The Union Finance Minister Nirmala Sitharaman is presenting her record eighth Union Budget – 2025 in Parliament amid high hopes of tax relief. Delivering the first full budget of Third Narendra Modi-government , Nirmala Sitharaman has become the only finance minister to present the Union Budget for eight consecutive times.
Finance Minister Nirmala Sitharaman unveiled sweeping personal income tax reforms aimed at providing significant relief to the middle class. These reforms, which focus on reducing tax burdens and increasing disposable income, are expected to strengthen household consumption, savings, and investment, thereby accelerating India’s journey toward becoming a 5 trillion dollar economy by 2030 and achieving the vision of Viksit Bharat (Developed India) by 2047.
Union Budget 2025: In-Depth Analysis for Strategic Insights
The Finance Minister emphasized that the middle class forms the backbone of India’s growth story, contributing significantly to nation-building through their hard work and economic participation. In recognition of their role, the government has consistently reduced their tax burden over the years. The ‘Nil tax’ slab, which was raised to Rs.2.5 lakh in 2014, Rs.5 lakh in 2019, and Rs.7 lakh in 2023, has now been further increased to Rs.12 lakh under the new tax regime. For salaried individuals, this limit extends to Rs.12.75 lakh, factoring in the standard deduction of Rs.75,000. This move ensures that individuals earning up to Rs.1 lakh per month (excluding special rate income like capital gains) will pay no income tax, leaving more money in their hands.
The revised tax slabs under the new regime are as follows:
These changes are designed to benefit taxpayers across income levels. For instance, a taxpayer earning Rs.12 lakh will save ₹80,000 annually, while those earning Rs.18 lakh and Rs.25 lakh will save Rs.70,000 and Rs.1.1 lakh, respectively. By reducing the tax burden, the government aims to boost disposable income, which is expected to drive higher consumption, savings, and investments—key drivers of economic growth.
The Finance Minister highlighted that these reforms align with the government’s broader vision of empowering the middle class, fostering economic resilience, and ensuring inclusive growth. By increasing disposable income, the measures are expected to stimulate demand for goods and services, thereby supporting businesses and creating a positive ripple effect across the economy. This, in turn, will contribute to India’s goal of becoming a 5 trillion dollar economy by 2030.
Union Budget 2025: In-Depth Analysis for Strategic Insights
Moreover, the tax reforms are part of a larger strategy to strengthen India’s economic foundations and achieve the vision of Viksit Bharat by 2047. By reducing financial stress on the middle class, the government aims to enhance their quality of life, encourage entrepreneurship, and promote long-term savings and investments. These steps are critical for building a robust, self-reliant economy capable of sustaining high growth rates over the coming decades.
The Budget also focuses on ten key areas, including Garib (the poor), Youth, Annadata (farmers), and Nari (women), ensuring that growth is inclusive and benefits all sections of society. By combining tax reforms with targeted development measures, the government is laying the groundwork for a prosperous and equitable future.
Union Budget 2025: In-Depth Analysis for Strategic Insights
In conclusion, the 2025 Union Budget’s tax reforms mark a significant step toward empowering the middle class and driving India’s economic growth. By increasing disposable income and stimulating demand, these measures will play a pivotal role in achieving the 5 trillion dollar economy target by 2030 and realizing the vision of Viksit Bharat by 2047. The reforms underscore the government’s commitment to creating a thriving, inclusive, and resilient economy for all.
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