India · per adult 2022-23 · Union Budget FY 2025-26

Income, tax & the shape of inequality

Six views of the same story — the K-shaped split, what each class earns and pays, the parade of dwarfs and giants, where the tax comes from, who pays it, and how the mix has shifted over time.

Since the 1980s, liberalisation split India's income into a K — the top pulling away while the bottom half slid. The three cards below show, per adult, how far each gap has stretched.

Top 1% Top 10% Bottom 50% — share of national income —
Top 1% : Bottom 50%~13× → ~75×per adult · 1982 → 2022
Top 10% : Bottom 50%~6× → ~19×per adult · 1982 → 2022
Top 1% vs Top 10% — within-elite~2× → ~3.9×per adult · 1982 → 2022

How can Top 1% : Top 10% be > 1 if Top 1% ⊂ Top 10%? These are per-person averages, not aggregate totals. The top 1% person earns ₹53L on average; the top 10% person earns ₹13L on average — because the 9 crore adults in the 90th–99th percentile dilute the top-10% figure far below the top 1%'s average. In aggregate the top 1% holds less (22.6%) than the full top 10% (57.7%), exactly as you'd expect from a subset.

Globalisation's split: per adult, a top-1% Indian earned ~13× a bottom-50% Indian in 1982; by 2022 it was ~75×. Almost all of the widening came after the 1991 reforms.

The same split in wealth — share of national wealth, 1981 → 2022

Top 1% Top 10% Bottom 50%
Wealth is even more lopsided: the top 1% went from ~13% of all wealth to 40.1%, the top 10% to ~65% (two-thirds of everything), while the bottom half fell to 6.4%. Every group owns a more extreme share than it earns.

Each band is mutually exclusive (no double-counting). Two stories: aggregate — the total slice each group holds over time; per capita — how much each person in that group has vs the national mean.

Top 1% Next 9% (1–10%) Middle 40% (10–50%) Bottom 50%

Income shares over time — anchor years; linear interpolation between

Wealth shares over time — AIDIS survey anchors 1961–2022

Per capita over time — each group's average vs the national mean ─ income   ○ wealth 2022

The two lenses diverge: in aggregate the middle 40% holds more income than the top 1% (27.3% vs 22.6%) — but per person the top 1% earns 22.6× the mean while the middle 40% earns 0.68×. Most striking: the middle 40% per-capita income was above the mean in 1982 (1.16×) and has since fallen below it.

¹ Groups are disjoint (mutually exclusive) bands by percentile. Per-capita = (group's income/wealth share ÷ group's population share) × national mean.

² Wealth data from All India Debt & Investment Survey (AIDIS/NSSO); income data from WID.world combining NSSO + tax tabulations + national accounts (Bharti, Chancel, Piketty, Somanchi 2024). Points between anchor years are linearly interpolated.

Income axis
Rank axis
Evasion
Class overlay
Income Income tax due

Reading the chart: each row shows one income group. The bar length = the group's average annual income per adult — not a bracket floor or ceiling; ranges within each group are very wide. ₹1 lakh = 1 metre height. The dark inner shade = income tax due; red = estimated evadable portion (capital income × evasion rate).

Where do you stand?

¹ Income values are group averages (WID.world 2022-23 per-adult estimates) — not bracket boundaries. E.g. "Top 1%" avg ₹53L covers a range from ~₹40L to hundreds of crores.

² Tax computed on FY2025-26 slabs: ₹0-4L@0%, 4-8L@5%, 8-12L@10%, 12-16L@15%, 16-20L@20%, 20-24L@25%, 24L+@30%; rebate for income ≤₹12L; surcharge 10%/>₹50L, 15%/>₹1cr, 25%/>₹2cr; 4% cess throughout.

