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

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.

This was followed by strong recovery, with growth accelerating to double digits in the most recent assessment years, indicating renewed momentum in the expansion of the individual tax base.

While individuals dominate the tax system in scale, the expansion has not been confined to households alone. Chart 2 shows the combined trend for non-individual taxpayers, comprising firms, companies, Hindu Undivided Families, Associations of Persons or Body of Individuals, local authorities, artificial juridical persons, and other residual PAN categories.

Chart 2 shows the number of non-individual taxpayers in the left-axis (represented as bars) and the year-on-year growth in the right-axis (represented as a line)

In absolute terms, the non-individual taxpayer base increased steadily from about 0.29 crore in AY2013-14 to nearly 0.48 crore by AY2024-25, corresponding to a CAGR of roughly 5% over the period.

Growth among non-individual taxpayers has been more moderate than among individuals, but also more stable. Year-on-year growth rates generally remained within the 4% to 7% range in the pre-pandemic years. The pandemic’s impact is again evident in AY2020-21, when growth slowed sharply to below 1% before recovering gradually in subsequent years.

However, unlike individuals, the post-pandemic rebound among non-individuals has been measured, with growth stabilising at around 5% in recent assessment years. This pattern suggests that formalisation has progressed across organisational and business entities, albeit at a steadier pace than individuals.

Cost of collection

The expansion of the taxpayer base has coincided with a marked improvement in tax administration efficiency. As shown in Chart 3, the cost of collecting direct taxes fell from 1.36% in FY2000-01 to 0.41% in FY2024-25.

The figure for FY2024-25 is provisional and may be updated later. This long-term decline has occurred despite a substantial increase in the number of taxpayers and total tax collections.

Chart 3 shows the cost of collection of direct taxes. Figures in %

The temporary rise in the cost ratio around FY2020-21 reflects pandemic-related disruptions rather than structural weakening. Since then, the ratio has fallen to its lowest level in the available data series, indicating sustained improvements in administrative efficiency.

Several institutional and technological changes help explain these trends. Over the past decade, the tax administration has increasingly relied on digital filing systems, pre-filled returns, faceless assessments, and expanded third-party information reporting.

These measures have reduced compliance frictions and enabled the system to manage a larger taxpayer base without a commensurate increase in administrative resources.

Unlike headline filing statistics that focus on absolute counts, the evidence presented here draws on taxpayer-level data, year-on-year growth dynamics, and long-term CAGR trends to assess the durability of India’s tax base expansion.

Taken together, the evidence from taxpayer levels, growth rates, CAGR patterns, and collection costs points to a structural strengthening of India’s direct tax system. Revenues are being mobilised from a broader cross-section of taxpayers even as administrative efficiency improves, thereby reinforcing the stability and sustainability of public finances and embedding taxation more firmly within the formal economy. This transition has important implications for revenue resilience, equity, and long-term fiscal planning nationwide.

It is to be noted that growth rates are calculated on a year-on-year basis using taxpayer headcount data.

CAGR is computed for the period AY2013-14 to AY2024-25 using unrounded values, and figures for AY2024-25 and FY2024-25 are provisional.

The writer is with the Indian Statistical Service. The views expressed are personal

Published – February 18, 2026 08:00 am IST