The contribution of high earners towards India’s personal income tax mop-up is rising at a fast pace. According to the latest income tax return (ITR) filing data, the number of individuals reporting annual income of over Rs 50 lakh has jumped from 1.85 lakh in FY14 to over 9.39 lakh in FY24—a five-fold surge in just a decade.
This stellar surge is not limited only to the number of high earners; their contribution towards the government’s income tax revenue has also seen rapid growth. From Rs 2.52 lakh crore in 2014, it has increased to Rs 9.62 lakh crore in 2024, marking nearly a fourfold increase.
According to media reports citing sources, 76 per cent of income tax collected in FY24 came from those earning above Rs 50 lakh per annum. This surge, as per the source quoted in these reports, is attributed to "strong anti-tax evasion and black money laws implemented by the Modi government."
Participative Tax Administration
A Mint report quotes an unnamed source who believes the change in the government’s approach towards tax collection has driven this revenue surge. The person said that “earlier the focus was more on enforcement, but today the focus is on sharing of information, and through sharing of information, nudging people towards compliance.” They added that the tax department’s work is now characterised as ‘participative tax administration,’ rather than enforcement.
Lower Tax Burden on the Middle Class
While the income tax contribution from high earners has increased significantly over the last ten years, the share of taxes paid by the lower and middle class has notably decreased. The latest income tax data shows the share of tax collected from individuals earning less than Rs 10 lakh has dropped from over 10% to 6.22% over the past decade.
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