The government has increased actions to reduce tax evasion and boost compliance via stricter reporting rules, data monitoring and technology-based verification. The number of income-tax return filers grew by nearly 24 percent over five years.
A written reply by the Minister of State for Finance in the Lok Sabha on Monday showed that income-tax return filers rose from 6.96 crore in 2021-22 to 8.67 crore in 2025-26. This represents an absolute increase of 17,046,901 filers over the period.
To stop fraudulent GST claims, identify under-reported income and improve traceability of tax transactions, authorities introduced several steps.
On the direct tax side, PAN quoting was made mandatory for certain transactions and PAN-Aadhaar linking was required. The Annual Information Statement was expanded to give taxpayers details on income, financial transactions and tax payments for each year. Officials noted that greater transparency helps identify cases of under-reporting.
The Income Tax Department used its NUDGE campaign to prompt taxpayers to revise returns. Participants receive SMS and email messages encouraging them to file updated returns disclosing previously unreported income.
The minister referred to the Black Money Act of 2015, which targets undisclosed foreign income and assets. The Benami Transactions Act was updated in 2016 to allow seizure of benami property and prosecution of both benamidars and beneficial owners. Cash receipts of two lakh rupees or more were also banned except through approved electronic channels.
Under GST, the Invoice Management System was launched in 2024. It lets recipient taxpayers accept, reject or hold supplier invoices and helps businesses verify invoices before claiming input tax credit. Two nationwide operations in 2023 and 2024 targeted fake registrations and fraudulent credit claims, including physical checks of business sites. Additional steps include e-invoicing, biometric Aadhaar checks for registration and sequential filing of returns.
Net direct-tax collections increased from 14.12 lakh crore rupees in 2021-22 to 23.40 lakh crore rupees in 2025-26. Net indirect-tax collections rose from 12.90 lakh crore rupees to 16.72 lakh crore rupees over the same span. GST-related revenue grew from 3.33 lakh crore rupees in 2017-18 to 9.81 lakh crore rupees in 2024-25.
