Sat Feb 01 11:38:39 UTC 2025: ## India’s Budget 2025: Tax Reliefs for Middle Class, New Direct Tax Code Incoming

**New Delhi, India** – Finance Minister Nirmala Sitharaman unveiled India’s Union Budget 2025 on Saturday, featuring significant tax reforms aimed at boosting the middle class and simplifying the tax system. The budget, described by Prime Minister Narendra Modi as a “people’s budget,” introduces a revised income tax structure that makes income up to ₹12 lakh (approximately $146,000 USD) tax-free.

This increase in the rebate ceiling from ₹7 lakh to ₹12 lakh will benefit an estimated 10 million taxpayers, eliminating their income tax liability. The effective tax-free threshold is even higher at ₹12.75 lakh due to a raised standard deduction of ₹50,000.

The changes mean significant savings for many. For example, individuals earning ₹8 lakh will pay only ₹20,000 in tax under the new system, a ₹10,000 reduction compared to the previous structure. Even high-income earners will see benefits, with those earning ₹24 lakh or more saving at least ₹1.1 lakh annually.

Sitharaman clarified the revised tax slabs with examples during a post-budget press conference, addressing initial confusion surrounding the changes. She emphasized that the reforms are a direct response to public demand, reiterating the government’s commitment to tax simplification.

Further tax measures include rationalization of Tax Deducted at Source (TDS) rates, a doubling of the tax deduction limit for senior citizens to ₹1 lakh, and an extension of the deadline to file updated tax returns to four years.

The Finance Minister also confirmed the introduction of a new direct tax code, which will be tabled in Parliament next week. She highlighted that the budget prioritizes six key sectors, including health and education, with ongoing reforms in these areas.

The budget’s focus on substantial tax relief for the middle class is expected to stimulate consumer spending and contribute to the government’s goal of achieving a “developed India” by 2047.

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