February 1, 2025
In a strategic move to invigorate the economy, the Indian government has unveiled significant changes to the income tax framework in the Union Budget 2025. Finance Minister Nirmala Sitharaman announced that individuals earning up to ₹1.2 million annually will now be exempt from paying income tax. This adjustment is anticipated to enhance disposable income for the middle class, thereby stimulating consumer spending.
The revised tax slabs under the new regime are as follows:
- Income up to ₹400,000: No tax
- ₹400,001 to ₹800,000: 5%
- ₹800,001 to ₹1,200,000: 10%
- ₹1,200,001 to ₹1,600,000: 15%
- ₹1,600,001 to ₹2,000,000: 20%
- ₹2,000,001 to ₹2,400,000: 25%
- Above ₹2,400,000: 30%
Additionally, the standard deduction for salaried individuals has been increased from ₹50,000 to ₹75,000, further reducing taxable income and increasing take-home pay. These measures are expected to bolster household consumption, which is a critical component of India's GDP.
Economists predict that these tax reforms will not only provide relief to taxpayers but also inject momentum into sectors such as consumer goods, automobiles, and real estate. By enhancing the purchasing power of the middle class, the government aims to counteract the recent slowdown in economic growth and foster a more robust domestic market.
0 Comments