Middle Class Celebrates Major Tax Break: No Tax on Income Up to ₹12 Lakh
inance Minister Nirmala Sitharaman unveiled the Union Budget 2025-26 today, introducing significant tax reforms aimed at bolstering the spending power of the middle class and stimulating economic growth. pivotal change is the elevation of the nil personal income tax slab to ₹12 lakh, effectively exempting individuals earning up to this amount from paying any income tax.
This adjustment marks a substantial increase from the previous threshold and is anticipated to enhance disposable incomes for a large segment of the population. The move aligns with the government’s broader strategy to promote inclusive development and encourage private investment.
In addition to the revised tax slabs, the budget proposes a reduction in the fiscal deficit to 4.4% of GDP for the fiscal year 2025-26, down from the revised estimate of 4.8% in the current fiscal year.
The government plans gross borrowings of ₹14.82 trillion and net borrowings of ₹11.54 trillion. The budget also outlines several sector-specific initiatives. six-year mission is set to launch, aiming to boost pulses output, alongside a five-year mission dedicated to cotton production. The agricultural programs are designed to enhance productivity and ensure food security.
In the manufacturing sector, the government is establishing a National Manufacturing Mission to provide policy support and further the ‘Make in India’ initiative. This includes enhancing credit guarantee cover for small and medium-sized enterprises to ₹100 million and setting up a fund of funds for start-ups with a government contribution of ₹100 billion.
Infrastructure development receives a significant boost with the provision of ₹1.5 trillion in 50-year interest-free loans to states.dditionally, a Maritime Development Fund with a corpus of ₹250 billion is announced, along with an Urban Challenge Fund worth ₹1 trillion to promote urban development projects.
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