Impact of Budget on Personal Income Tax and Middle-Class Spending By Mr. Narinder Wadhwa, Managing Director & CEO of SKI capital
Below The Impact of Budget on Personal Income Tax and Middle-Class Spending By Mr. Narinder Wadhwa, Managing Director & CEO of SKI capital
In the Union Budget 2025, significant changes have been introduced to the personal income tax structure to enhance the spending power of the middle class and stimulate economic growth. One of the key reforms is the increase of the nil personal income tax slab to 1.2 million, meaning that individuals with an annual income up to 12 lakh are now exempt from paying income tax.
This adjustment is a substantial shift from the previous tax regime, where incomes above 10 lakh were taxed at 30%. By raising the exemption limit, the government aims to increase disposable income for a significant portion of the population, thereby boosting consumption and contributing to economic growth.
For individuals earning exactly 12 lakh annually, this change eliminates their income tax liability, effectively increasing their net income. This move is expected to positively impact consumer spending and provide financial relief to the middle class.
It is important to note that these changes are part of the government's broader strategy to support inclusive development and stimulate private investment. As with any policy change, it is advisable for taxpayers to review the new tax provisions in detail or consult with a tax professional to understand how these changes specifically affect their financial situation.
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