Taxmen earned highest income from sale of property, shares

NEW DELHI: Traditional investment wisdom in India has always favoured real estate. The income tax department’s latest data seems to lend a solid proof to this so

NEW DELHI: Traditional investment wisdom in India has always favoured real estate. The income tax department’s latest data seems to lend a solid proof to this so called rule of thumb. The data for 2011-12 shows that long-term capital gains from the sale of property and shares were the top-income earner for assessees, ahead of income from business.

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The I-T department, which segregates all incomes under nine heads, shows that just nine taxpayers (both individuals and companies) earned a total Rs 31,368 crore by selling long-term assets, with the highest average income of Rs 3,485.35 crore, followed by the business income category (average income of Rs 2,330.93 crore) and salary (lowest average income of ₹68.74 crore).

The average salary income was earned by six taxpayers in the income bracket of Rs 50-100 crore, together earning Rs 412 crore. The average salary from business income was earned by 174 assesses with an income of Rs 500 crore and above, together earning Rs 4.05 lakh crore.

Long-term capital gains income is income from the transfer or sale of long-term capital asset(s). Business income comes under the head “profits and gains of business or profession” and salary income under “salaries”.

“The data highlights high traction among taxpayers in earning income from investments, whether in property or instruments. The Centre’s push on encouraging entrepreneurship may change this proportion going forward,” said Rahul Garg, partner and leader, direct tax, at PwC.