There is a lot of enthusiasm in the middle class regarding the budget 2025-26 presented by Finance Minister Nirmala Sitharaman on February 1. In the last few budgets, the middle class did not get any major relief, but this time it is expected that the government can make some big announcements. Experts believe that the change in tax slabs in this budget can give a big relief to the middle class.
According to sources, the government is considering relieving middle class by changing income tax rates. This will not only improve the economic condition of the people, but will also get new energy to the slow economy. Let us know what benefits the middle class can get in budget 2025.
Budget 2025: 5 big announcements for middle class
| Declaration | Description |
| Changes in tax slab | Tax free can be made up to Rs 10 lakh |
| New tax slab | A new slab of 25% on income of Rs 15-20 lakh |
| Standard deduction | The current can increase from Rs 75,000 to Rs 1 lakh |
| Discount on home loan | Those who buy home for the first time can get additional discounts |
| Health insurance | Tax exemption limit on premium may increase |
| Education loan | Additional deduction on interest may be provided |
| Electric vehicle | Announcement of additional tax benefits on purchase is possible |
1. Big change in Income Tax Slabs
The biggest announcement in Budget 2025 may be a change in income tax slabs. According to sources, the government can fully tax-free the annual income of up to Rs 10 lakh under the New Tax Resetam. At present, there is no tax on income up to Rs 7.5 lakh.
Apart from this, a new tax slab of 25% can be brought on an income of Rs 15 to 20 lakhs. At present, 30% tax is levied on income of more than Rs 15 lakh. These changes will save more money with the middle class, which will increase the ability to spend and speed up the economy.
2. Standard deduction increases
The good news for salaried employees and pensioners is that the government can increase the limit of standard deduction. The current Rs 75,000 can be increased to Rs 1 lakh. This will directly benefit the salary class and reduce their tax liability.
3. Additional discount on home loan
The government can announce additional tax exemption on home loans to promote the real estate sector. Especially for the first time home buyers can be relieved. This will fulfill the dream of middle class to buy your home.
4. Big discount on Health Insurance premium
The importance of health insurance has increased after the Korona epidemic. Keeping this in mind, the government can increase the tax exemption limit on health insurance premium. The current 25,000 limit can be increased to Rs 50,000.
5. Relief on education loan
To encourage youth for higher education, the government can provide additional deduction in interest on education loans. This will reduce the financial burden falling on middle class families.
Possible change in new tax regime
The New Tax Resetam launched in 2020 does not provide some tax exemptions, but there is an option for deduction at low tax rates. According to data from the Income Tax Department, 72% taxpayers have adopted this new system. This system can be made more attractive in budget 2025.
Current New Tax Reseam Slab:
- ₹ 0 to ₹ 3,00,000: 0%
- ₹ 3,00,001 to ₹ 6,00,000: 5%
- ₹ 6,00,001 to ₹ 9,00,000: 10%
- ₹ 9,00,001 to ₹ 12,00,000: 15%
- ₹ 12,00,001 to ₹ 15,00,000: 20%
- Over ₹ 15,00,001: 30%
Potential new tax slab:
- ₹ 0 to ₹ 10,00,000: 0%
- ₹ 10,00,001 to ₹ 15,00,000: 10%
- ₹ 15,00,001 to ₹ 20,00,000: 25%
- Over ₹ 20,00,001: 30%
These changes will give a lot of relief to the middle class and will save more money to spend them.
Other possible benefits for middle class
Additional discount on Electric Vehicles
To promote environmental protection, the government can declare additional tax benefits on the purchase of electric vehicles. This will make it easier to buy e-vehicle for middle class.
Encourage digital payment
The government may declare some additional benefits on digital payment to promote the cashless economy. This will benefit the middle class in its daily transactions.
Focus on skill development
The government can increase spending on skill development programs to prepare youth for employment. This will provide better job opportunities to middle class youth.
Budget 2025 influence on economy
Experts believe that if the government gives relief to the middle class, it will directly affect the economy. People will have more money to spend, which will increase demand and increase production. This will create new employment opportunities and will speed up the speed of the economy.
However, the government will also have to take care of the revenue deficit. It is estimated that the government may suffer revenue loss ranging from Rs 50,000 crore to Rs 1 lakh crore from these tax deals. But this will benefit the economy in the long run and there will also be an increase in tax collection.
Middle class expectations
Middle class hopes that the budget of this time will be relieved for them. They want:
- Changes in tax slabs
- Standard deduction increased
- Additional discounts on home loans
- Get more discounts on health insurance premium
- Get relief on education loan
- Additional benefits on electric vehicles
conclusion
Budget 2025 is quite important for middle class. If the government meets their expectations, then it will not only relieve the middle class, but will also speed up the entire economy. However, it has to be seen how the government balances the revenue deficit and economic growth.
Disclaimer: This article is based only on estimates and opinions of experts. What announcements will be in the budget will be known only on 1 February. Readers are advised to wait for official announcements before taking their financial decisions.
