A major change in the nation’s tax assessment methodology has occurred in the recent ten years, as seen by the dramatic reduction in processing times that has coincided with the spike in income tax returns (ITRs) filed, which reached a record 7.28 crore in the assessment year 2024–25.
A notable accomplishment of Prime Minister Narendra Modi’s administration is the remarkable decrease in the average processing time for tax returns.
Refunds are being processed more quickly now that the average ITR processing time has dropped from 93 days in 2013 to 10 days, according to Finance Minister Nirmala Sitharaman.
This has been made possible by the implementation of modernized systems and procedures for income tax returns, as well as the gradual streamlining of the individual tax system to facilitate the filing of tax returns.
The Finance Ministry recently revealed data showing that the quantity of ITRs filed increased to a record 7.28 crore in 2024–2025. Compared to the 6.77 crore ITRs submitted for AY 2023–24 through July 31 of last year, this indicates a 7.5% increase.
This year, 58.57 lakh ITRs were filed by first-time filers to the I-T Department by July 31. This shows that the tax base is expanding in a booming economy.
FM Sitharaman states that the Union Budget’s main goals are to guarantee fair treatment for all asset classes and streamline the tax system.
The Prime Minister Modi government’s budgets have included a number of tax ideas that have helped the middle class.
Under the new I-T regime, the effective tax on an annual income of Rs 15 lakh was lowered to 10% in 2023 and further decreased this year.
The Finance Minister claims that up to July 31 (2024–25 AY), 5.2 crore taxpayers, or 72.8% of the total, had switched to the new tax system, demonstrating the system’s effectiveness.
The government is aiming for a thorough examination of the Income Tax Act in the interim. Within the next six months, the first draft will be made available for stakeholder feedback.
