New Delhi: A new report has revealed that income disparity coverage for those earning up to Rs 5 lakh in India has declined cumulatively by 74.2 percent. This significant shift, a testament to the government’s continuous efforts, is reaching the bottom of the pyramid and increasing the income of ‘lower income group’ people, instilling a sense of optimism in the economic landscape.
The economic department of the State Bank of India (SBI) compared disparities in income during assessment years (AY) 15 and AY24 and showed a clear rightward shift in the income distribution curve in India, signifying that people in lower income brackets are increasing their income to converge towards their share of the population.
“Declining income inequality mirrors upward transition of lower-income people along with their income, as 43.6 per cent individual ITR filers, belonging to income group of less than Rs 4 lakh in AY15 (FY14), have left the lowest income group and shifted upwards,” the findings showed.
Also, 26.1 per cent of the gross income of lowest income group of lower than Rs 4 lakh has shifted upwards in the intermittent period, the study noted.
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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 the progressive taxation regime, the contribution of direct taxes to total tax revenue reached 56.7 percent in AY24 (54.6 percent 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 per cent against CIT’s 3 per cent 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 percent of these returns, were filed on or before the due date. The concomitant result was that the share of returns filed after the due date (with fine) declined from a high of 60 percent in AY20 to merely 21 percent in AY24.
“We believe the total number of ITRs filing for AY25 could swell more than 9 crore by the end of March 2025 (7.3 crore ITRs have been filed by the due date) while inculcating more discipline amongst the filers,” said the SBI study.
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–IANS
