Big Tax Relief for Middle Class in Union Budget 2025
Finance Minister Nirmala Sitharaman announced major tax relief for salaried individuals during the Union Budget 2025 presentation. Those earning up to Rs 12 lakh annually will no longer have to pay income tax under the new tax regime. This is the largest tax break for the Indian middle class since 1997.
Key Changes in the New Tax Regime
On February 1st, Sitharaman presented her eighth Union Budget, which included several direct tax reforms. The most notable change is an increase in income tax rebates. The rebate limit now extends to Rs 12.75 lakh, including standard deductions, offering substantial relief to salaried professionals.
Focus on Middle Class Growth
The budget emphasizes the significance of the middle class in India’s development. Sitharaman highlighted their contribution and reiterated the government’s commitment to supporting them. This tax relief aims to empower the middle class, boost household consumption, savings, and investment.
Historical Perspective on Tax Relief
The government has progressively raised the ‘Nil tax’ slab over the years. It went from Rs 2.5 lakh in 2014 to Rs 5 lakh in 2019 and then to Rs 7 lakh in 2023. This latest increase to Rs 12 lakh (Rs 12.75 lakh for salaried individuals with standard deductions) reflects the government’s continued focus on supporting the middle class.
Impact on Taxpayers
A taxpayer earning Rs 12 lakh under the new regime will save Rs 80,000 in taxes. Someone earning Rs 18 lakh will save Rs 70,000 (30% of tax payable under existing rates). A person with an income of Rs 25 lakh will benefit from a tax saving of Rs 1,10,000 (25% of tax payable).
[[Budget 2025]] Highlights: More than Just Tax Relief
The Union Budget 2025 includes several other important announcements. From AI initiatives to infrastructure development, the budget addresses various aspects of the Indian economy.
Positive Sentiment and Online Reactions
The income tax relief has been met with positive reactions online. Many celebrated the changes, sharing memes and expressing relief on social media. The budget news is trending with discussions about its potential impact on the Indian economy.