³ India classes: PRICE/ICE360 (2020-21 household income thresholds — note these are per-household, not per-adult). Global classes: Pew Research Center global income tiers (fixed in 2011 US PPP prices — the rupee equivalent shifts each year with India's inflation, so a ₹95k threshold in 2011 corresponds to higher rupees in 2022 after ~5-6%/yr CPI inflation; values shown are approximations at 2022-23 price levels using ₹26/int'l$).

⁴ Evadable income: Ram Singh (2025), "Do the Wealthy Underreport Their Income? Using General Election Filings to Study the Income–Wealth Relationship in India," Review of Income and Wealth, 71(2), May 2025. Singh is Director, Delhi School of Economics and External Member of the RBI Monetary Policy Committee. Data: Lok Sabha election affidavits (sworn statements), Forbes India list, and CBDT income-tax returns. Finding: total reported income of the wealthiest 0.1% of families is only ~2% of their wealth; for Forbes-listed families, >90% of capital income goes unreported.

Jan Pen's parade: the whole adult population walks past in one march, each person's height set by their income (₹1 lakh = 1 metre). For almost the entire walk you see waist-high figures — the giants appear only in the final stretch.

Height scale
March pace
Watch the last second (linear mode). ~99% of the march is short figures; the top 1% rockets past and the top 0.01% goes kilometres off-screen. Try Log height — everyone becomes visible at once. Try Log pace — the march slows proportionally in income-space, giving each income order-of-magnitude equal screen time.

¹ Height set to ₹1 lakh = 1 metre (linear mode). Log mode: height ∝ log₁₀(income) — compresses extreme values so the full distribution fits on screen. ² Pace: linear = equal time per percentile rank; log = equal time per income order of magnitude, so bottom earners (₹30k) to mid earners (₹300k) to top earners (₹30L+) each get ⅓ of march time.

Read the blue wedge: income tax ~33% of central tax; inside it the slimmest shade (>₹50 L earners) is ~76% of all income tax. GST+excise+customs (warm slices) are indirect — paid by every consumer.
The mismatch: the ₹50 L+ group is ~1.4% of taxpayers but pays ~76% of income tax; under-₹10 L are ~80% of filers yet ~6%. Only ~2–3% of Indians pay any income tax — everyone pays GST.

Share of the Centre's gross tax revenue by head, from Independence to today. Indirect taxes — customs and excise — bankrolled the early Republic; the 1991 reforms slashed tariffs, and GST (2017) swallowed excise and service tax. Pre-2000 splits are approximate; recent years are firm (CBDT / Budget).

Income tax Corporate GST Service tax Union excise Customs
From customs to compliance: in 1951 customs + excise were ~two-thirds of central tax; today direct taxes (income + corporate) are ~59%, GST ~27%, and customs barely 6%. The state shifted from taxing trade and factory output to taxing incomes and consumption.

The top 1%'s income share across a century, now with the bottom 50%'s share on the same axis. They crossed paths around 2005 — for the first time, the top 1% (by headcount 92 lakh) took a larger share than the bottom half (46 crore).

Top 1% income share Bottom 50% income share British Raj peak, top 1% (~21%)
More unequal than the Raj: the top 1% took ~13% of income in 1922 and ~20–21% at the colonial peak (1930s–40s). It fell to 6.1% by 1982, then rose to 22.6% in 2022–23 — the highest since the series began in 1922, and above the colonial high. That is why the authors call today's "Billionaire Raj" more unequal than the British Raj.

Sources: incomes & shares — World Inequality Lab (2024), per adult 2022–23. Tax due — FY 2025–26 slabs. Evadable (illustrative) — tax × hideable capital-income share, scaled to Ram Singh (2025). Tax-source split — Union Budget 2025–26. Income-tax-by-class — CBDT (Nov 2024). Tax-mix-over-time — CBDT/Budget anchor years (2014: PIT 21%/CIT 35%; ~2021 crossover, CIT 22.5% low; 2024 PIT 28%/CIT 26%; 2025-26 PIT ~34%/CIT ~25%; GST Centre ~27%). Parade income-by-percentile is illustrative.