Earning ₹25,000/Month? You're in India's Top 10%. Here's the Full Picture.

Most people who earn a decent salary in a Tier-1 city think of themselves as solidly middle class. Not rich by any means, but not struggling either. And yet, by one measure, they are among the wealthiest people in the country.

The reason this feels confusing is that there are two very different Indias when it comes to income — and your position in each one is wildly different.

The Bottomless Pyramid

Here is the stat that stops people mid-scroll: earning ₹25,000 a month is enough to be in India's top 10% of all workers.

This figure is derived from PLFS (Periodic Labour Force Survey) wage data, covering all workers — including the vast informal sector, agricultural labourers, daily wage workers, and the self-employed. Note: this threshold is based on PLFS 2019-20 data; given nominal wage growth since then, the current bar may be modestly higher, but no updated all-India formal estimate has been published. The direction is clear: when you include all 500+ million workers in India, the income distribution looks nothing like what urban India imagines.

The bottom 50% of Indians — roughly 70 crore people — earn an average of just ₹71,000 per year, according to the World Inequality Lab's 2024 India report. That is ₹5,917 a month. Less than what many urban professionals spend on a single dinner out.

Two Ways to Measure: All India vs. ITR Filers

Here is the critical thing to understand: which "India" you compare yourself to determines your rank entirely.

There are two distinct lenses:

• All India — 140 crore people, including informal workers and those with no declared income. This gives you the full population percentile.
• ITR filers — ~8–9 crore individuals who filed an income tax return. This is the formal, higher-earning slice of India. If you file an ITR, you are already in the top 6% of the entire country just by virtue of filing.

The thresholds are completely different depending on which lens you use:

ITR filer thresholds derived from live CBDT data via our Income Percentile Calculator. All-India figures from PLFS / World Inequality Lab. Note: all-India figures are estimates.

What CBDT Data Actually Shows

In FY 2023-24, 8.09 crore Indians filed an income tax return — officially 6.68% of the population, per the government's statement to Parliament. Of those, only about 2.59 crore actually had a positive tax liability and paid any income tax. That is under 2% of India's total population.

Here is how those 8 crore filers are distributed across income brackets:

Source: Live CBDT data via Income Tax e-Filing Portal (bracket distribution); ₹1 crore+ filer count from CBDT / SagInfotech FY25. Totals approximate ~9 crore filers.

Let that sink in: only 3.24 lakh individuals in all of India declared income above ₹1 crore in FY25. That is 0.023% of the population — roughly the capacity of three IPL stadiums, for a country of 1.4 billion people.

The Top 1% Illusion

Here is where it gets uncomfortable. A salary of ₹22 lakh per year — roughly ₹1.83 lakh per month — technically makes you India's top 1% among all citizens. And yet, if you live in Mumbai, Bengaluru, or Delhi, it almost certainly does not feel like you are among the wealthiest people in the country.

After paying 30% income tax, a Bengaluru EMI, school fees, and basic lifestyle costs, ₹22 lakh can feel like it barely covers the necessities. A CA who went viral in February 2026 called this exactly: "the top 1% illusion — you're statistically elite but financially squeezed."

The reason is urban cost of living. The national ₹22 lakh threshold is calculated across all 140 crore Indians, most of whom live in smaller cities or villages with very different cost structures. Locally, the picture is very different:

Source: IndiaDataMap, 2025. State-level estimates based on household income surveys.

The same salary makes you locally "top 1%" in Bihar but puts you well outside the top 5% in Delhi. Your percentile is not just about your income — it depends entirely on where you live.

Note: state-wise thresholds are modelled estimates derived from per capita NSDP and state-level income distributions (IndiaDataMap, 2025). These are not official CBDT state-level statistics.

The Tax Paradox: Who Actually Pays for India

Here is the angle that gets salaried professionals the most: for the first time in Indian history, personal income tax revenues overtook corporate tax revenues in FY21 — and the gap has been widening since.

In FY14, personal income tax was 38% of all direct taxes. By FY24, it was 53.4%. Salaried employees and professionals are now literally funding more of the Indian state than corporations.

And yet, agricultural income — even for wealthy farmers earning ₹25 lakh or more per year — is fully tax-exempt. A salaried employee at ₹25 lakh pays 30% marginal rate; a farmer earning the same amount pays zero. This is a structural feature of the Indian tax system that has been debated for decades.

India's Inequality in Numbers

India's income inequality has reached levels not seen since the colonial era. According to the World Inequality Lab's 2024 India report:

• The top 1% earn 22.6% of all national income — the highest share since 1922
• The top 10% earn 58% of all national income
• The bottom 50% earn only 15% of all national income
• India's inequality is now worse than Brazil, South Africa, and the United States
• In 1980, many Indians were in the global middle 40%; today, almost all Indians are in the global bottom 50%

This is the full context behind why ₹25,000/month puts you in the top 10% — it is not that ₹25,000 is a lot of money in absolute terms, but that the income distribution in India is extremely skewed at the bottom.

Frequently Asked Questions

Related

• Income Percentile Calculator — See your exact rank among Indian taxpayers
• India's Income Distribution: What 8.5 Crore Tax Returns Reveal
• The Rise of India's Salaried Investors: ITR-2 Grows Fastest at 27%
• Last-Minute Tax Saving Before March 31: Complete Guide