New Delhi
India has seen a significant 74.2% reduction in income disparity for individuals earning up to Rs 5 lakh since the assessment year (AY) 2015. This decline reflects the government’s ongoing efforts to uplift the lower income groups, resulting in increased earnings for those at the bottom of the economic pyramid, a report said on Saturday.
According to an analysis by the State Bank of India (SBI), there is a noticeable shift in the income distribution curve, suggesting that people in lower income brackets are making gains that align more closely with their population share. The study revealed that 43.6% of individual income tax return (ITR) filers earning less than Rs 4 lakh in AY 2015 have moved up the income ladder.
Additionally, the report highlights a rise in female labor force participation, climbing from 23.3% in 2017-18 to 41.7% in 2023-24, with states like Jharkhand, Odisha, and Gujarat leading this trend.
With a growing focus on progressive taxation, direct taxes now contribute 56.7% of total tax revenue, the highest level in 14 years. Personal income tax collections have outpaced corporate tax growth, with a notable increase of 6% in personal income tax since FY 2021.
In AY 2024, ITR filings surged to 8.6 crore, up from 7.3 crore in AY 2022. Around 79% of these returns were submitted by the deadline, a significant improvement from previous years. SBI predicts that ITR filings for AY 2025 could exceed 9 crore, indicating a growing trend toward timely compliance among taxpayers.
