The government has raised an additional Rs 9,118 crore in tax revenue from over 9 million updated ITRs filed in the past four years.
This success is attributed to the voluntary compliance scheme introduced by the government.
Success Of Voluntary Compliance Scheme
Since its introduction in 2022, the option to file updated ITRs (ITR-U) up to two years after the relevant assessment year has proven highly effective.
The scheme allows taxpayers to pay additional taxes and file updated returns, boosting voluntary compliance across the country.
From AY 2021-22 to 2024-25, taxpayers filed 9.176 million updated ITRs, contributing an extra Rs 9,118 crore in taxes.
Minister of State for Finance, Pankaj Chaudhary, informed Parliament that the scheme has seen increasing participation and success.
Updated Returns In Current Assessment Year
In AY 2024-25, the government received 464,000 updated ITRs by February 28, raising Rs 431.20 crore in taxes.
This demonstrates the continuing impact of the updated ITR filing scheme.
With this, the government has proposed to extend the time limit for filing updated returns from two years to four years. This move is part of the Finance Bill 2025.
Breakdown Of Additional Revenue From ITRs
- AY 2023-24: 2.979 million ITRs were filed, yielding Rs 2,947 crore in additional taxes.
- AY 2022-23: 4.007 million ITRs filed, bringing in Rs 3,940 crore.
- AY 2021-22: 1.724 million ITRs filed, contributing Rs 1,799.76 crore in additional taxes.
These figures reflect a steady increase in participation and revenue generation through the updated ITR scheme.
Government Promotes Digital Payments
The Minister informed Parliament that the Union Cabinet approved the ‘Incentive Scheme for Low-Value BHIM-UPI Transactions (P2M)’ for FY 2024-25.
This initiative encourages small merchants to adopt UPI (Unified Payments Interface) and boosts digital payments, supporting the government’s broader goal of financial inclusion.
Encouraging Digital Transactions Through MDR Support
The government’s efforts to promote digital payments align with its broader strategy for financial inclusion, offering a wide range of payment options to citizens.
The Merchant Discount Rate (MDR), which is a fee that merchants pay for processing digital payments, plays a crucial role in this ecosystem.
For UPI P2M transactions, the National Payments Corporation of India (NPCI) sets the MDR at up to 0.30%. Since January 2020, the government has waived the MDR for the RuPay Debit Card.
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