In a landmark move aimed at easing the tax burden on middle-class citizens, the Union Budget 2025-26 has introduced a significant revision to the income tax structure. Under the new tax regime, individuals with an annual income of up to Rs. 12 lakh will no longer be required to pay any income tax. For salaried taxpayers, the exemption limit is further extended to Rs. 12.75 lakh, factoring in the standard deduction of Rs. 75,000.
Major Overhaul in Tax Slabs
Finance Minister [Name] announced the revised tax slabs and rates while presenting the budget in Parliament today. The move is expected to provide substantial relief to taxpayers and stimulate economic growth by boosting household consumption and investment.
Under the revised structure, tax rates have been rationalized to ensure a more progressive and equitable tax system. The changes are aimed at encouraging more individuals to adopt the new tax regime, which was introduced as an alternative to the old tax structure in previous years.
Boost to Middle-Class Savings and Investment
The substantial increase in the income tax exemption limit is expected to leave more disposable income in the hands of middle-class households, thereby increasing consumption expenditure. This, in turn, is anticipated to drive economic growth and encourage investments in sectors such as housing, consumer goods, and financial markets.
Experts believe the move will result in a multiplier effect on the economy, as increased disposable income will boost demand across various industries. Additionally, the measure is expected to improve overall tax compliance by simplifying the tax structure and making it more attractive for taxpayers.
Government’s Vision for Economic Growth
Speaking on the budget, the Finance Minister stated, “This is a historic step towards simplifying the tax system and providing direct benefits to millions of taxpayers. The reduction in tax liabilities will enable individuals to allocate more resources towards savings, investment, and consumption, which will have a positive impact on the overall economy.”
The government has also announced further tax slab adjustments across various income brackets to ensure that tax reductions benefit a larger segment of the population. More details on the revised tax slabs and rates are expected to be released soon.
Industry Reactions and Public Response
The announcement has been widely welcomed by financial analysts and tax experts, who see it as a bold step in the right direction. The salaried class, in particular, has lauded the government’s decision to increase the exemption threshold, as it directly impacts their take-home pay.
With the new tax slabs set to take effect from the next financial year, taxpayers are advised to evaluate their tax planning strategies in light of these changes. Financial advisors are optimistic that the move will encourage individuals to adopt a more structured approach to savings and investment.
As India moves towards a more simplified and taxpayer-friendly income tax system, the revisions introduced in the Union Budget 2025-26 mark a significant shift in the country’s fiscal policy, aiming for economic expansion and improved financial well-being of citizens.
(For further details, refer to the official Finance Ministry notification on the revised tax slabs and benefits.)