Tag: income tax budget 2025

Income Tax Relief For Middle-Class In Budget 2025

Income Tax Relief For Middle-Class In Budget 2025! PM Narendra Modi Drops BIG Hint

Income Tax Relief In Budget 2025? The Narendra Modi government is all set to present its first full budget of the third term on February 1. The middle class has high hopes from the Budget of Finance Minister Nirmala Sitharaman this time as while the inflation has caused a dent in their pockets, the tax slabs have largely remained unchanged. Now, while delivering his customary pre-session remarks to the media, Prime Minister Narendra Modi dropped a big hint.

In this speech, PM Narendra Modi hinted that the budget is set to bring some relief for the common man and the monetary benefits may be on the cards. PM Modi started his speech by invoking Goddess Lakshmi, the deity of prosperity.

Today, at the beginning of the budget session, I bow to Goddess Lakshmi, the goddess of prosperity. And on such occasions, for centuries, we have been remembering the virtues of Goddess Lakshmi: सिद्धिबुद्धिप्रदे देवि भुक्तिमुक्तिप्रदायिनि। मंत्रपूते सदा देवि महालक्ष्मि नमोस्तुते।,” said PM Modi.

Hinting at some relief for middle-class, PM Narendra Modi said, “Maa Lakshmi gives us success and wisdom, prosperity and well-being. I pray to Maa Lakshmi that every poor and middle-class community of the country should be blessed with the special blessings of Maa Lakshmi.

Stressing the importance of ensuring equal rights for women free from religious and sectarian differences, he asserted that significant decisions towards the goal will be taken during the Budget Session, which started from Friday. He emphasised the importance of establishing the dignity of women, who have been at the centre of the ruling BJP’s welfare measures.

Prime Minister Narendra Modi also hinted for some schemes related to women. PM Modi said that tomorrow there will be discussions in Parliament and after a lot of deliberation, laws will be made that will increase the strength of the nation. 

Especially, to re-establish the pride of Nari Shakti, to ensure that every woman gets a respectable life without any discrimination of caste and creed and gets equal rights, many important decisions will be taken in this session in that direction,” said Modi.

New income tax slab, tax-free ₹10 lakh for salaried expected

Budget 2025 Income Tax Slab Change Expectation

Budget 2025 income tax slab change expectation: As the Union Budget 2025 approaches, many people, particularly those in the middle-income group and salaried employees, are anticipating tax cut announcements by Finance Minister Nirmala Sitharaman.

On Thursday (January 23, 2025), PTI reported Barclays as saying that the government should announce an “effective” personal income tax cut.

Currently, income above ₹15 lakh is taxed at the rate of 30% under the new tax regime. However, several media reports and tax experts suggest that the upcoming budget may propose one or both of the following changes in the new regime:

  • First, the government may make income up to ₹10 lakh tax-free.
  • Second, the budget may introduce a new 25% tax slab for incomes ranging from ₹15 lakh to ₹20 lakh, according to Business Standard.

What experts say

Experts believe that the expected changes, if approved, will significantly reduce the tax burden for middle-class and salaried employees.

“If the government approves the above-mentioned changes in the coming budget, it will reduce the tax burden, especially of the middle-income group and salaried employees, providing them with a greater amount of disposable income,” said CA Dr Suresh Surana.

“A new 25% tax slab for the ₹15 lakh to ₹20 lakh income range would reduce the marginal tax rate for individuals whose incomes fall in this bracket,” said Raheel Patel, partner at Gandhi Law Associates

However, according to Patel, the exact impact of the expected tax cuts will depend on additional factors such as the continuation of existing deductions, surcharges, and any other changes announced in the budget.

Will tax cuts help the economy?

Tax experts say that the expected tax changes will not only help individual taxpayers but also increase consumption activities, thus boosting the economy.

“It will be a trade-off for the government between a decrease in tax revenue and an increase in consumption activity of taxpayers,” said SR Patnaik, partner and head of taxation at Cyril Amarchand Mangaldas.

According to Patnaik, the government is anticipating that such tax relief will increase spending on consumer durables and stimulate GDP growth.

“It is also important to note that modifying the income tax slab rate is not the only means of providing relief to taxpayers or stimulating consumption activity,” he said.

Patel said, “This will lead to lower total taxes, increased disposable income, and a more gradual tax progression, all of which can be beneficial to both taxpayers and the economy at large.”

How much income is tax-free currently in the new regime?

Salaried individuals earning up to ₹7.75 lakh have to pay no tax due in the new tax regime to the availability of a standard deduction of ₹75,000 and the rebate available under section 87A of the Income-tax Act, 1961.

Read more at: Govt may raise tax-free provident fund limit to ₹5 lakh: Report