Middle Class Gets Tailored Tax Break

No income tax up to Rs 12 lakh, nearly 1 crore to exit tax bracket; Budget bets big on infrastructure, social welfare

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NEW DELHI: With a sweeping set of tax cuts and ambitious economic reforms, Finance Minister Nirmala Sitharaman unveiled the Union Budget 2025-26 on Saturday, offering relief to millions of middle-class taxpayers while charting a bold roadmap for ‘Viksit Bharat’.

The Budget, amounting to Rs 50.65 lakh crore, marked an increase of 7.4 per cent over the previous fiscal, balancing economic growth with financial prudence.

One of the major highlights of the Budget was the enhancement of the income tax exemption threshold. Individuals earning up to Rs 12 lakh per year will now be exempt from paying taxes, up from the previous limit of Rs 7 lakh.

Additionally, a standard deduction of Rs 75,000 has been introduced for salaried individuals, leading to substantial tax savings.

The revised tax slabs are set to benefit 6.3 crore taxpayers, with savings of up to Rs 1.1 lakh for individuals earning up to Rs 25 lakh annually. "The new structure will substantially reduce taxes on the middle class and leave more money in their hands, boosting household consumption, savings, and investment," Sitharaman stated in her speech.

She further highlighted that these reforms would result in nearly 1 crore individuals falling out of the tax bracket altogether, significantly reducing the tax burden on the middle class.

The government has earmarked Rs 5.41 lakh crore for Centrally Sponsored Schemes in FY26, compared to Rs 4.15 lakh crore in the current year. Meanwhile, central sector schemes have been allocated Rs 16.29 lakh crore, reflecting a focus on infrastructure and social welfare.

Capital expenditure has been Budgeted at Rs 11.22 lakh crore, with an effective capital expenditure of Rs 15.48 lakh crore. Additionally, Rs 25.01 lakh crore will be transferred to states, marking an increase of Rs 4.91 lakh crore over the previous fiscal.