Union Budget 2025: FM affirms that ₹1,00,000 Crore Direct Tax and ₹2,600 Crore Indirect Tax to be Foregone in Proposed New Tax Regime
The changes proposed by the Union Budget 2025-26 are deemed by many to be taxpayer and middle-class friendly in comparison to the previous Budgets presented by the Narendra Modi-led Government
Union Budget 2025 – Budget 2025 Highlights – Budget 2025 News – Budget 2025 Updates – TAXSCAN
Union Budget 2025 – Budget 2025 Highlights – Budget 2025 News – Budget 2025 Updates – TAXSCAN
The Union Budget 2025-26 presented today by Union Finance Minister Nirmala Sitharaman has apprised the nation of the re-injection of ₹1,00,000 Crore Direct Tax and ₹2,600 Crore Indirect Tax back into the economy by means of the recommendations put forth by the proposed new tax regime.
The move has been slated to uplift the spending power of the middle class, facilitating the re-entry of the amount supplied back to the taxpayers in the form of rebates. The tax rebate shall ensure that taxpayers earning up to ₹12 lakh of normal income (excluding capital gains) in effect, will pay no income tax.
Read More: Budget 2025: New S. 87A Rebate Threshold Limit, Proposed Changes, Applicability and the Catch
“I am now happy to announce that there will be no income tax payable up to an income of ₹12 lakh (i.e., average income of ₹1 lakh per month other than special rate income such as capital gains) under the new regime. This limit will be ₹12.75 lakh for salaried taxpayers, due to the standard deduction of ₹75,000,” said Sitharaman.
Get Complete Coverage on Budget 2025-26
The proposed regime changes is more or less a calculated game which is in many ways beneficial to the middle-class, increasing their spending capacity by a percentage - leading to betterment in their lifestyles and purchase choices.
Under the revised tax regime, income up to ₹4 lakh is tax-free. Earnings between ₹4-8 lakh are taxed at 5%, ₹8-12 lakh at 10%, ₹12-16 lakh at 15%, ₹16-20 lakh at 20%, and ₹20-24 lakh at 25%. Any income exceeding ₹24 lakh is taxed at 30%.
The Frequently Asked Questions released post the Budget further clarified that the reforms will ensure that an additional ₹1 lakh crore remains with taxpayers, promoting liquidity in the market and supporting economic expansion.
The Modi 3.0 Government is by all aware of the sand slowly slipping through their feet, owing to their lack of a clear majority in the General election 2024 and has made their moves calculatingly, ensuring relief and happiness to the largest section of their voter base.
To Read the full text of the Order CLICK HERE
Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
