Report Suggests Tax Relief for Income Up to Rs 15 Lakh

As per the sources, individuals making up to Rs 15 lakh a year can get significant tax benefits in the upcoming Budget 2025-26. These actions are anticipated to increase disposable income and stimulate the nation's economic growth.

The step could benefit millions of taxpayers, especially those residing in expensive urban regions.

Currently, under the new system, income up to Rs 3 lakh is tax-exempt, while earnings between Rs 3 lakh and Rs 6 lakh are taxed at 5%, Rs 6-9 lakh at 10%, Rs 9-12 lakh at 15%, Rs 12-15 lakh at 20%, and income above Rs 15 lakh at 30%. An income of up to Rs 7.75 lakh is exempt from taxes due to a standard deduction of Rs 75,000.

A significant portion of India's income tax revenue comes from individuals earning a minimum of Rs 10 lakh, who are taxed at a rate of 30%. It is reported that the basic exemption limit could rise from Rs 3 lakh to Rs 4 lakh, along with changes to other tax brackets.

For instance, the 5% tax bracket might apply to incomes ranging from Rs 4 lakh to Rs 7 lakh, thereby making the tax system more advantageous for those earning up to Rs 14 lakh.

Experts propose that raising tax thresholds by Rs 1 lakh each could significantly lower tax burdens, thereby encouraging higher spending.

Increasing the disposable income of the middle class could stimulate the economy, which is the fifth largest globally and experienced its slowest growth in seven quarters from July to September.

It is important to highlight that the government has been under political pressure from the middle class due to high taxes, as wage growth struggles to keep up with inflation.

Rising food prices are also reducing the demand for products such as soaps, shampoos, cars, and motorcycles, especially in cities.

The expected changes are thought to be transformative, providing essential relief to taxpayers and boosting economic activity. If implemented, the Budget 2025-26 could greatly benefit both individuals and the economy as a whole.