ITR-3 filings grew over 600 percent in 2024 among investors under the age of 25, shows Cleartax data

The fastest increase in ITR-2 and ITR-3 filers is coming from Indians under the age of 25

India’s capital markets are witnessing a powerful shift.

Look beyond the headline numbers and you’ll find the story of an emerging generation reshaping how India invests and how it files income tax returns.

Demat accounts grew by nearly 37 million in FY 2023–24, and the early data for FY 2024–25 suggests this momentum is only accelerating. Yet, what’s truly striking is who is fueling this growth. The fastest increase in ITR-2 and ITR-3 filers, the categories linked to capital gains and market activity, is coming from Indians under the age of 25. Many are college students or freshers just stepping into the workforce.

GenZ's ITR-3 filings grow 600 percent

This group is not just dabbling in the markets, they’re committing significant capital, often without other sources of income. While this highlights extraordinary enthusiasm, it also signals risk. Cleartax's data shows that ITR-3 filings grew over 600 percent among sub-25 investors in 2024, but these same individuals reported some of the highest losses. The eagerness is undeniable, but the expertise is still developing.

Contrast this with the 30-35 year age bracket. Here, we see steady growth in ITR-2 and ITR-3 filings, coupled with far fewer losses. These investors have learned to navigate markets with more discipline, balancing risk and reward. By their late thirties and forties, many shift back towards safer, income-preserving investments, a reminder of how financial behavior evolves with life stages.

The numbers tell us two things. First, India’s younger generation is no longer waiting until they are “settled” to invest. They see capital markets not as a side activity, but as a primary income stream and a vehicle for wealth creation. Second, this enthusiasm needs a direction. Without proper guidance, the risk is that a generation could be disillusioned by early losses instead of empowered by early participation.

Also read: Juggling US’ IRS and India’s I-T dept: How Indians investing in US stocks are taxed

Need for financial education

This is where India’s financial ecosystem, regulators, platforms, and advisors, has a responsibility. The growth in ITR-2 and ITR-3 filers is more than a statistic; it’s the early chapter of a market deepening process that can define the next decade. If these young investors are given access to education, smarter tools, and tax-efficient strategies, they can become the backbone of India’s wealth creation story.

Our internal data shows that ITR-3 filers recorded the highest retention rate of 91.6 percent in 2024. This year shows an early retention rate, already clocking 68 percent in ITR-3 by August 2025. Early trend also shows a 58 percent growth rate in new users in the same segment compared to the previous year, thus proving that once people step into the markets, they rarely step out. They only need the right roadmap.

Also read: Last minute rush: Steer clear of these common ITR filing errors to avoid I-T queries, notices later

India’s capital market boom has a new face. It’s young, ambitious, and impatient to grow. The challenge and opportunity is to channel this energy into sustainable wealth-building. If we succeed, the story of India’s economic rise will not just be told in GDP figures, but in the financial independence of millions of new investors who believed in the markets early.