India’s New Taxpayer Is Hybrid As Multi-Income Filers Surge In FY25

India’s tax filings are showing a clear change in how people earn their money. More taxpayers are now reporting income from several sources instead of depending only on a monthly salary, according to ClearTax’s annual filing report for 2025, “How India Filed in 2025.”

Returns that include business income, trading activity, and investments are becoming far more common, indicating that the once-dominant salaried-only profile is steadily losing ground. ClearTax refers to this growing group as the “Hybrid Indian” — taxpayers who earn a salary while also reporting income from businesses, capital gains, derivatives trading, and digital assets, most of it managed through online platforms.

ITR Patterns Signal A Structural Reset

The most telling indicator of this shift lies in the composition of income-tax returns filed during the year. ITR-3 filings, which are used by taxpayers with business or professional income as well as trading activity, jumped 45.4 per cent year-on-year. This is a significant leap that underscores how quickly India’s workforce is embracing entrepreneurship, market-linked income, and self-directed financial activity.

ITR-2 filings, which largely capture capital gains and investment income, also rose by 17 per cent over the previous year. Together, these trends suggest that tax returns are no longer simple declarations of annual salary. Instead, they have evolved into detailed financial records that reflect trading behaviour, investment decisions, and diversified earning strategies.

ClearTax’s data indicates that this is not a marginal phenomenon restricted to a small investor class. Rather, it marks a broader redefinition of how Indians earn, invest, and report income, enabled by easy access to markets, digital brokerages, and online compliance tools.

Millennials And Gen Z Drive The Multi-Income Shift

The transformation is being led by younger taxpayers. Individuals aged between 25 and 35 years now account for 42.3 per cent of all ITR-3 filings, making them the single largest contributor to business and trading-related returns. Traditionally seen as the core of India’s salaried workforce, this cohort is increasingly supplementing paycheques with capital gains, futures and options trading, and side businesses.

ClearTax points out that this cohort has emerged as the most financially active generation India has seen. Comfortable with digital tools and willing to take calculated risks, they are increasingly looking beyond a single pay cheque. Easy access to financial apps and online platforms has made investing more approachable, speeding up the move towards multiple income streams.

Gen Z taxpayers are following closely behind. Among those under 25 years of age, ITR-2 filings grew 18 per cent year-on-year, signalling that first-time filers are entering the tax system not only with salary or internship income, but also with investments. This points to a generational change in financial behaviour, where exposure to markets and wealth creation begins far earlier than it did for previous cohorts.

Crypto And Peak Earnings Add New Layers

While still niche, virtual digital assets are becoming part of this layered financial profile. ClearTax data shows that 76.63 per cent of VDA filers are men, nearly 40 per cent fall in the 25–35 age group, and about half of them file under ITR-3, indicating active trading. Crypto, in this context, appears less as a standalone bet and more as an additional asset class within an already diversified income mix.

The report also highlights a clear peak-earning phase within India’s salaried population. Among taxpayers aged 40 to 50 years, 38.1 per cent earn above Rs 30 lakh annually, making this the country’s prime earning decade. This group represents financial stability at scale, even as younger taxpayers experiment with multiple income streams.

Commenting on the findings, Archit Gupta, Founder and CEO of ClearTax, said India’s tax data today tells a very different story from a decade ago. The rapid rise in multi-income filers, he noted, shows that Indians are building more layered and resilient earning models by combining salary with markets and business income. This shift, driven by digital access and changing risk preferences, is likely to shape India’s economic and investment landscape for decades to come.