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Union Budget 2025
On February 1, Finance Minister Nirmala Sitharaman unveiled the Union Budget 2025, which stayed firmly on the road of fiscal consolidation while easing income taxes for the middle class in an effort to increase consumption.
The major initiatives announced by Finance Minister Nirmala Sitharaman have thrilled middle-class taxpayers. The New Tax Regime (NTR) has increased the refund ceiling from Rs 7 lakh to Rs 12 lakh. Furthermore, Sitharaman changed the tax slabs to help those in higher income groups and provide them greater financial flexibility.
We suggest all the eligible and loyal taxpayers to read this post and find all the necessary details on Union Budget 2025, to get ready for the new tax season.
Tax Breaks Expected to Boost Slowing Economy, Says Government
The Modi administration offered $12 billion in tax cuts in its annual budget on Saturday, the largest such relief in the nation’s history, to boost the economy. The decrease coincides with urban consumers delaying purchases as household incomes have been hit by rising prices and declining salaries.
According to Finance Secretary Tuhin Kanta Pandey, the Center’s proposal to drastically reduce the income tax payer’s burden was intended to alleviate some of the “angst” that the government had observed in recent months and to provide a broad boost to demand, savings, and investments in order to bolster the economy’s waning growth impulses.
On February 1, Finance Minister Nirmala Sitharaman unveiled the Union Budget 2025, which stayed firmly on the road of fiscal consolidation while easing income taxes for the middle class in an effort to increase consumption.
The major initiatives announced by FM Nirmala Sitharaman have thrilled middle-class taxpayers. The New Tax Regime (NTR) has increased the refund ceiling from Rs 7 lakh to Rs 12 lakh. Furthermore, Sitharaman changed the tax slabs to help those in higher income groups and provide them greater financial flexibility.
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Details of Union Budget 2025
Salary workers making up to Rs 12 lakh would pay no income tax, according to the finance minister’s announcement in the Union Budget. The tax slabs under the new system were also adjusted so that individuals making between Rs 12 and Rs 24 lakh would pay less in taxes. Only individuals making more than Rs 24 lakh annually would now be eligible for the highest 30% tax rate, as opposed to the previous threshold of over Rs 15 lakh.
Under the new tax regime, the basic exemption ceiling was raised from Rs 3 lakh to Rs 4 lakh in the Budget 2025–2026. The Rs 2.5 lakh basic exemption threshold for the previous administration has not altered. Furthermore, under the previous tax system, the standard exemption ceiling for senior adults aged 60 to 80 was Rs 3 lakh, while for super senior citizens above 80, it was Rs 5 lakh.
The fiscal deficit target for the current fiscal year, which ends in March 2025, was reduced from 4.9% of GDP to 4.8% in the budget. It is expected to drop even further, to 4.4% in the fiscal year, which ends in March 2026. Through household tax cuts, the fiscal 2026 budget will increase growth over the coming years by stimulating domestic demand, according to S&P Global.
Final Words
A variety of incentives have recently been put in place by the NDA administration to encourage adoption of the new tax system. But according to the administration, there are no plans to phase away the Old Tax Regime, which offered more exemptions and deductions.
The Modi administration offered $12 billion in tax cuts in its annual budget on Saturday, the largest such relief in the nation’s history, to boost the economy. The decrease coincides with urban consumers delaying purchases as household incomes have been hit by rising prices and declining salaries. The action “is one way of boosting domestic demand drivers rather than relying on external” forces for development and will increase middle-class spending power.
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