Over the past 10 years, under Prime Minister Narendra Modi’s leadership, the income tax burden on middle-class taxpayers earning less than Rs 20 lakh has decreased.
At the same time, the tax burden on individuals earning more than Rs 50 lakh annually has increased.
Increase in High-Income Taxpayers
According to data from income tax returns, the number of taxpayers earning more than Rs 50 lakh annually has grown significantly.
In 2013-14, only 1.85 lakh taxpayers fell into this category. By 2023-24, that number had risen five times to 9.39 lakh.
The tax paid by these high-income earners has also increased. In 2014, those earning above Rs 50 lakh paid an average tax of Rs 2.52 lakh, which has now risen to Rs 9.62 lakh in 2024.
Middle-Class Relief and Tax Evasion Crackdown
The government is now receiving 76 percent of its income tax revenue from taxpayers earning over Rs 50 lakh.
This shift has relieved middle-class taxpayers, as their overall tax burden has decreased. Efforts to stop tax evasion
and measures introduced by the Modi government to combat black money have led to more high-income earners filing tax returns.
In the 2024-25 assessment year, around 8 crore income tax returns were filed, with 74 percent of these under the new tax regime.
Decreased Tax for Lower-Income Earners
When the Modi government first came to power, even individuals earning up to Rs 2 lakh annually were required to pay taxes.
However, due to deductions and exemptions introduced over the years, people with an annual income of up to Rs 7 lakh are now exempt from paying taxes.
The share of tax collected from those earning under Rs 10 lakh has decreased from 10.1 percent in 2014 to 6.22 percent in 2024.
For taxpayers earning between Rs 2.5 lakh and Rs 7 lakh, their tax liability in 2023-24 is Rs 43,000, which is just 4-5 percent of their total income—one of the lowest rates among emerging economies.
