Finance Minister Nirmala Sitharaman breathed fresh life into the salaried middle class with the Union Budget 2025 by announcing zero income tax for anyone earning up to INR 12 Lakh a year.

“This government under the leadership of PM Modi has always believed in the admirable energy and ability of the middle class in nation building. In recognition of their contribution, we have periodically reduced their tax burden,” she told a House waiting keenly for the mega announcement.

“From 2019 to 2023, we have periodically raised the nil tax slab which was up to INR 7 Lakh in 2023. I am now happy to announce that there will be no income tax up to an income of INR 12 Lakh.This benefit will be up to INR 12.75 lakh for salaried individuals, including standard deductions of INR 75,000.”

The House broke into the “Modi, Modi” slogan as soon as the finance minister declared the huge exemption in personal income tax in her budget speech.

Sitharaman asserted that the measure has been introduced to boost savings, consumption and investments for providing significant relief to the middle class. She also proposed to revise the tax slabs in the new tax regime under various income brackets which will benefit individuals across income groups.

Experts called it a bold and huge move since the government will have to forego about INR 1 Tn ($11.6 Bn) in tax revenues to provide more cash in the hands of the people. In fact, the government had read the writing on the wall that it needed to........

© Inc42