What tax filings say about India’s consumption story

The rich getting richer appears to be true with the pace of increase in tax fi lings by high-income earners outstripping those with less than `5 lakh in annual income. This could benefit carmakers, insurers, mutual funds, jewellers, multiplexes and hospitals, says BNP Paribas in a note.

Income tax filers with income above Rs 10 lakh have grown 20% between 2012 and 2021 vs 4.5% for those with less than Rs 5 lakh in income.

• The number of tax payers above Rs 5 lakh in earnings has risen to 29 million by 2021, from 5.6 million in 2012

• People with income of more than Rs 10 lakh has also surged to 8 million from 1.6 million

• The pandemic appears to have dented the earnings profile of the relative stragglers in the filing pyramid. While the number of those filing with incomes of Rs 20 lakh a year rose 25% over FY19, those in the `10-20 lakh bracket increased by 24%. But the number of those earning less than Rs 5 lakh declined 20%

• Sales of cars, requiring far greater discretionary expenditure than for twowheelers, rose 53% between 2012 and 2023. Motorcycle and scooter sales climbed 22%, reflecting the relative underperformance of stocks such as Hero MotoCorp