Nearly 10 per cent of taxpayers took no advantage of the Section 80C deductions. Only 55 per cent of taxpayers fully utilised the Rs 1.5 lakh deduction limit, with another 10 per cent claiming the deductions between Rs 1 to Rs 1.5 lakh.
Read More: How to check notice in the income tax portal
More than 85 per cent of taxpayers are still continuing to opt for the Old Tax Regime over the New Tax Regime, according to a trend report from the online tax filing platform Clear (formerly ClearTax). Most taxpayers still opt for the old regime for its host of deductions though an increasing number are going for the newer regime due to the lower tax rates. The trend report was based on Income Tax Return (ITR) filing data from the platform’s 5 million registered taxpayers and over 1 million tax professionals.
Data from the Income Tax Department showed that a total of 6.77 crore ITRs were filed for AY 2023-24, which corresponds to the FY 2022-2023, by July 31, 2023. The total number of returns increased 16.1 per cent year-on-year.
Read More: ITR Refund Status Check: Here’s How To Know Your Income Tax Refund Status
Popular deductions and utilisation rates
Some other interesting trend regarding deductions under various sections of the Income Tax Department also came to light from the Clear report.
Nearly 10 per cent of taxpayers took no advantage of the Section 80C deductions. Only 55 per cent of taxpayers fully utilised the Rs 1.5 lakh deduction limit, with another 10 per cent claiming the deductions between Rs 1 to Rs 1.5 lakh. Another 17 per cent of taxpayers claimed up to Rs 50,000 deductions under Section 80C, as per the Clear ITR filing analysis.
Read More: What is Section 80D? What are the tax benefits of health insurance policies?
Around 50 per cent of users of Clear used the deductions for medical insurance under Section 80D and another 20 per cent of users took advantage of self-contributions towards the National Pension Scheme under 80CCD(1B), which provided an additional deduction of up to Rs 50,000.
Demographic split
According to the trend report, the majority of taxpayers, nearly 50 per cent, belonged to the age group between 31 and 40 years. The second largest demographic was individuals up to age 30 at 28 per cent. Those aged 41 to 50 counted comprised 16 per cent and those above 50 years constituted 7 per cent of the taxpayers, highlighted in the report. In terms of gender ratio, over 70 percent of the taxpayers were male.
