Sum of gross incomes of companies in the slab above Rs 1 crore shot up by 48% — from Rs 7 lakh crore in 2013-14 to Rs 10.4 lakh crore in 2014-15, data on income tax returns for assessment year 2015-16 (AY16) show. In the same period, growth in the number of assessees in the top slab was 19 per cent. This upward growth comes from a lower base. Sum of incomes in the top slab had dropped by 10% in AY15. Corporate incomes in the lower slabs (up to Rs 10 lakh) show a decline in AY16 from Rs 5,060 crore to Rs 4,660 crore. The number of assessees, too, show a decline from 243,000 to 214,000 (see chart 1). However, individual incomes in the top slab — Rs 1 crore and above — fell 25% from Rs 2 lakh crore to Rs 1.5 lakh crore, despite the 23.6% rise in number of assesses from 48,400 to 59,300. Individual incomes in the lowest and tax-free income slab — up to Rs 2.5 lakh —dropped with the highest degree, 43%, from Rs 2.6 lakh crore to Rs 1.5 lakh crore in AY16. The number of assesses too reduced 40% (see chart 2).
This was matched by a similar rise in number of assessees and individual incomes in the next income slab, Rs 2.5 lakh to Rs 5 lakh. Number of assesses in this slab rose 55%, and the sum of incomes in this slab rose from Rs 4.8 lakh crore to Rs 7.3 lakh crore, a substantial increase of 51%.Similarly, trends in salary incomes too show a change. Lower income slabs showed a higher income growth than upper income slabs till AY 2014-15. In AY 2015-16, higher income slabs registered a higher growth than peers in lower income slabs (see chart 4). Looking deeper into more detailed tax brackets yield some interesting insights into income growth in India. Till AY 2014-15 (FY 2013-14), business incomes in lowest slabs-up to Rs 2 lakh-showed negative growth, those from Rs 2 lakh to Rs 100 crore showed positive growth, while those above Rs 100 crore were going down year on year. Come AY 2015-16, reported incomes through business activities in the slab Rs 500 crore and above rose by 57% in FY 2014-15. This has come in consonance with an equally improved compliance growth of 67%. Growth in incomes in the top most slabs have increased substantially compared to (a) previous two years and (b) lower income brackets (see chart 3).