment year or had tax deducted at source in the relevant financial year without filing one; on that basis the count rose from 5,26,44,496 in AY 2013-14 to 12,13,27,509 in AY 2024-25. Filing itself is pre-filled from the Annual Information Statement, implemented on the Compliance Portal in November 2021, which draws on TDS and TCS records, stock and mutual fund transactions and other reported data. Once a return is e-verified it goes for processing; CBDT reported on 5 September 2023 that the average processing time after verification had fallen to 10 days for AY 2023-24, from 82 days for AY 2019-20. Section 139(8A), inserted by the Finance Act 2022, lets a taxpayer file an updated return correcting an earlier one on payment of additional tax; the window was 24 months from the end of the assessment year, extended to 48 months by the Finance Act 2025.

The law itself has been rewritten. The Income-tax Bill, 2025, tabled in Parliament on 13 February 2025, set out to simplify the 1961 Act without changing tax policy or rates: the Government's own comparison put the Act at 512,535 words, 47 chapters and 819 sections against 259,676 words, 23 chapters and 536 sections in the Bill, with tables rising from 18 to 57 and formulae from 6 to 46. The Bill was passed on 12 August 2025 and received the President's assent on 21 August 2025, becoming the Income-tax Act, 2025. The Income-tax Rules, 2026 were notified on 20 March 2026, and the Act came into force on 1 April 2026. What the new Act does to filing counts and processing times will only show in the statistics for FY 2026-27 onwards; CBDT's published series stops at FY 2024-25 for returns and FY 2025-26 for collections.