NEW DELHI, Feb. 1 (Xinhua) -- India's middle class got a huge tax relief in the budgetary proposals for the fiscal year 2025-26 announced by federal Finance Minister Nirmala Sitharaman on Saturday.
According to the budgetary proposals, people earning a salary of up to 1.2 million Indian Rupees (around 13,841 U.S. dollars) annually shall not have to pay any income tax. Currently, this limit is 700,000 Indian Rupees (around 8,074 dollars).
However, those earning up to 1.2 million Indian Rupees in a year shall have to make certain deposits in national saving schemes in order to claim tax-rebates, thus reducing their tax liability to zero.
"I am now happy to announce that there will be no income tax payable up to income of 1.2 million Indian Rupees (i.e. average income of 100,000 Rupees per month other than special rate income such as capital gains) under the new regime," Sitharaman said while presenting the federal Budget 2025-26 in parliament's lower house "Lok Sabha".
This limit will be 1.275 million Indian Rupees (around 14,706 dollars) for the salaried tax payers, due to standard deduction of 75,000 Indian Rupees (around 865 U.S. dollars), she stated.
According to an official statement issued by the federal finance ministry, the new tax structure will substantially reduce the taxes of the middle class and leave more money in their hands, thus boosting household consumption, savings and investments.
"Revenue of about 1 trillion Indian Rupees (around 11.53 billion dollars) in direct taxes will be forgone," said the statement.
In other Budget Estimates for FY 2025-26, the total receipts (other than borrowings) and the total expenditure are estimated at 34.96 trillion Indian Rupees (around 403 billion dollars) and 50.65 trillion Indian Rupees (around 584 billion dollars), respectively.
Besides, the net tax receipts are estimated at 28.37 trillion Indian Rupees (around 327 billion dollars), while the fiscal deficit is estimated to be 4.4 percent of the Gross Domestic Product (GDP). The gross market borrowings are estimated at 14.82 trillion Indian Rupees (around 171 billion dollars). ■