In a finding that challenges common perceptions, Jharkhand has emerged ahead of Gujarat when it comes to middle-class incomes. Around 20% of Jharkhand’s taxpayers reported annual incomes between ₹12 lakh and ₹50 lakh, compared to just 7% in Gujarat. Even more striking, Gujarat did not feature in the top 10 states with taxpayers earning between ₹25 lakh and ₹50 lakh—a category led by Maharashtra.
Most Indians Earn Below ₹7.5 Lakh
The data underscores the modest scale of India’s middle class. The largest cluster of tax filers reported annual incomes in the ₹2.5 lakh to ₹7.5 lakh bracket. More than half of the middle class is concentrated here, with only 2.5% of taxpayers earning above ₹25 lakh annually. This highlights how thin the upper-middle-class layer remains in India’s economic pyramid.
Maharashtra Leads, Karnataka Produces More ‘Lakhpatis’
Maharashtra continued its dominance, with nearly 1.4 lakh taxpayers declaring incomes between ₹25 lakh and ₹50 lakh, the highest in India. Karnataka and Tamil Nadu secured the second and third spots respectively. Notably, Karnataka also produced the highest proportion of “lakhpatis,” with over 20% of its taxpayers earning between ₹12 lakh and ₹50 lakh. Surprisingly, Gujarat trailed even Bihar in this income category.
Delhi’s Taxpayer Density Sets It Apart
Maharashtra recorded the largest number of tax returns at over 46 lakh. However, Delhi stood out with the highest share of taxpayers as a proportion of its population. Nationally, only about 3% of citizens file taxes. Uttar Pradesh, India’s most populous state, fared below average, with just 1.5% of its people filing tax returns, despite being second in absolute numbers.
India’s Unequal Middle Class
The income-tax data paints a picture of a deeply unequal middle class across states. While Jharkhand and Karnataka are emerging with stronger proportions of higher earners, established economic hubs like Gujarat lag behind in this particular segment. Yet, the most telling reality is that the majority of middle-class Indians earn no more than ₹7.5 lakh annually, revealing how limited upward mobility remains for millions.
