New Delhi, Feb 1: Reaffirming the government’s commitment to the philosophy of “trust first, scrutinise later”, the Union Budget 2025-26 has reposed faith in the Middle Class and continued the trend of giving relief in tax burden to the common tax–payer.

 

Presenting the Union Budget in Parliament Finance Minister Nirmala Sitharaman proposed an across-the-board change in tax slabs and rates to benefit all tax-payers.

 

Giving the good news to tax payers, the Finance Minister stated, “There will be no income tax payable up to income of Rs. 12 lakh (i.e. average income of Rs.1 lakh per month other than special rate income such as capital gains) under the new regime. This limit will be Rs.12.75 lakh for salaried tax payers, due to standard deduction of Rs. 75,000.”  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," she said.

 

Sitharaman stated, “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”.

 

Underlining Taxation Reforms as one of key reforms to realise the vision of Viksit Bharat, she said that the new income-tax bill will carry forward the spirit of ‘Nyaya’. The new regime will be simple to understand for taxpayers and tax administration, leading to tax certainty and reduced litigation, she explained.

 

Quoting from The Thirukkural, the Finance Minister stated, “Just as living beings live expecting rains, Citizens live expecting good governance.” Reforms are a means to achieve good governance for the people and economy. Providing good governance primarily involves being responsive.

 

"The tax proposals detail just how the Government under Prime Minister Narendra Modi has taken steps to understand and address the needs voiced by our citizens," Sitharaman added.

 

Later, the Finance Minister told mediapersons that the Union Budget focuses on agriculture, rural prosperity, urban development, and continues to lay emphasis on reforms. 

 

She said that the Budget says several things about India’s path towards Viksit Bharat. Six specified reforms have been identified in which the government will continue its reform agenda, Sitharaman said and pointed out that interests of health and education have been prioritised in the Budget.

 

The Finance Minister highlighted that responding to the voice of the people, the income tax simplification announced last July is already completed in its works.

 

She said the new income tax bill in this regard will be introduced in Parliament next week. She also said that tariffs are being simplified and brought down.

 

Sitharaman said one crore more people will benefit due to the increased tax exemption limit from Rs.7 lakh to Rs.12 lakh.

 

The Finance Minister also emphasised that there is no reduction in the public spending on capital expenditure.

 

She said government continues to place emphasis on the multiplier effect that capital expenditure done by government has shown and asserted that fiscal prudence is being maintained.