Only 6.7% Filed ITRs: CoinSwitch Co-founder Explains Why Indians Delay Tax Filing

Only 6.7% of Indians filed their income tax returns (ITRs) in the previous year, a figure that raises concerns about digital tax participation in the country. This insight was shared by Ashish Singhal, co-founder of CoinSwitch, who emphasized the persistent gap between technological progress and taxpayer habits.

Last-Minute Filing Culture

Singhal noted that even those who do file — such as salaried individuals, startup employees, and law-abiding citizens — often treat the process as a last-minute emergency. This behavior reflects an underlying lack of preparedness and planning, despite a willingness to comply. Many Indians continue to scramble at the end of the financial year to gather documents and submit returns, which creates avoidable stress and inefficiency.

Digital Advancements vs Behavioral Lag

India has made remarkable strides in streamlining the digital tax filing process. From improved government portals to user-friendly forms and expanded online payment options, the infrastructure has evolved. However, these advancements haven't translated into better habits. Millions still wait until the deadline approaches, failing to take advantage of the tools available.

Singhal underscored this issue by saying, “Deadlines shift. Habits don’t.” While the system is becoming technologically smarter, it hasn’t become easier for users who still find tax compliance confusing or intimidating. This “low digital tax-participation,” according to him, is a blind spot that deserves urgent attention.

New Tax Regime, Same Old Habits

Although the new tax regime increases liquidity by offering lower tax rates, the question arises whether this change is promoting financial discipline. Singhal posed a critical question: are people using this extra money wisely, or just spending more recklessly due to lack of planning?

Experts argue that the solution lies not in pushing more aggressive ads or SMS reminders near deadlines, but in equipping people with tools that help them manage taxes year-round. Instead of treating tax season as a sudden obligation, it should be integrated into daily financial behavior.

Tech-Driven Solutions for Behavioral Change

Singhal advocates for digital infrastructure that goes beyond basic filing reminders. He recommends smart apps and platforms that offer document reminders, auto-fill personal data, and error checks. These tools would help make tax filing feel less like a chore and more like a regular habit — much like paying monthly utility bills.

He stressed, “We need tools that auto-remind, pre-fill, and validate. Nudges that turn filing from a chore into a habit. Products that treat tax compliance as a core loop, not a checkbox.”

Toward a Culture of Routine Compliance

The ultimate goal, Singhal emphasized, is to normalize tax compliance and embed it into everyday financial management. Tax season may come just once a year, but money management is a constant activity. Encouraging routine, simplified compliance would boost participation, reduce stress for individuals, and improve India’s overall financial ecosystem.

In summary, the key takeaway is that while digital platforms have evolved, the real challenge lies in changing behaviors. India needs a cultural shift from last-minute tax panic to year-round readiness, driven by intelligent, user-friendly tools. This shift could significantly enhance tax compliance, benefiting both citizens and the broader economy.