Finance Minister Nirmala Sitharaman has defined Budget 2025-26 as a budget by the people, of the people, for the people. She said that the idea of giving the gift of tax cuts to the middle class had the full support of Prime Minister Narendra Modi, but it took time to convince the public servants.
We listened to the voice of the middle-class
The Finance Minister said in an interview that we listened to the voice of the middle class. The middle class had been complaining for a long time that despite paying taxes honestly, no steps were being taken to fulfill its aspirations. Taxpayers paying tax on income wanted the government to take such steps so that they could easily face inflation and other challenges of life.
This concern was troubling the officials.
The Prime Minister gave the task of finding a way to provide relief to this class to Nirmala Sitharaman. Prime Minister Modi immediately agreed to a big tax cut, but it took some time to prepare the officials of the Finance Ministry and the Central Board of Direct Taxes (CBDT). These officials were worried that such a big tax cut would lead to difficulties in raising revenue.
No tax on income of Rs 12 lakh
Resources are needed for other expenses including the schemes being run by the central government for social welfare. The allocation for these schemes is also usually increased in every budget. Presenting her eighth budget on Saturday, Sitharaman has announced to increase in the limit of personal income tax. With this, the tax liability on income up to Rs 12 lakh has now become zero.
Changes have also been made to the tax slab.
Earlier income up to Rs 7 lakh was tax-free. Apart from this, changes have also been made in the tax slab. This will help those earning more than Rs 12 lakh to save up to Rs 1.1 lakh. Increasing the tax exemption limit to Rs 5 lakh at one time is the biggest relief so far. This is equal to all the tax relief given between 2005 and 2023.
The Finance Minister said, 'I believe the Prime Minister has presented this tax relief very well in many words. She said this is the budget of the people, this is the budget that people wanted. When asked to define the budget in her own words, Nirmala Sitharaman said 'As Abraham Lincoln says in democracy, this budget is by the people, of the people, for the people.'
Savings and investments will get a boost.
Sitharaman said that the new rates will reduce the tax burden on the middle class and they will have more money. This will boost domestic consumption, savings, and investment. Clarifying the idea behind the announcement of big tax relief, Sitharaman said that work was going on for some time.
One idea was to simplify the rules of direct tax and make compliance easier. Work started on this in the July 2024 budget and now the new law is going to come. The new law will simplify the language of the rules, compliance will be easier and it will also be a bit user friendly.
Modi government listens to the people.
She said, 'Similarly, the middle class expressed its feelings after the interim budget in July. He felt that he was paying taxes... but the government was not doing anything special to solve his problems. People were also saying that the government was adopting a more inclusive approach to take care of the poor and the underprivileged.'
The Finance Minister said, 'Wherever I went, I heard such voices. We pay taxes honestly. We want to serve the country as good taxpayers. But what can you do for us?' She said that I talked to the Prime Minister about this and he asked me to see what solution could be found.
I am very happy to be a part of this government, which listens to the people and takes steps accordingly. The Finance Minister said that continuous efforts are being made to increase the tax net. There are many people whose income is within the scope of the tax. Such people should be brought into the tax net.
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