Income from capital gains zoomed 89% in pandemic year FY21
Income from capital gains reported by Indian taxpayers surged in the financial year 2020-21 (assessment year 2021-22), the year ravaged by the pandemic, while “salary income” of individuals grew at a much lower pace, as per the statistics released by the tax department recently.
In the year which saw the gross domestic product (GDP) shrink by 5.8%, the income reported as long-term capital gains stood at Rs 3.52 trillion, up 66.7% high on year, while income from short-term capital gains skyrocketed 166.7% to Rs 1.56 trillion, the data showed. The year-on-year rise aggregate income from capital gains was a whopping 89% in FY21.
While the income from salaries rose 5.6% on year to Rs 24.6 trillion in FY21, “business income”, the largest segment which represents the profits made by companies, LLPs and other establishments, too showed a healthy growth of 15.8% to Rs 33.8 trillion.
The tax department data reflects the relative buoyancy witnessed by the capital markets during the pandemic, and a structural shift in income from the household sector to the the large companies.
Meanwhile, 16 individuals in the country reported the annual salary income in the range of Rs 100-500 crore in assessment year 2021-22 (FY21) while 34 showed such income in the Rs 50-100 crore range. This was when salary income — the largest source of income among individual taxpayers — was shown as nil by 54% of the 67.6 million people who filed tax returns in that year.
In the assessment year 2020-21 (FY20), just 8 individuals had reported the highest salary income in the Rs 100-500 crore range, while 40 were in the bracket of Rs 50-100 crore.
As many as 163 individuals reported salaried income in the range of Rs 25-50 crore in FY21 as against 136 in FY20,
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