According to latest data from tax-filing platform ClearTax, 76% of taxpayers under 25 now file complex income tax returns, representing a dramatic increase from just 14% in AY 2022-23. This shift reflects a fundamental change in how young Indians approach financial planning, with many managing multi-layered incomes driven by investing, trading, and freelancing from their very first tax return. The data, based on returns filed till July 20 for Assessment Year 2026-27, shows that retail investing has become mainstream as 39% of taxpayers report capital gains, compared with only 9% four years ago, with this figure already exceeding the full-year level recorded in AY 2025-26.
For the first time, taxpayers relying solely on salary income have fallen below half of all filers. Only 42% of returns filed through ClearTax this year reported salary as the only source of income, down from 82% in AY 2022-23. This represents a fundamental shift in India's financial landscape, with multiple income streams increasingly becoming the norm rather than the exception. The diversification trend extends across all age groups, with 26% of taxpayers now reporting business income, up from 4% in AY 2022-23, indicating rapid expansion of freelancing, consulting, content creation, and self-employment alongside traditional salaried work. As per ClearTax, this shift reflects the rapid growth of freelancers, content creators, consultants and active traders, prompting the government to introduce dedicated tax reporting categories for these professions.
The income diversification trend extends beyond young taxpayers to older demographics. Among senior citizens, 53% now file complex tax returns, compared with 28% four years ago. Notably, the proportion of senior citizens reporting capital gains has nearly tripled from 15% to 42%, indicating that many retirees are actively managing investment portfolios rather than relying solely on pensions or annuities. This suggests that diversified income sources are becoming mainstream across all age groups in India's evolving financial ecosystem.
The data reveals a significant expansion of India's higher-income taxpayer segment. About 32% of returns filed this year report gross income exceeding ₹20 lakh, compared with 22% in AY 2023-24. This growth is driven by stronger investment income, business earnings, and diversified sources of income. The trend is expected to continue as more taxpayers file returns before the extended August 31 deadline for ITR-3 filers, with capital market participation and diversified income streams creating a growing base of higher-income taxpayers.
According to Archit Gupta, Founder and CEO of ClearTax, the 2026 filing trends show a major turning point for financial India. He noted that taxpayers are no longer just salaried earners collecting standard deductions but are active investors, traders and wealth creators. The data indicates that tax filing is evolving from a compliance exercise into an important part of wealth management as financial lives become more complex, with the trend pointing to a rising affluent taxpayer base driven by stronger investment income and entrepreneurial activities. As capital gains and equity participation become mainstream, tax filing is now a core part of wealth management rather than a simple compliance activity.
