₹22 lakh and the Top 1% illusion: CA explains why it still doesn’t feel rich in India

Earning ₹22 lakh a year is often presented as a financial milestone in India. According to national income statistics, that figure places an individual in the country’s top 1% of earners — a label that signals elite status, success and comfort. 

But a growing body of commentary suggests that this headline number masks a deeper reality: in a country as vast and unequal as India, wealth is as much about where you earn and live as it is about how much you earn. 

Chartered Accountant Nitin Kaushik recently sparked a wide discussion on social media by calling the “Top 1%” tag a “statistical delusion”, arguing that national averages ignore geography, cost of living and regional concentration of wealth. 

Problem with the national average 

On paper, ₹22 lakh per annum looks like a winning number. In practice, Kaushik notes, that income can feel “aggressively middle-class” in Tier-1 cities such as Mumbai or Bengaluru. 

After accounting for a 30% income tax bracket, high rents, expensive schooling, transport and lifestyle inflation, the purchasing power of a ₹22 lakh salary shrinks rapidly. In India’s biggest economic hubs, individuals are not competing with the national average but with business families, inherited wealth and high-velocity capital. 

“The moment you step out of your door, your purchasing power is diluted,” Kaushik wrote, pointing to the dense concentration of wealth in states like Delhi, Goa and Sikkim. 

Where the top 1% bar is highest 

Data on state-wise income thresholds shows stark differences in what it takes to be considered part of the top 1%. 

In so-called “super-rich” states, the bar is far higher than the national figure: 

• Goa (₹45 lakh): Despite its small size, Goa tops the list. An influx of wealthy retirees, entrepreneurs and second-home owners has pushed up income levels sharply. 
• Delhi (₹42 lakh): As a hub of politics and business, Delhi’s economy is dominated by business owners rather than salaried professionals, raising the threshold. 
• Sikkim (₹40 lakh): Often cited as a surprise entrant, Sikkim’s high ranking is largely due to a unique tax advantage. Under Section 10(26AAA), Sikkim residents are exempt from income tax, significantly boosting take-home incomes. 

Corporate hubs, tougher competition 

India’s major job-creating states — home to IT, manufacturing and financial services — also demand higher incomes to break into the top 1%. 

• Maharashtra (₹35 lakh) 
• Karnataka (₹32 lakh) 
• Tamil Nadu (₹32 lakh) 
• Gujarat (₹30 lakh) 

Here, a large concentration of well-paid corporate professionals raises the average income level. Climbing into the top 1% often requires reaching senior leadership roles or supplementing salaries with additional income streams. 

The geo-arbitrage opportunity 

The contrast becomes sharper in states with lower living costs and lower average incomes. 

In Bihar (₹13 lakh), Uttar Pradesh (₹15 lakh) and West Bengal (₹19 lakh), the same ₹22–25 lakh income that barely stretches in Mumbai places an individual well above 99% of the local population. 

This gap translates into tangible lifestyle differences: larger homes, lower daily expenses, higher savings rates and stronger investment capacity. The phenomenon, often referred to as “geo-arbitrage”, involves earning a metro-level salary while living in a lower-cost region. 

With remote work and digital careers decoupling income from physical location, this arbitrage is becoming increasingly viable for professionals. 

Regions where entry is easiest 

In some parts of India, even modest salaries place individuals at the very top of the income pyramid: 

• Ladakh (₹8 lakh) 
• Andaman & Nicobar Islands (₹9 lakh) 
• North-Eastern states (₹10-14 lakh) 

In these regions, a monthly income of ₹70,000-80,000 can be enough to qualify for the top 1%, highlighting the extreme regional variation in income distribution. 

Rethinking what wealth means 

Kaushik argues that the real shift underway is the “death of the national average”. As income becomes more mobile, the denominator — cost of living and local economic context — matters as much as the numerator on a salary slip. 

“Wealth isn’t the number on your Form 16,” he wrote. “It’s the gap between your income and the cost of your environment.” 

The conclusion, while understated, is significant: financial freedom may no longer be about chasing the highest possible paycheck in India’s most crowded cities, but about choosing locations where income translates into real purchasing power, stability and long-term wealth creation.