The State Bank of India has released a report titled ‘Deciphering Emerging Trends in ITR Filing: The Ascent of the New Middle Class in Circular Migration, in which it has mentioned that the two main reasons for the growth in the income of the Middle Class are:
- First and foremost, a number of taxpayers have transitioned from the lower-income group to the upper-income group
- There has been a significant dip in the number of return filers with zero tax liability
Surge in the number of those filing the Income Tax Returns
The misleading claims made by the opposition parties with regard to the PM Modi-led government doing little for the middle class have been exposed in the SBI Report.
In 2012, the total number of people who filed the income tax return was 21 lakhs, and this number has increased to 78 lakhs in 2023.
The SBI report has stated that the manifold increase in those who filed income tax returns is primarily due to the fact that income tax return filing has also become easy, and secondly, there has been a surge in the income of people.
Also, there has been a significant decline in zero-tax liability in the past 10 years.
SBI Report
Increase in the weighted income of the Middle Class
Based on the income tax returns that have been filed, the weighted mean annual income of the Indian Middle Class rose from Rs 3.3 lakh per annum in 2013 to Rs 13 lakh per annum in 2023. This shows that during the two terms of PM Narendra Modi led government, the middle class has a reason to smile.
Transition of Lower Middle Income Class to Middle and Upper Class in past 10 years
The State Bank of India, in its report, has mentioned that the Rs 5 lakh income slab has decreased by 13.64 percent and Rs 5 – 10 lakh slab has increased by 8.13 percent.
Ease in Filing Tax Returns
The option given by the Indian government to the taxpayers to choose between the old tax or the new old tax regime played a pivotal role in increasing the number of people who had filed the tax.
Top five states which have filed the ITR
The State Bank of India, in its report, has mentioned the names of the top five states which accounted for 48 percent of the ITRs which have been filed for FY22. These five states are:
- Maharashtra
- Uttar Pradesh
- Gujarat
- Rajasthan
- West Bengal
North-Eastern States witness a jump in the filing of ITRs
The north-eastern states of Manipur, Mizoram, and Nagaland saw an increase of at least 20 per cent jump in ITRs filed.
Increase in workforce will result in more number of taxpayers
The State Bank of India Report has stated that in India, the workforce will increase from 530 million in FY23 to 725 million by FY47. This will pave the way for the rise in the number of those who will file the tax. This number is likely to go up from 70 million in FY23 to 482 million by FY47.
Suggestions put forward in the SBI Report
In an endeavour to take things forward, the SBI report has called for capturing the socio-economic and cultural characteristics of the migrant workforce by using the data. The report has put forward that the income tax returns could be used for getting such information such as place of work, place of permanent residence and place of domicile. Also, provisions should be made to file income tax returns in multiple languages.
