India Taxpayer Base Direct Tax Expansion: India’s direct tax system has seen remarkable growth over the past decade, with the number of taxpayers more than doubling. According to data from the Income-Tax Department, this expansion is both broad-based and persistent, indicating a deeper formal participation rather than a temporary compliance surge.
Between Assessment Year 2013-14 and AY2024-25, taxpayers, including those filing returns or having tax deducted at source, increased from 5.26 crore to 12.13 crore. This represents a compound annual growth rate of approximately 7.89% over 11 years, signifying a major shift in India’s direct tax landscape.
The growth has been primarily driven by individual taxpayers, whose numbers rose from 4.96 crore in AY2013-14 to 11.61 crore in AY2024-25, with a CAGR of about 8%. Despite a contraction during the COVID-19 pandemic, the individual taxpayer base has shown strong recovery, with recent years seeing double-digit growth.
In addition to individuals, non-individual taxpayers, including firms and companies, have also increased from 0.29 crore to nearly 0.48 crore over the same period, with a CAGR of roughly 5%. Although their growth is more stable and moderate, it suggests a steady formalization across business entities.
The taxpayer base expansion aligns with improvements in tax administration efficiency, with the cost of collecting direct taxes falling from 1.36% in FY2000-01 to 0.41% in FY2024-25. This efficiency has been supported by digital filing systems, pre-filled returns, and faceless assessments, reducing compliance frictions.
Overall, these developments indicate a structural strengthening of India’s direct tax system, enhancing revenue mobilization and administrative efficiency. This transition is crucial for revenue resilience and long-term fiscal planning in India.
Published in SouthAsianDesk, February 18th, 2026
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