During her Union Budget 2025 speech, Finance Minister Nirmala Sitharaman announced that no income tax will be payable on income up to Rs 12 lakh, providing significant relief to taxpayers, especially the middle class. However, this exemption only applies if a taxpayer takes relief under various sections of the income tax act. No major announcements were made for the railway sector, as the budget focuses more on increasing allocations for railways over highways.
In her eighth consecutive Union Budget, Finance Minister Nirmala Sitharaman has announced a major relief for the middle class in India. People with an annual income of up to Rs 12 lakh will not have to pay any income tax, owing to a tax rebate and the availability of a standard deduction of Rs 75,000 under the new tax regime. However, tax experts state that individuals with zero tax liability are still required to file an income tax return, leading to a cleaner financial record.
Despite Finance Minister Nirmala Sitharaman's tax cuts for the middle class in Budget 2025, India's stock market remained flat with the Sensex down 0.37% and Nifty down 0.42%. The market awaits a boost in infrastructure and consumer spending as government expenditure has fallen. However, FMCG companies may see an upside with an increase in disposable income for individuals and a focus on the sector in the Budget. Meanwhile, industries such as defence and railways are closely tracking the Budget announcements.
Parliamentarians from various parties have hailed the Union Budget 2025 for its inclusive development approach and focus on key areas such as infrastructure and economic growth. Special attention has been given to the state of Bihar, with MPs expressing gratitude to Prime Minister Narendra Modi and Finance Minister Nirmala Sitharaman for their commitment to a 'Viksit Bharat'. While critics have linked these provisions to the upcoming Bihar elections, former Union Minister Ravi Shankar Prasad defended the budget, stating that the state deserves these developments regardless.
In her record eighth consecutive budget, finance minister Nirmala Sitharaman announced that individuals with an income up to Rs 12 lakh will not have to pay income tax. This move will save citizens Rs 1 lakh crore in direct taxes and Rs 2,600 crore in indirect taxes. The income tax exemption limit has seen a steady increase since 2005, with this latest increase being a major relief for the middle class. Before presenting the budget, Sitharaman met with President Droupadi Murmu as per traditional practice.
Union Finance Minister Nirmala Sitharaman announced plans for a new Income Tax Bill to be introduced in Parliament next week. There is high anticipation, especially from the "middle class", for some form of relief in terms of tax slabs, standard deductions, and Section 87A. This comes in light of the changes implemented last year in the new tax regime, which saw a hike in standard deduction and a major revision in tax slabs for different income brackets. The move is significant as the government plans to simplify and modernize the tax system, thereby creating a fairer and more efficient tax regime to boost investor confidence and economic competitiveness.
In a much-needed relief for the middle class, the government has revised the tax slabs and rates under the new regime. Those earning up to Rs 12 lakh annually will now have to pay zero income tax, including the standard deduction of Rs 75,000. This move is expected to boost household consumption, savings, and investments, and reduce the burden on middle-class taxpayers.
In her Budget 2025 presentation, Finance Minister Nirmala Sitharaman proposed major changes to the income tax structure, with the introduction of a new tax regime and a proposed new tax bill. Under the new regime, those earning up to Rs 12 lakh will not be subject to any income tax, while the tax rates for higher income earners will also see a significant reduction. Additionally, the finance minister also announced plans to make life-saving drugs cheaper and offered interesting budget trivia tidbits, such as cricketer Yuzvendra Chahal's career as an income tax officer. Stay tuned for more updates on these significant changes to income tax in India.
In her annual address to Parliament, President Droupadi Murmu focused on the middle class, recognizing their contributions and aspirations to the nation's economic progress. This comes after her previous speeches that saw a dip in mentions of the middle class. Murmu listed various steps taken by the government to support the middle class, including the Eighth Pay Commission and discounts on home loans. Surprisingly, there was no mention of the Emergency, despite the upcoming 50th anniversary of its imposition.
President Murmu, in her joint address to Parliament, highlighted the government's initiatives for the tribal community, including the 'Dharti Aaba Janjatiya Gram Utkarsh Abhiyan'. She also reiterated the government's commitment to the middle class and reflected on the nation's constitutional journey, commemorating the recent 75-year milestones.