In a big boost to the Indian middle class, Finance Minister Nirmala Sitharaman on Saturday announced that there will be no income tax payable for incomes up to Rs 12 lakh, and Rs 12.75 lakh for salaried taxpayers (including standard deduction) in the new tax regime.
Here’s a look at new tax slabs;
– Income up to Rs 4 lakh (per annum) – Nil
– Between Rs 4 and 8 lakh – 5 per cent (tax)
– Between Rs 8 and 12 lakh – 10 per cent
– Between Rs 12 and 16 lakh -15 per cent
– Between Rs16 and 20 lakh – 20 per cent
– Between Rs 20 and 24 lakh – 25 per cent
– Above Rs 24 lakh – 30 per cent
This Budget comes as GDP growth is projected to fall to a four year low of 6.4% in FY24, near its decadal average. The Economic Survey forecasts 6.3-6.8% growth in FY26, well below the pace required to achieve Viksit Bharat by 2047. It stresses the need for land and labour reforms to drive growth.
Interestingly, over 86 million income tax returns were filed in India in the assessment year 2024. There were over 44 million taxpayers in the income group of 250 thousand to 500 thousand Indian rupees, the highest across all other income categories. All of these will give a big boost to the Indian middle class especially, but we have to wait for the fine print when the Finance Bill is presented and cleared.
There are several structural issues on the Budget which have a long term bearing on the health of the Nation that is best downloaded from Expert Reviews in the days to come.
However, here is an interesting take on why Budget presentations are a mere tip of the iceberg when it comes to understanding the nuances of taxes and expenditure.
The presentation of the Budget by the Finance Minister used to send the urban city dwellers and salaried class into dreaded anticipation. It was a time when the middle-class had to re-work their monthly spend and find ways to continue living the lifestyle they had gotten accustomed to over the preceding 364 days.
Yes – the price of petrol was 27 paisa in 1947, moving to ₹ 3.11 in 1976 when friends invented the principle of sharing rides to work and back. A different friend’s car each day in a spacious Ambassador.
What is the price of petrol today ₹ 100+? Hypothetically if the dealer price is ₹ 35, Central Government levies ₹ 32 and the State Government’s levy another 30% making the total cost exceed ₹100. The moot question to ask is whether it should be this high – this is seldom discussed, justified nor talked about – something that affects the common man in a manner that is far more serious than Income Tax!!
