Over one million returns a day needed to meet December ITR deadline

This is at least 3.3x times the current pace of daily returns filed

More returns will have to be filed in the rest of the month than has been filed in the rest of the entire tax season to meet the December 31, 2021 deadline.

Some 67.4 million returns were filed in the pre-pandemic year of 2018-19 (FY19). The Income Tax Department has said that it has seen around 30.3 million returns filed so far this year. This means that an additional 37.1 million returns at least would need to be filed over 3-4 weeks' period. This works out to 1.3 million returns a day.

The tax department has said that currently 0.4 million returns are being filed daily as of December 3. The income tax website had faced issues earlier in the year. The government had extended the tax filing deadline to December-end. The daily number would need to more than triple for the new target to be met. This assumes that the number of tax filers is the same as the pre-pandemic figure.

Another Lok Sabha answer suggested that it had seen 73.9 million returns filed in the period since the pandemic began. This would mean 1.6 million returns to be filed daily to meet the December target. The number of returns would have go up by a multiple of almost four to match this. This assumes that there has been no growth in number of entities who would be required to file their returns.

The previous years have shown a robust growth in the number of tax return filers. The total number was around 38 million in FY14. This had gone up to 67.4 million by FY19. An analysis of the data shows that most returns are filed at the lower end of the income categories.

Those earning between Rs 2 lakh and Rs 5 lakh accounted for 54.3 per cent of the total returns filed in FY18. This is the latest year for which granular data could be found on tax returns filed. Those at the Rs 5 lakh upper limit are also included in this category. Those at the exact lower limit of Rs 2 lakh are excluded. If one includes those earning Rs 2 lakh and below, then the sum would cover 64.2 per cent of the total returns filed. Those earning over Rs 50 lakh account for less than 0.73 per cent of the returns filed.

A separate data release from the tax department shows overall numbers up until FY19 without granular income data. It however, does have a break-up of the kind of tax-payers who are filing returns. It shows that most of the taxes are filed by individuals. They account for over 90 per cent of the returns filed since FY14. Companies and firms together account for under five per cent of returns filed. The remainder include other entities such as AOP (association of person), and BOI (body of individual). Interestingly, the share of individuals had only been going up since FY14. They accounted for 93.9 per cent of returns filed in FY19. The share of companies and firms dropped from 4.4 per cent to 3.5 per cent between FY14 and FY19. The share of others dropped from 3.3 per cent to 2.6 per cent in the same period.  

This would suggest that individual tax filers may hold the key to whether the returns come in by December 31.