While personal income tax flows have grown at a faster pace of around 24% vis-a-vis corporate taxes (up 16.9%) through 2022-23, the growth in revenues from senior citizens is far higher. There has been a surprising surge in income tax payments from senior citizens during the past year, lifting the overall tax collections from the 60+ population by as much as 61.5% from pre-COVID levels to surpass ₹1 lakh crore. While personal income tax flows have grown at a faster pace of around 24% vis-a-vis corporate taxes (up 16.9%) through 2022-23, the growth in revenues from senior citizens is far higher. In the first 11 months of 2022-23, taxes paid by senior citizens jumped 35.5% from the ₹83,756 crore collected from them in the entire previous year, to well over ₹1.13 lakh crore.By contrast, taxes yielded by those in their golden years had risen 5% in 2021-22 and 13.6% in 2020-21, when these collections were under ₹80,000 crore. While taxes collected from senior citizens have already risen over 61% between 2019-20 and 2022-23, the number of such taxpayers increased 18.6% over the same period from 73.1 lakh to 86.71 lakh, as per official Finance Ministry data.
Tax practitioners are puzzled by this sharp rise in revenues flowing from this demographic, but believed a combination of factors may have driven this uptick. Those probable causes include arrears paid to defence pensioners, higher capital gains and dividend tax collections due to changes introduced in recent Budgets, along with the boom in the stock markets over 2021-22, whose tax dues were payable last year.
“This is very interesting data and it is hard to narrow the reasons for this phenomenon down precisely, but there could be a variety of catalysts at work,” noted Kuldip Kumar, personal tax expert and former national leader of the global mobility practice at PwC India.