Janata ka Budget: A paradigm shift for neo middle class

The Union Budget for 2025 in India, presented by Finance Minister Nirmala Sitharaman, is a pivotal financial statement outlining the government's fiscal strategy for the upcoming financial year.

- DR.S.SUKANYA IYER

The Union Budget 2025 has balanced short-term economic boosts with long-term structural reforms, aiming to make India a more competitive and inclusive economy. It reflects a nuanced approach to navigating global economic uncertainties while pushing for domestic growth and innovation.

Tax benefits for middle class Individuals with an income of Rs 5.6 lakh or below will benefit from a tax rebate of Rs 1,10,000, reducing their effective tax rate to 21.6%.

This proposal aims to forgo revenue of about Rs 1 lakh crore in direct taxes.

Tax slabs and rates illustration: The table illustrates the changes in tax slabs and rates for different income levels, comparing the present system with the proposed one for FY 2025-26.

For incomes up to Rs 8 lakh, the tax liability reduces from Rs 30,000 to Rs 20,000 with the proposed changes.

There's a full rebate up to Rs 12 lakh income, significantly reducing the tax burden for those earning up to this amount.

Higher income brackets see a reduction in tax rates as well, with the tax after benefits shown in the last MAJOR ANNOUNCEMENTS Prime Minister Dhan-Dhaanya Krishi Yojana: This initiative will cover 100 districts with low productivity, aiming to help 1.7 crore farmers through enhanced credit parameters.

Mission for Aatmanirbharta in Pulses: A 6-year mission focusing on increasing domestic pulse production, particularly Tur, Urad, and Masoor, to improve productivity and farmer income while promoting climate-resilient seeds.

ANALYSIS Taxation Reform: The proposed tax changes are clearly aimed at providing relief to the middle class by lowering the effective tax rate for lower income brackets and offering substantial rebates. This could increase disposable income, potentially boosting consumption and economic activity.