In the past, earning ₹10 lakh a year in India was a sign of middle-class comfort, upward mobility, and financial stability. But would that number still have the same significance in 2025, given the rising cost of living in cities, inflation, and shifting aspirations? Let’s examine the modern notion of the middle Class in India and how a salary of ₹10 lakh fits into this changing framework.
The Middle Class Is Defined by More Than Just Income
In India, “middle class” is a complicated term. It is a socioeconomic identity influenced by lifestyle, goals, and purchasing patterns rather than merely a range of incomes. Economists and policymakers define this group based on several benchmarks, such as asset ownership, daily spending, and income classifications.
An overview of India’s income-based classifications is shown below:
- Group with Lower Income: Less than ₹3 lakh annually
- Middle Class: ₹3–6 lakh annually
- Mid-Class: ₹6–15 lakh annually
- Upper Middle Class: between 15 and 25 lakh rupees annually
- Rich/Affluent: ₹25 lakh and up
This metric qualifies a yearly salary of ₹10 lakh as middle Class. However, the protection and comfort it formerly provided are becoming increasingly pressured, particularly in cities.
2025’s Actual Cost of Living
We must look beyond the numbers and consider actual costs to determine whether ₹10 lakh qualifies as middle-class today.
Daily prices have skyrocketed in major cities like Bengaluru, Delhi, and Mumbai.
An approximate monthly spending plan for a nuclear family in a Tier-1 city is as follows:
Category of Expense
- Rent per month, about (2BHK)Between 30,000 and 60,000 naira
- Food & GroceryTransport costs between ₹12,000 to ₹18,000 (fuel/EMIs)Between 6,000 and 10,000 naira
- Fees for school8,000 to 20,000 naira
- Health BenefitsBetween ₹2,000 and ₹5,000
- Internet & Utilities ₹3,000–₹5,000
- Amusement₹3,000 to ₹5,000
- Investments and SavingsBetween 5,000 and 10,000 naira
- The entire monthly cost is between ₹69,000 and ₹1,33,000
- Cost per year: ₹8.2 lakh to ₹16 lakh
As these figures demonstrate, if you’re raising a family in a metropolitan region, a ₹10 lakh income might barely cover the necessities, if not wholly.
Declining Purchasing Power and Inflation
Inflation is another element devaluing ₹10 lakh. In late 2024, food inflation soared past 10%, while retail inflation reached a 14-month high of 6.21%. Vegetables and other necessities have seen more than 40% price increases.
The actual worth of ₹10 lakh has decreased over time. For background:
- Today, ₹7.5–₹8 lakh is the equivalent of ₹10 lakh in 2020.
- In the meantime, many urban and service-based industries have seen a stagnation in salaries.
In other words, ₹10 lakh in 2025 doesn’t get you as far as it used to.
The Tax Relief from the New Budget
In response to mounting financial strain, the 2025 Union Budget implemented significant tax reforms for the middle Class.
The updated income tax slabs under the new regime are as follows:
Tax Rate by Income Range (2025)
- 0% up to ₹12 lakh
- ₹12–16 lakh 15%
- 16–20 lakh rupees20%
- ₹20–25 lakh 25%
- 30% over ₹25 lakh
A person making ₹10 lakh a year is exempt from income tax under these measures, significantly raising take-home pay. This change increases household consumption and offers much-needed respite, particularly for middle-class individuals.
Different ₹10 Lakh Incomes in Urban and Rural Areas
In Tier-2 and Tier-3 cities, ₹10 lakh still provides a good lifestyle, even though it can feel tight in Delhi or Mumbai. Here’s how:
- Reduced real estate expenses and rentals
- Reasonably priced education and medical care
- Lower daily costs for food and transportation
On ₹10 lakh, families in towns like Indore, Jaipur, or Bhopal can frequently maintain a greater standard of living than those in metro areas. The growing cost-of-living disparity between urban and semi-urban India redefines the geographically defined middle-class experiences.
Goals versus Affordability
For the Indian middle Class, aspiration is more important than survival. The following are typical middle-class objectives:
- Having a house
- Enrolling kids in private schools
- Taking yearly getaways
- Purchasing retirement plans and health insurance
- Purchasing consumer durables or an automobile
Ten years ago, these objectives could be accomplished on a salary of ₹10 lakh, but in the modern world, compromises are necessary. Most homes today require two wage earners or side gigs to maintain this lifestyle and save for the future.
A New Middle Class in the Freelance and Gig Economy?
Traditional income borders have become more hazy due to the growth of remote work, content development, and freelancing. Nowadays, a lot of professionals make between ₹8 and 15 lakh from various sources, but they also confront obstacles like:
Unusual cash flow
No benefits offered by the employer (such as insurance, PF, or gratuities)
Increased demands for financial planning
This expanding group makes up the emerging middle Class, which values flexibility but requires more sound financial management.
In 2025, is ₹10 Lakh still considered middle Class?
Technically, yes. According to official criteria, an income of ₹10 lakh is still considered middle-class.
However, practically? It’s not that simple.
The lifestyle and savings formerly linked to middle-class comfort in metropolitan areas could not be available with this salary. Particularly for nuclear couples, ₹10 lakh increasingly signifies economic survival rather than affluence due to rising expenditures, inflation, and lifestyle aspirations.
How to Make the Most of ₹10 Lakh in 2025
The following tactics can help you become more financially stable if your yearly income is approximately ₹10 lakh:
- Establish a monthly budget to monitor and manage spending.
- Make use of tax-saving investments under Sections 80C, 80D, and NPS. Prevent lifestyle inflation by investing early and steadily in mutual funds, SIPs, and PPF.
- Establish an emergency fund that can cover three to six months’ expenses.
- Look into side projects or passive income sources like investing, freelancing, or renting.
Concluding remarks
In India, the term “middle class” is changing. You might still be considered middle Class in 2025 if you make ₹10 lakh a year, but not with the same ease, security, or ambitions.
Nonetheless, in the current economy, a ₹10 lakh income may sustain a safe, if modest, lifestyle with careful financial planning, restrained expenditure, and several sources of revenue.
Ultimately, being middle Class is about managing your money well, not just how much you make.
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