Lakshadweep sees lowest share of zero liability income tax returns

Lakshadweep, which has the lowest number of income tax payers in the country, is also home to the lowest proportion of zero-liability returns filed. In contrast, Gujarat, the source of the second highest number of returns filed during the last financial year, also has the second highest number, and percentage, of zero-liability returns, next to Nagaland.

At an all-India level of the 7. 4 crore returns filed during the financial year 2022-23, a little under 5. 2 crore or around 70% had no tax liability.

The state-wise numbers shared in Lok Sabha put Maharashtra on top of the heap on both counts — over 1. 1 crore returns filed with nearly 74 lakh zero-liability ITRs. At the other end of the spectrum is Lakshadweep, where less than 40% or 1,761 returns of the 4,454 filed had zero liability. Gujarat saw 74. 5 lakh returns filed during the last financial year.
While taxpayers earning under Rs 2. 5 lakh in a financial year do not have to pay income tax, several individuals file returns as they have to claim refunds, say fortax deducted at source or just to have a record so that they can avail of a loan. Often, when an individual, who is a taxpayer, sees a fall in income below the threshold, a return is filed.
Besides, with standard deduction and exemptions the actual income required for paying taxes is now much higher.