From Rs.14.12 lakh crore to Rs.23.40 lakh crore in 5 years': How govt is tightening the tax net
The government has stepped up efforts to curb tax evasion and improve compliance through tighter reporting requirements, data-based monitoring and technology-driven checks, even as the number of people filing income-tax returns rose by nearly 24% over the past five years.
According to a written reply by Minister of State for Finance Pankaj Chaudhary in the Lok Sabha on Monday, the number of income-tax return filers increased from 6.96 crore in 2021-22 to 8.67 crore in 2025-26. In absolute terms the return filers increased by 17,046,901 in five years.
To prevent fraudulent GST claims, detecting under-reporting of income and make tax transactions more traceable, the government introduced a slew of measures.
Data-based monitoring to detect tax evasion
On the direct-tax side, the government has made PAN quoting mandatory for specified transactions and PAN-Aadhaar linking compulsory.
It has also expanded the use of the Annual Information Statement (AIS), which provides taxpayers with information on their income, financial transactions and tax details for a financial year. Chaudhary said the increased transparency makes it easier to detect under-reporting or omission of income.
The Income Tax Department has also been using its NUDGE campaign to encourage taxpayers to correct their returns. Under the initiative, taxpayers are contacted through SMS and email and encouraged to use revised or updated returns to disclose unreported income.
