Sonal Khanna, a marketing professional in India, will save over ₹70,000 in taxes for the coming year due to significant middle-class tax relief announced in the recent budget.
Union Finance Minister Nirmala Sitharaman declared a zero tax threshold for annual incomes up to ₹12 lakh, which can extend to ₹12.75 lakh with standard deductions for salaried individuals. This marks the largest overhaul of personal income tax slabs in recent years, raising the zero-tax threshold from ₹7 lakh.
Individuals earning between ₹12-16 lakh will now pay only 15% tax on income above ₹10 lakh, down from 30%. This change is expected to increase disposable income and allow for greater savings.
Experts note that the middle class has been essential in expanding India's tax base, with income tax return filings surging to nearly seven crore in recent years. The budget also simplifies compliance by raising various TDS thresholds, making tax filing easier for salaried individuals.
In addition to income tax reforms, the budget includes measures to support the real estate sector, such as the removal of tax on two self-occupied properties and an increase in the TDS exemption threshold on rental income from ₹2.4 lakh to ₹6 lakh.
Overall, the budget aims to boost household savings and consumption, reflecting the government's recognition of the middle class's contribution to economic growth.