Wealth creation in India is increasingly moving beyond traditional salaries. According to the annual ClearTax report titled 'How India Reported in 2026', nearly half of individual taxpayers report income from sources such as investments, business, freelancing, and cryptocurrencies.
The proportion of self-declarants who reported having at least one source of income outside employment increased to 47.3% in the Assessment Year (AY) 2026-27, up from 9.5% in AY 2022-23. This reflects the growing diversification of family income sources.
This trend is also visible in the rise in the number of taxpayers declaring multiple sources of income. The share of self-declarants reporting income from two or more non-salary sources grew from 3.5% in AY 2022-23 to 24.4% in AY 2026-27.
The data suggests that investing, trading, and independent professional activities are becoming a more significant part of how Indians accumulate wealth, rather than relying solely on monthly salaries.
The increasing complexity of income sources is also reflected in tax filings (ITR). Declarations going beyond the basic ITR-1 accounted for 62% of all filings in AY 2026-27, higher than 53% in AY 2025-26 and 40% in AY 2024-25.
Furthermore, ITR-2 and ITR-3, which cover taxpayers with capital gains and other complex income sources, together made up 57.2% of total declarations in AY 2026-27, an increase from 48.1% the previous year and 36.2% in AY 2024-25.
Capital Gains Reporting Rises Sharply
One of the most significant findings is the increase in the number of taxpayers reporting capital gains. The share of self-declarants declaring capital gains reached 41.7% in AY 2026-27, up from 34.4% in AY 2025-26, marking an increase of 7.3 percentage points in one year. Two years ago, this figure was only 25.5%.
This trend indicates growing participation in financial markets and wider adoption of investment products that generate capital gains. A shift is also observed among taxpayers using professional help for filing returns. The share of applicants assisted by experts reporting capital gains rose from 51% in AY 2024-25 to 68% in AY 2026-27. Among self-declarants, this figure increased from 23% to 38%.
Almost two-thirds of first-time filers who opt for expert assistance reported capital gains in AY 2026-27. Their share increased from 44% in AY 2024-25 to 64%. This suggests that more new taxpayers are starting their financial journey with investment income, not just salary.
Between AY 2024-25 and AY 2026-27, the share of self-declarants reporting capital gains grew from 23% to 38%, while those guided by experts increased from 51% to 68%.
Young Investors Lead the Shift Towards Market-Linked Income
The shift towards investing and trading is particularly noticeable among younger taxpayers. Among self-declarants under 25, 75% filed complex returns in AY 2026-27, compared to 60% in the previous fiscal year. This increase of 15.5 percentage points is the highest across all age groups.
In this group, the share of ITR-3 filings rose from 28% to 44%, while ITR-1 filings decreased from 41% to 25%. ITR-3 is typically used by individuals reporting income from business or profession, including relevant trading income.
Young investors also report losses more frequently. Among self-declarants under 25 who reported capital gains or losses, 37% reported a loss in AY 2026-27, the highest proportion among age groups. This proportion gradually decreases with age, reaching 21% among taxpayers over 60.
Middle-income taxpayers are also forming investment portfolios. Nearly half of taxpayers in the gross income range of 5 to 10 lakh rupees filed complex returns in AY 2026-27. Their share increased to 49.6% from 36.2% in AY 2025-26, representing the sharpest growth among all income groups.
The report suggests that middle-income taxpayers are increasingly combining employment income with stocks, trading, and independent professional activities. At the top of the income distribution, the share of self-declarants reporting gross income above 50 lakh rupees rose to 8% in AY 2026-27 from 4.5% in AY 2023-24, almost doubling in three years. The percentage of individuals reporting income above 20 lakh rupees also increased to 30.5% compared to 22.5% during the same period.
Women Increase Participation in Investing and Trading
Female taxpayers are also showing more active participation in investment-related activities. The share of female applicants reporting capital gains rose to 30.5% in AY 2026-27 from 26.1% in AY 2025-26. Women filing ITR-2 for capital gains increased their share to 26.8% from 23.3%, and ITR-3 filings rose to 16.1% from 13.2%.
The report also highlights the growing representation of women in higher income brackets. The share of female self-declarants reporting income above 50 lakh rupees increased from 3.7% in AY 2025-26 to 5.1% in AY 2026-27, representing a relative increase of 38%. For men, the corresponding share increased from 9.6% to 12.2%, or 27%.
Although the share of women earning over 20 lakh rupees remains lower than that of men, the growth rate in higher income brackets among women is higher.
Investment Activity Continues Beyond Retirement
The report also refutes the assumption that investment activity declines after retirement. While 44% of taxpayers aged 40-50 reported gross income above 20 lakh rupees in AY 2026-27, compared to 9% among those over 60, older taxpayers were more inclined to report capital gains. Approximately 40% of taxpayers over 60 reported capital gains, compared to 35% among those aged 40-50.
More than half of taxpayers over 60 also filed complex returns, indicating that investment portfolios and income-generating assets remain active even after a reduction in regular employment income.
Key Findings From The Report Include:
According to ClearTax, 62% of all declarations in AY 2026-27 were non-ITR-1 declarations, compared to 53% in AY 2025-26 and 40% in AY 2024-25.
47% of self-declarants reported income from investments, business, freelancing, or cryptocurrency, significantly higher than 9.5% in AY 2022-23.
75% of self-declarants under 25 filed complex returns, compared to 60% in the previous fiscal year, indicating earlier participation in investments and independent income-generating activities.
49.6% of self-declarants in the income bracket of 5 to 10 lakh rupees filed complex returns, highlighting the expansion of diversified income sources and investment activity beyond high-income households.
30.5% of female applicants reported capital gains, compared to 26.1% in AY 2025-26, reflecting growing participation in investment markets.
