The fact that Indians comprise four of the world’s 10 richest people according to Forbes magazine, seems to be reflection of the growing number of millionaires in India.
The country boasts of 5.79 lakh individual millionaires in 2006-07 a sharp contrast to the mere 88,000 individuals earning over Rs 10 lakh in 2002-03.
The figure is almost equal to and in some cases more than the entire population of countries like Luxemburg and Cyprus. Meanwhile, non-corporate assessees with income between Rs 2 lakh and Rs 10 lakh amounted to 27.87 lakh and while about 273.3 lakh people reported income less than Rs 2 lakh in 2006-07 according to the report by the Comptroller and Auditor General (CAG) of India tabled in Parliament on Tuesday.
As a sign of the India Inc’s growing power, corporate assessees too have risen from 3.65 lakh in 2002-03 to 4 lakh in 2006-07. 68,000 companies have also reported income of more than Rs 10 lakh during 2006-07.
However, the number of companies with income between Rs 50,000 and Rs 10 lakh have shrunk to 1.25 lakh during the period as compared to 1.29 lakh in 2002-03. On the whole non corporate assessees add up to 98.73% while corporates account for a mere 1.27% in 2006-07.
However, the income tax department has some food for thought. The number of taxpayers in the country has risen to 3.13 crore in 2006-07 from 2.85 crore in 2002-03, at a compound annual growth rate (CAGR) of 2.4%. While this is likely to please the taxmen mightily, the growth rate is lower than the 3.24% rise in taxpayers clocked during 2001-02 to 2005-06.
With India’s population at over 110 crore, a majority of which is joining the workforce, the decline in the CAGR of assessees may be a pointer towards higher tax evasion despite the prevailing view that compliance has increased.