New Delhi [India], February 1 (ANI): Union Minister Hardeep Singh Puri called this year’s Union Budget excellent and highlighted the income tax exemption up to Rs 12 lakhs which he said will increase the middle class spending, giving a fillip to the economy.
“It was an excellent budget… The middle class has been exempted from the income tax on income of up to Rs 12 lakhs and many such provisions are there,” Puri told ANI.
“What stands out about this budget is it provides a feel good factor. It will encourage spending not only in infrastructure because of capex but the middle class will also spend more because of the tax exemption,” he added.
Finance Minister Nirmala Sitharaman, during her Union Budget 2025 speech, announced that no income tax will be payable on income up to Rs 12 lakh, providing significant relief to taxpayers especially the middle class.
This limit will be Rs 12.75 lakh rupees for salaried tax payers counting Rs 75,000 of standard deduction. She also stated that the new income tax regime will be simpler, with a special focus on benefiting the middle class.
But there is a catch, the exemption can be earned only if a tax payer takes relief under various sections of the income tax act like Rs 1.5 lakh exemption under section 80CCC, exemption of Rs 1.5 lakh for paying interest on home loans.
Sitharaman says “To tax payers up to Rs 12 lakh of normal income (other than special rate income such as capital gains) tax rebate is being provided in addition to the benefit due to slab rate reduction in such a manner that there is no tax payable by them.”
The announcement from the Finance Minister of this big relief to the middle class was met by loud thumping of the desks by the treasury benches led by PM Narendra Modi.
The finance minister announced change in income tax slabs and rates across the board, ensuring a more progressive taxation system.
Sitharaman says, “Slabs and rates are being changed across the board to benefit all tax-payers. The new structure will substantially reduce the taxes of the middle class and leave more money in their hands, boosting household consumption, savings and investment.”
Under the new tax slabs income of up to Rs 4 lakh will have to pay Nil tax hiked from Rs 3 lakh. A tax payer in the new regime with an income of Rs 12 lakh will get a benefit of `Rs 80,000 in tax.
A person having income of `Rs 18 lakh will get a benefit of Rs 70,000 in tax. A person with an income of Rs 25 lakh gets a benefit of Rs 1,10,000 under the new tax slabs.
As a result of these proposals, revenue of about Rs 1 lakh crore in direct taxes and Rs 2600 crore in indirect taxes will be forgone. (ANI)
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