Indian techies are fascinated by the Rs 1-Crore package. Look beyond debate - Why & Who draws 1Cr?

The IT sector in India has been a cornerstone of the country's economic growth, with major hubs like Bengaluru, Hyderabad, and Pune housing numerous multinational corporations and innovative start-ups. Professionals in these regions benefit from a dynamic ecosystem that fosters talent and provides ample opportunities for career advancement. Companies like Infosys, Tata Consultancy Services (TCS), Wipro, and newer tech giants like Flipkart and Paytm are known for offering lucrative packages to retain top talent.

Indian Techies are generally well compensated, yet the topic of salaries are front and center in most conversations. By all means 20-30-40 lakhs is still a huge amount in a country where a percentage of population is below poverty line. Yet there are days when lurking in tech forums, I come across boasts or humble-brags about "1 crore" packages that generate animate discussions. 

Typically, these high earners with packages of 10 million rupees are seasoned professionals who have climbed the corporate ladder through years of dedication, advanced education, and continuous skill development. They often hold senior positions such as Chief Technology Officer (CTO), Vice President of Technology, or lead specialized departments in software development, cybersecurity, artificial intelligence, or data science. Their responsibilities are extensive, encompassing strategic decision-making, leading large teams, overseeing complex projects, and ensuring the technological competitiveness of their organizations.

Thanks to Bollywood, Indians have always had a fascination for “crorepatis” just like the American dream is to eulogize millionaires. Reaching the 1 crore salary mark often involves a combination of advanced technical skills, managerial acumen, and a track record of successful project delivery. And a bit of luck and being at the right place at the right time also plays a role. Some Techies who earn such salaries are typically involved in cutting-edge projects that require expertise in emerging technologies such as artificial intelligence, machine learning, blockchain, and cloud computing. Their ability to adapt to rapidly changing technological landscapes and drive strategic initiatives is highly valued.

Behind the headlines

High earners in India, such as those earning a 1 crore annual salary, are subject to a progressive income tax structure designed to ensure equitable taxation. For the financial year 2023-2024, individuals with annual incomes exceeding 15 lakh rupees fall into the highest tax bracket, which imposes a tax rate of 30% on their income beyond this threshold. Additionally, a surcharge is applicable on high-income earners: 10% on income between 50 lakh and 1 crore rupees, 15% on income between 1 crore and 2 crore rupees, 25% on income between 2 crore and 5 crore rupees, and 37% on income exceeding 5 crore rupees. This surcharge significantly increases the effective tax rate for top earners.  




The unsaid truth of 1Crore package is Taxes. Income Tax will knock off >30% of the package for such high earners - no IFs, Buts or IT Deductions at this level of salary earnings. According to data published by IT department, the total number of taxpayers in India earning between 50L-1Cr is only about 300 thousand - this is a drop in the bucket of country of 1.4 Billion! 


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