Many more rich Indians than rich taxpayers!

The Government has gathered more intelligence on the extent of black money in the economy from the Annual Information Returns (AIRs) on high value transactions filed by various agencies with the Income-tax Department.

While official information is that the number of people with taxable income of Rs 10 lakh or more is just over 80,000, as per the AIRs, over three lakh Indians spent Rs 2 lakh or more in 2004-05 to buy Mutual Fund (MF) units.

Such transactions exceeded an aggregate value of Rs 7 lakh crore according to AIRs filed by funds. Banks have reported that nearly three lakh Indians deposited more than Rs 10 lakh in savings accounts, amounting to a total of Rs 42,000 crore in 2004-05.

As per information furnished by credit card issuers, more than two lakh people purchased goods/services priced at over Rs 2 lakh through credit cards in transactions that added up to Rs 5,000 crore. Significantly, the AIR data indicate that Indians' tendency to save in physical assets like gold and property, rather than in financial assets, may be on the wane.

Capital markets may still be used by less than 1% Indians, but many are investing aggressively in equity.