Happy early Diwali. Or should we say, belated Happy New Year? Whatever your preferred greeting, here’s the takeaway — FM Nirmala Sitharaman Saturday unveiled a Budget bonanza for taxpayers, particularly the middle class, which has been reeling under the double impact of a slowing economy and rising prices.
Union Budget 2025
PM Modi had strongly hinted at it on Friday. So had President Murmu.The FM came through in style, taking an axe to taxes and giving away Rs 1 lakh crore in income tax — a record in absolute terms. There will be a rebate on annual income up to Rs 12 lakh, compared with Rs 7 lakh currently, and higher limits across slabs under the new regime. For the salaried, who also get standard deduction of Rs 75,000 under the new regime, the rebate will mean zero tax liability for those with income of up to Rs 12.75 lakh, the FM said.
As a result of the changes, almost 1 crore of the 3 crore Indians who actually pay taxes will now legally escape the net — though they’ll still have to file returns to avail of the rebate. Those who still pay taxes will save amounts ranging from Rs 30,000 to Rs 1.1 lakh a year, depending on their income level.
While vast sections of the middle class will gain, the big beneficiaries are those with taxable income of Rs 15 lakh-24 lakh, who were earlier in the highest slab of 30% and will now face levies of 15% to 25%.
Across the board 4% cess and escalating surcharges from Rs 50 lakh upward.
Will FM’s middle path lure Delhi, Bihar voters?
A Budget is as much a political as an economic exercise. And you didn’t need to look any farther than this one for evidence.
Delhi votes on Wednesday, Bihar in Oct or Nov this year. The Budget has gone the extra nine yards to woo them. For Delhi — India’s richest city by per capita income and with a large middle class straddling govt employees, private sector and business — the big tax giveaway was a loud & clear signal.
Nirmala bats for middle-order.
Given that AAP’s core voter base is thought to be low-income earners, and amid reports that the capital’s middle class is wavering, the Modi govt appears to be hoping to tip them over to the side of saffron.
As for Bihar — critical for BJP and ally Nitish Kumar’s JDU — the number of times it kept cropping up in Nirmala Sitharaman’s speech could have left no one in any doubt as to the NDA govt’s intent to retain the state. She announced the setting up of a Makhana Board and a National Institute of Food Technology, expansion of IIT-Patna, promotion of tourism around key Buddhist centres, and support for the Western Kosi canal. And for good measure, she draped herself in a sari with a Madhubani motif — a traditional folk art from Bihar.
All this comes on top of schemes for Bihar in last year’s Budget. The political message couldn’t have been more unambigous: BJP-JDU will take the fight to RJD-Cong.
