Income tax return filings are projected to grow by 8-10% for the current assessment year, driven by better data reporting and higher compliance. Tax experts expect more taxpayers to file returns, with a notable shift toward complex forms as more individuals earn income from stocks and business ventures.
The number of income tax return (ITR) filings in India is expected to climb by 8-10% in the Assessment Year (AY) 2026-27. This growth maintains a long-term trend of rising tax compliance across the country. Official data shows that total filings have grown from 5.83 crore in AY 2022-23 to 7.29 crore in AY 2024-25, and reached over 7.3 crore by the September 2025 deadline for AY 2025-26.
Why Filings Are Increasing
Several factors are contributing to this rise in compliance. The Income Tax Department has improved its data visibility through the Annual Information Statement (AIS), which tracks financial transactions across various platforms. Stricter rules around Tax Deducted at Source (TDS) and Tax Collected at Source (TCS) also mean that more financial activity is now captured within the tax system. Tax experts note that the increased awareness among citizens regarding the department’s access to financial data has encouraged voluntary filing, even for those whose income might fall below the standard exemption limits but who participate in high-value transactions.
The Shift to Complex Tax Returns
A significant change occurring alongside the increase in volume is the types of forms being filed. Many taxpayers who previously used simple ITR-1 forms are now moving toward ITR-2 and ITR-3. This shift is largely driven by changing income patterns. As more Indians invest their savings into stocks, mutual funds, and futures and options (F&O) trading, their tax returns become more complicated. Additionally, the rise of small side businesses and side-hustles has created a broader base of individuals who have multiple sources of income beyond their main salary.
Tax Compliance and Deadlines
While the government has introduced tax reliefs under the new tax regime, which may encourage more voluntary compliance, the administrative burden on taxpayers is also rising. For the current assessment year, the deadline for filing ITR-1 and ITR-2 is July 31, while those required to file ITR-3 and ITR-4 must complete their submissions by August 31. The stability of the income tax portal and the speed of tax refunds will remain key factors for investors and individuals to monitor as they approach these deadlines. As of early February 2026, total filings for the previous year had reached approximately 8.80 crore, setting a high benchmark for the current cycle.