India’s taxpayer base more than doubled in the last decade Premium

India's taxpayer base more than doubled in a decade, reflecting improved tax administration efficiency and broader formal participation.

India’s direct tax system has undergone a significant expansion over the last decade, marked by a sharp rise in the number of taxpayers as well as sustained improvements in administrative efficiency. Time-series data released by the Income-Tax Department indicate that this expansion has been broad-based and persistent, reflecting deeper formal participation rather than a short-lived compliance surge.

Between Assessment Year (AY) 2013-14 and AY2024-25, the total number of taxpayers, defined as persons who either filed a return of income or in whose case tax was deducted at source, increased from 5.26 crore to 12.13 crore.

This increase, which more than doubles the taxpayer base, represents a compound annual growth rate (CAGR) of approximately 7.89% over 11 years, underscoring the sustained nature of the expansion. It marks one of the most important structural shifts in India’s direct tax landscape since the wider adoption of the Permanent Account Number.

A disaggregated view of the data shows that individual taxpayers remain the primary drivers of this expansion. As illustrated in Chart 1, the number of individual taxpayers rose from 4.96 crore in AY2013-14 to 11.61 crore in AY2024-25, translating into a CAGR of about 8% over the period.

Chart 1 shows the number of individual taxpayers in the left-axis (represented as bars) and the year-on-year growth in the right axis (represented as a line)

Growth was largely steady in the years preceding the COVID-19 pandemic, with year-on-year increases mostly in the high single digits. The contraction visible in AY2020-21, when individual taxpayers declined by nearly 9%, coincides with the disruption caused by the pandemic.