Wealthy Indians Underreport Their Income? Bottom 10% Report More Income Than Top 0.1% in India, Says Study

India's wealthy households tend to underreport their wealth and income, according to a paper by Delhi School of Economics director Ram Singh. He is also an external member of the Reserve Bank of India's (RBI) Monetary Policy Committee (MPC).

Singh used the general election filings, , the Forbes List of billionaires and personal income tax (PIT) data from the Central Board of Direct Taxes to analyse the paper "Do the Wealthy Underreport Their Income? Using General Election Filings to Study the Income–Wealth Relationship in India."

According to Singh's findings, the top 0.1% of Indian households report income that is just 8% of the national average income-to-wealth ratio. Families featured in Forbes’ top 100, officially declare just a twelfth of the income that an average Indian would, if they had the same level of wealth. Data from public records and tax filings suggest this isn't a one-off but part of a broader trend where the super-rich look surprisingly low-income on paper.

The paper argues that the wealthy households are not just reporting lower incomes but they are influencing how the tax system defines income itself. As a result, India’s richest households manage to pay surprisingly little in taxes.

"The total income reported by the bottom 10% of families in the data

amounts to more than 188% of their wealth; in contrast, the wealthiest 5% [respectively 0.1%] of families reported incomes that were just 4% [respectively 2%] of their wealth," the report noted.

"The total income reported by the wealthiest Forbes list families is less than 0.6% of their wealth," it added. it further highlights that the the Indian tax regime is not progressive with reference to wealth.

Citing national income data, the research argues that the reported income-wealth ratio for the wealthiest 20% is less than one-third of the national average.

Forbes' Billionaire Indians

As per Forbes' India’s 100 Richest list, Mukesh Ambani leads the rankings with a net worth of $119.5 billion.

Following closely is Gautam Adani, chairman of the Adani Group, whose family holds the second spot with a fortune of $116 billion. Savitri Jindal and family are ranked third, while HCL co-founder Shiv Nadar and Sun Pharma’s Dilip Shanghvi and family take the fourth and fifth spots, respectively.