There has been a cumulative 74.2% decline in income disparity coverage for those earning up to ₹5 lakh in India, showing that the continuous efforts of government are reaching the bottom of pyramid, leading to increase in income of ‘lower income group’ people, a new report has revealed. 

A comparison of disparity in income during assessment year (AY)15 and AY24 by the economic department of the State Bank of India (SBI) showed that there is a clear rightward shift in the income distribution curve in India, signifying people in lower income brackets are increasing their income to converge towards their share in population.

“Declining income inequality mirroring upward transition of lower income people along with their income is evident as 43.6% individual ITR filers, belonging to income group of less than ₹4 lakh in AY15 (FY14), have left the lowest income group and shifted upwards,” the findings showed.

Also, 26.1% of the gross income of the lowest income group of lower than ₹4 lakh has shifted upwards in the intermittent period, the study noted.

Female Labour force participation is on the rise (from 23.3 in 2017-18 to 41.7 in 2023-24), with Jharkhand, Odisha, Uttarakhand, Bihar and Gujarat fanning the maximum movement.

With an increasing alignment with progressive taxation regime, contribution of direct taxes to total tax revenue reached 56.7% in AY24 (54.6% in AY23) — the highest in 14 years.

The growth rate of personal income tax (PIT) collections has been surging faster than corporate tax collections since FY21, with PIT increasing by 6% against CIT’s 3% growth, the SBI study noted.

ITRs filed during AY24 witnessed a phenomenal jump, standing at 8.6 crore (against 7.3 crore in AY22). A total of 6.89 crore or 79% of these returns were filed on or before the due date, the concomitant result in the share of returns filed after due date (with fine) thus declining from a high of 60% in AY20 to merely 21% in AY24.

“We believe the total number of ITRs filing for AY25 could swell more than 9 crore by end March 2025 (7.3 crore ITRs have been filed by the due date) while inculcating more discipline amongst the filers,” said the SBI study.

(This story was taken from a syndicated feed, and edited only for style by Gujarat Samachar Digital staff)

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