As per data released by the Income Tax Department in December 2017, approximately what percentage of India's total population paid income tax in the assessment year 2015–16?

Introduction / Context:
Public finance and Indian economy sections in competitive examinations often include factual questions about the tax base and structure of the Indian tax system. One important indicator is the share of the population that actually pays income tax. The question refers to data released by the Income Tax Department in December 2017 for the assessment year 2015–16 and asks for the approximate percentage of the total population that paid income tax.

Given Data / Assumptions:

• The reference is the Income Tax Department data released in December 2017.
• The period is the assessment year 2015–16.
• We consider the total population of India for that period.
• We look for the percentage of people who filed income tax returns or actually paid income tax.

Concept / Approach:
The percentage of population paying income tax is typically quite small because a large portion of the workforce operates in the informal sector, many individuals earn below the taxable threshold, and agricultural income is largely exempt. Official data and reports from that time highlighted that only a small fraction of the total population fell within the direct tax net. The widely cited figure for AY 2015–16 is about 1.7 percent of the total population paying income tax.

Step-by-Step Solution:
1. Recall that the question is asking for a factual figure based on official data, not a calculated value.2. Note that the Income Tax Department's analysis for AY 2015–16 reported that the number of effective income tax payers was a small fraction of the population.3. The commonly reported share is around 1.7 percent of India's population paying income tax in that year.4. Compare this figure with the options given and identify Option A, 1.7 percent, as the correct match.5. Therefore, the approximate percentage of population paying income tax is 1.7 percent.

Verification / Alternative check:
To understand why the proportion is so low, consider the structure of the Indian economy. A significant portion of workers are in agriculture and informal sectors where incomes are low or not reported. Many small businesses are not in the formal tax net. In addition, the taxable threshold excludes a large number of low income earners. When the total number of effective tax payers is divided by India's large population, the resulting percentage is inevitably small. This reasoning supports the plausibility of a figure below 2 percent rather than one of the higher percentages listed.

Why Other Options Are Wrong:
Option B: 5.7 percent would imply more than three times the officially reported fraction and does not match the referenced data.
Option C: 9.7 percent is even higher and unrealistic given the structure of employment and incomes in India.
Option D: 11.7 percent greatly overstates the direct tax base and contradicts the findings emphasized in public discussions at that time.
Option E: 0.7 percent is too low and does not correspond to the widely cited official estimate for AY 2015–16.

Common Pitfalls:
Examinees may be tempted to choose a higher percentage because they confuse the share of tax payers in the working population with the share in the total population. Remember that the question explicitly refers to total population, including children, non workers, and those outside the tax net. It is also easy to misremember the exact figure, so it helps to associate this statistic with the common observation that only about one to two percent of the population were direct income tax payers at that time.

Final Answer:
Approximately 1.7 percent of India's total population paid income tax in the assessment year 2015–16.