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Budget: After PM Modi’s hint, ‘Maa Lakshmi’ showers blessings on Middle Class taxpayers

TFI Desk by TFI Desk
1 February 2025
in Economy, Politics, Trending
Eyeing Delhi election, Modi govt gives major relief for Middle Class

Eyeing Delhi election, Modi govt gives major relief for Middle Class (Image Source - The Hindu)

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Ahead of the start of the Budget Session on 1st of Febraury, Prime Minister Narendra Modi after reminiscing the Maha Lakshmi mantra had stated that he prays to the Goddess Lakshmi to have special blessings on the poor and the middle class.

He said, “Ahead of the Budget Session, I bow down to Maa Lakshmi, the goddess of wealth and prosperity. I pray that Maa Lakshmi continues to bless the poor and middle class of our country.” Many speculated this as a hint by the Prime Minister regarding major relief for the Middle class in the budget and the speculations came up to be true.

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Finance Minister Nirmala Sitharaman, in her Union Budget 2025 speech, announced a major tax relief for salaried individuals by raising the minimum taxable income to ₹12 lakh under the new tax regime. The move can also be seen as BJP coming up with its best card to sweep the Delhi Elections, a city dominated by middle class section. 

Nirmala Sitharaman announced that with an additional ₹75,000 standard deduction, individuals earning up to ₹12.75 lakh will now pay zero income tax. The government has also introduced new tax slabs, significantly reducing the tax burden across income levels.

Also Read: Budget: FM Nirmala Sitharaman overhauls Income Tax slab, income upto Rs 12 LPA exempted from tax

Under the revised structure, income up to ₹4 lakh is tax-free, while earnings between ₹4-8 lakh are taxed at 5%, ₹8-12 lakh at 10%, ₹12-16 lakh at 15%, ₹16-20 lakh at 20%, ₹20-24 lakh at 25%, and above ₹24 lakh at 30%. By raising the tax exemption limit from ₹7 lakh to ₹12 lakh, the government aims to stimulate demand in the economy while encouraging higher savings and investments. 

According to Manmeet Kaur, Partner at Karanjawala & Co, the budget prioritizes democracy, demography, and demand, recognizing the needs of the middle class. The revised tax structure reflects a pro-business and pro-middle-class shift, ensuring financial stability while promoting economic growth through increased spending and investment opportunities.

The major announcement by Finance Minister Nirmala Sitharaman regarding tax exemption for incomes up to ₹12 lakh has brought a wave of happiness and relief to the middle class across the country. This move is expected to significantly ease the financial burden on salaried individuals, allowing them to save and invest more, ultimately boosting consumption and economic growth. Moreover, this decision can also be viewed as a strategic move by the Bharatiya Janata Party (BJP) ahead of the upcoming Delhi elections. Given that Delhi has a large middle-class population, the tax exemption is likely to resonate strongly with voters in the National Capital. By putting more disposable income in the hands of salaried professionals and small business owners, the government aims to garner support from this crucial voter base. With the middle class forming the backbone of Delhi’s electorate, this announcement could work in favor of the BJP’s electoral prospects, positioning it as a pro-middle-class party.

Tags: AAPBJPBudgetBudget 2025Delhi Electionsincome taxMiddle ClassNirmala SitharamanParliament
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