Finance Minister Nirmala Sitharaman on Sunday said that Prime Minister Narendra Modi heard taxpayers' voice and supported cuts in income tax. When asked how she convinced PM Modi for the tax reforms, she said, "The question should be how much it takes for me to convince the ministry, the boards. It is not so much the PM. The PM was very clear that he wanted to do something. It is for the ministry to have had the comfort level and then go with the proposal."
The finance minister said the government had been working for some time to simplify direct taxes, focusing on reducing the compliance burden and addressing taxpayers' concerns. "Wherever I travelled, the common sentiment was, 'We are proud and honest taxpayers. We want to continue serving the country by fulfilling our tax obligations. But would you consider what can be done for us?'" she said.
On Saturday, Sitharaman proposed massive tax cuts for the middle class in Budget 2025. As per the new tax slabs, individuals earning up to Rs 12 lakh in a year will not have to pay any taxes. The finance minister raised the exemption threshold from Rs 7 lakh to Rs 12 lakh.
An additional Rs 75,000 standard deduction is available for the salaried class. Presenting her eighth straight budget, Sitharaman also altered tax slabs for people earning above this threshold to help save up to Rs 1.1 lakh in taxes for those with income up to Rs 25 lakh in a year.
Presenting her eighth consecutive budget, Finance Minister Sitharaman announced revised tax slabs that will allow individuals earning up to Rs 25 lakh annually to save up to Rs 1.1 lakh in taxes. She stated that the increased rebate will result in 1 crore taxpayers no longer having to pay any income tax.
Additionally, the overall restructuring of tax slabs is expected to benefit around 6.3 crore people, covering over 80% of the country’s taxpayers. “The new structure will significantly reduce the tax burden on the middle class, leaving more money in their hands and boosting household consumption, savings, and investment,” she said.