Nearly Half Of Indian Taxpayers Report Income Beyond Salaries: Report

A monthly salary is no longer the only source of income for many Indian taxpayers. More people are reporting earnings from investments, freelance work and business activities while filing their income tax returns. The trend is visible among younger taxpayers as well as senior citizens, according to the latest ClearTax data.

According to ClearTax's annual report, How India Filed in 2026, around 47 per cent of self-filers reported income from at least one source outside their jobs in assessment year (AY) 2026-27. This was higher than the 9.5 per cent recorded in AY 2022-23. The share of taxpayers reporting income from two or more non-salary sources also increased from 3.5 per cent to 24.4 per cent during this period.

More Indians Are Reporting Multiple Sources Of Income

Income from a regular job is now accompanied by other sources of earnings in many tax returns. In AY 2026-27, 47.3 per cent of self-filers reported income outside their primary employment. These sources included investments, business activities, freelance assignments and cryptocurrency.

The number of taxpayers reporting income from multiple non-salary sources also recorded a sharp rise. Around 24.4 per cent of self-filers reported earnings from at least two such sources, compared with just 3.5 per cent four years earlier, highlighting that more taxpayers are handling different sources of income alongside their regular earnings.

Young Taxpayers Are Filing More Complex Returns

Young taxpayers are also reporting financial activities that require more detailed tax forms. Among self-filers below 25, the share filing ITR-2, ITR-3 or ITR-4 increased to 75 per cent in AY 2026-27 from 60 per cent in the previous assessment year.

ITR-3 filings accounted for 44 per cent of returns in this age group, up from 28 per cent a year earlier. At the same time, ITR-1 filings fell from 41 per cent to 25 per cent. Stock market transactions, freelance earnings and income from small businesses are among the activities reflected in these filings.

Low Income Does Not Always Mean Simple Tax Filing

The complexity of a tax return does not really depend on how much a person earns. The report has shown that 73 per cent of those reporting gross income below Rs 1 lakh filed complex returns in AY 2026-27. This was higher than the proportion recorded in other income groups up to Rs 50 lakh.

Among taxpayers earning Rs 1 lakh to Rs 2.5 lakh, 69 per cent filed complex returns. The share was 60 per cent in the Rs 2.5 lakh to Rs 5 lakh income bracket. Stock market transactions and freelance work can require additional reporting even when a taxpayer's total income is low.

Young Investors Report Capital Losses More Often

Tax filings also show a difference in investment outcomes across age groups. Among self-filers below 25 who reported capital gains or losses, 37 per cent recorded losses in AY 2026-27. This was higher than the 29 per cent recorded among taxpayers aged 25-30 and 21 per cent among those above 60.

Income levels also showed a difference in reported losses. Around 35 per cent with gross income below Rs 1 lakh reported capital losses, against 19 per cent among those earning above Rs 50 lakh.

Senior Citizens Are Also Reporting Investment Income

People above 60 are also reporting income from financial investments. Around 40 per cent taxpayers in this age group reported capital gains in AY 2026-27, compared with 35 per cent among those aged 40-50. This shows that investment income is also part of the financial activity reported by people beyond their working years.

However, the income distribution differs between the two groups. While 44 per cent aged 40-50 reported gross income above Rs 20 lakh, the share was just 9 per cent among those above 60. More than half of senior taxpayers also filed complex returns, indicating that their tax filings cover financial activities beyond conventional retirement income.