Income inequality has declined in India with a higher tax base and a shift in taxpayers from lower income to higher income tax bracket, the Economic Research Department of the State Bank of India said in a report released Monday. Terming the claims of K-shaped recovery as “prejudiced” and “ill-concocted”, the report also cited the transition of small firms into larger firms and consumption trends such as the rising trend of ordering from food ordering platforms such as Zomato of being indicative of “vanishing inequality”.
About 36.3 per cent of taxpayers have moved from lower income to higher income tax bracket resulting in 21.3 per cent additional income, the report said adding that the top 2.5 per cent of taxpayers’ contribution in income declined from 2.81 per cent in FY14 to 2.28 per cent in FY21. The income-tax returns (ITRs) filed by individual taxpayers earning between Rs 5 lakh and Rs 10 lakh, climbed by 295 per cent between the assessment years (AY) 2013–14 and AY 2021–22, showing a positive trend of migration to a higher range of gross total income, the report said.
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