One in three Indian taxpayers now reports income above Rs 20 lakh: ClearTax

India’s high-income taxpayer base is expanding, with the share of individual taxpayers reporting annual gross income above Rs 50 lakh nearly doubling over three years, pointing to a growing number of Indians moving into higher income brackets.

According to ClearTax’s annual report, ‘How India Filed in 2026’, 8% of self-filers reported gross income exceeding Rs 50 lakh in assessment year (AY) 2026-27, compared with 4.5% in AY 2023-24.

The proportion increased to 5.6% in AY 2024-25 and 7.3% in AY 2025-26 before reaching 8% in the latest assessment year.

The expansion is also visible in the broader upper-income segment. The share of taxpayers reporting annual gross income above Rs 20 lakh increased to 30.5% in AY 2026-27 from 22.5% in AY 2023-24. This means nearly one in three self-filers now reports annual income above Rs 20 lakh.

Key points:

India’s household wealth is growing, and the tax base shows it clearly. Among self-filers, 8.0% reported gross income above ₹50 lakh in AY 2026-27, against 7.3% in AY 2025-26
5.6% in AY 2024-25 and 4.5% in AY 2023-24. That share has nearly doubled in three years.
The group earning above ₹20 lakh moved from 22.5% to 30.5% over the same period.

“More people are crossing into the higher brackets each year, and they are doing it while also reporting investment and business income alongside what they earn,” said ClearTax in a note.

Multi-asset filing is no longer limited to top earners

Investment income increasingly contributes to earnings

The rise in higher-income taxpayers comes against the backdrop of increasing diversification of income sources.

Nearly 47.3% of self-filers reported income from at least one source outside employment in AY 2026-27, compared with just 9.5% in AY 2022-23.

These sources include investments, business, freelancing and cryptocurrency-related income.

The share of taxpayers reporting two or more such non-salary income sources also increased sharply, from 3.5% to 24.4% over the same period.

Capital gains are becoming a more significant component of reported income. The proportion of self-filers reporting capital gains increased to 41.7% in AY 2026-27 from 34.4% in AY 2025-26 and 25.5% in AY 2024-25.

The report also highlights a growing shift towards more complex income tax filings. Returns beyond the basic salary-focused ITR-1 accounted for 62% of ClearTax filings in AY 2026-27, compared with 53% in AY 2025-26 and 40% in AY 2024-25.

ITR-2 and ITR-3, which cover taxpayers reporting capital gains and business or professional income, together accounted for 57.2% of filings in AY 2026-27, against 48.1% in the previous year.

Middle-income taxpayers also report more complex income

The growing complexity of income reporting is not restricted to higher-income households.

Nearly half of taxpayers in the Rs 5 lakh-Rs 10 lakh gross income bracket filed complex returns in AY 2026-27, compared with 36.2% in the previous assessment year.

Their share increased to 49.6%, a rise of 13.4 percentage points in just one year, the sharpest increase among all income groups.

Complex returns include ITR-2, ITR-3 and ITR-4, which cover taxpayers with income from capital gains, business or profession and other sources beyond basic salary income.

The report points to growing participation in stock investments, trading, freelancing and side businesses as factors contributing to this trend.

Women make faster gains in higher income brackets

The report also highlights an increase in women’s representation in higher income categories.

Among women filers, those earning above ₹50 lakh rose from 3.7% in AY 2025-26 to 5.1% in AY 2026-27, a relative increase of 38%.

The share of women self-filers reporting annual income above Rs 50 lakh increased from 3.7% in AY 2025-26 to 5.1% in AY 2026-27, a relative increase of 38%.

Among men, the corresponding share increased from 9.6% to 12.2%, representing growth of 27%.

For the Rs 20 lakh-plus income category, the share of women filers increased 23% over the year, compared with 12% among men.

However, the gap in income distribution remains significant. In AY 2026-27, 27% of women self-filers reported income above Rs 20 lakh, compared with 42% of men.

Peak earning years remain between 40 and 50

Age-wise data shows that taxpayers between 40 and 50 account for the largest proportion of high earners.

Around 44% of self-filers in this age group reported gross income above Rs 20 lakh in AY 2026-27. This compared with 38% among those aged 35-40, 36% in the 50-60 age group and just 9% among taxpayers above 60.

However, older taxpayers continue to report investment income even after their regular earning years.

Around 40% of taxpayers above 60 reported capital gains in AY 2026-27, compared with 35% among those aged 40-50.