Providing a big relief to the middle-class population, Union Finance Minister Nirmala Sitharaman on February 1 said that the Budget 2025-26 puts money back into th♋e hands of the middle class and taxpayers. In a post-budget interview with Doordarshan, FM Sithara🌠man said one crore people will not pay any tax.
In her Budget 2025-26 announcements, she said that those earning up to Rs 12 lakh annually won't have to pay any income tax. The propose💜d changes seek to reduce taxes and leave taxpayers with money in hand. FM said this will boost domestic consumption and savings.
The first tax slab is up to Rs 4 lakh, in which the tax remains nil. Earlier it was Rs 3 lakh. The next slab is Rs 4-8 lakh where the tax rate is 5 per cent, followed by 10 per cent in the Rs 8-12 lakh slab, 15 per cent in the Rs 12-16 𓂃lakh slab, 20 per cent in the Rs 16-20 lakh slab, and 25 per cent in the Rs 20-24 lakh slab. It's flat 30 per cent above Rs 24 lakh.
When asked why the government has given away Rs 1 trillion in revenue by changing the tax slabs, Sitharaman said that the idea of this was to out money back in the hands of people. “Who are these people or category of people? They’re taxpayers. When we have to put money in the hands of people then it’s a different subject, giving free grains, giving pension to senior citizens below poverty line, we have several different categories. But this category of taxpayers is the one which is helping run the country, and the PM suggested😼 that we should do some calculations by which the honest taxpayers get some relief. When we went back to him with our calculations, he immediately accepted it. So, I’m not viewing this as income foregone but giving more money in the hands of the taxpayers,” Sitharaman said.
In addition, Sitharaman also said to PTI that the💜 income tax cut🍷 is 'by the people, for the people'.
Tax calculation involves divid♎ing total income into൲ different slabs, with each slab taxed at its respective rate. This means you don’t pay tax on your entire income at a flat rate. Additionally, a salaried person isn’t taxed only on the amount remaining after exemptions. For example, if you earn Rs 15 lakh annually, after a standard deduction of Rs 75,000, it doesn't mean you will benefit from a Rs 12 lakh exemption limit.
