India’s Millionaires’ Club expands: No of taxpayers rise, Income disparity shrinks

The latest SBI Economic Research report sheds light on the shifting income landscape in India.

Millionaires’ Club expands

In a testament to India’s growing economic affluence, the number of millionaires have risen to 220,000 by Assessment year (AY) 2024 from 44,000 in AY 2014. That’s a fivefold increase in a decade.

According to the 2024 Hurun India Rich list, the country now boasts of 334 billionaires, a sharp rise from 75 a year before.

The number of Income Tax Returns (ITRs) filed also rose to 86 million in 2023 from 73 million in 2022. The report attributes progressive tax policies and simplified processes as the catalyst for this expanding tax base.

Income disparity shrinks

This growing tax base coincides with a drastic drop in income disparity, especially for earners up to Rs 5 lakh per annum. Lower-income groups have also registered strong growth rates through the decade.

The report highlights a trend towards more decentralised wealth creation in the country.

Meanwhile, the report has argued for a speedier review of the Income Tax Act. In order for the amended Act to be passed within the allotted 75 days, the report suggested that it be offered as a money bill. In addition to streamlining and simplifying the taxing procedure, this will promote inclusivity and economic progress.

Demographic trends

While UP, Bihar, AP, Punjab, and Rajasthan are gaining share in the incremental growth, states like Maharashtra, Delhi, Gujarat, and Karnataka, the traditional leaders in the income tax base, are approaching saturation. Maharashtra, Uttar Pradesh, Gujarat, Rajasthan and Tamil Nadu constitute 48 per cent of the total returns filed in AY24. Female taxpayers have also risen to 15 per cent of all taxpayers.