The number of income tax e-filings dropped for the first time in recent years in 2018-’19, falling by more than 6.6 lakh, PTI reported. The number declined from 6.74 crore in 2017-’18 to 6.68 crore, data from the Income Tax department showed.

E-filings had been rising at an average of 25% each year in 2015-’16, 2016-’17 and 2017-’18, according to The Financial Express.

In its April report, analysis agency Kotak Economic Research said: “Tax filings have surprisingly plateaued in FY19. This is surprising given that post-demonetisation it was expected that the tax base would continue to increase.”

Increasing the tax base was one of the government’s justifications for demonetising high-value currency notes in November 2016. While the number of e-filers reduced, that of registered filers increased by 15% to 8.45 crore as on March 31, 2019. In 2017, the number of registered filers was 6.2 crore.

The number of e-filings in 2016-’17 was 5.28 crore. The ratio of actual filings to registered filers was 79% in 2018-’19, down from 91.6% in the previous year.

Kotak’s report said the reduction in e-filings “does beg the question whether compliance was weaker in the latter part of FY19 given that the number of registered filers has continued to see steady growth”.

“If compliance has been weak, the new government will aim at increasing the filings and collections in FY20,” the report said. “A focused utilization of the data on deposits during demonetization could yield better compliance, especially in the higher income brackets.”