There is a lot of enthusiasm among the middle class about the Budget 2025-26 to be presented by Finance Minister Nirmala Sitharaman on 1st February. The middle class did not get any major relief in the last few budgets, 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 provide great relief to the middle class.
According to sources, the government is considering providing relief to the middle class by changing the income tax rates. This will not only improve the economic condition of the people, but will also give new energy to the slowing economy. Let us know what benefits the middle class can get in Budget 2025.
Budget 2025: 5 big announcements for the middle class
| announcement | Description |
| change in tax slab | Income up to Rs 10 lakh can be tax free |
| new tax slab | New slab of 25% on income of Rs 15-20 lakh |
| standard deduction | It may increase from current Rs 75,000 to Rs 1 lakh |
| discount on home loan | First time home buyers may get additional discounts |
| health insurance | Tax exemption limit on premium may increase |
| education loan | There may be a provision for additional deduction on interest |
| electric vehicle | Announcement of additional tax benefits on purchases possible |
1. Big change in Income Tax Slabs
The biggest announcement in Budget 2025 could be the change in income tax slabs. According to sources, the government can make annual income up to Rs 10 lakh completely tax-free under the new tax regime. Currently there is no tax on income up to Rs 7.5 lakh.
Apart from this, a new tax slab of 25% can be introduced on income of Rs 15 to 20 lakh. Currently, income above Rs 15 lakh is taxed at 30%. With these changes, the middle class will be left with more money, which will increase spending power and boost the economy.
2. Increase in Standard Deduction
The good news for salaried employees and pensioners is that the government may increase the standard deduction limit. The existing limit of Rs 75,000 can be increased to Rs 1 lakh. This will directly benefit the salaried class and their tax liability will be reduced.
3. Additional discount on home loan
To boost the real estate sector, the government may announce additional tax exemption on home loans. Relief can be given especially to first time home buyers. With this, the dream of the middle class to buy their own house will be fulfilled.
4. Big discount on health insurance premium
The importance of health insurance has increased after the Corona epidemic. Keeping this in mind, the government can increase the limit of tax exemption on health insurance premium. The existing limit of Rs 25,000 can be increased to Rs 50,000.
5. Relief on education loan
To encourage youth to pursue higher education, the government can make a provision for additional reduction in interest on education loans. This will reduce the financial burden on middle class families.
Possible changes in the new tax regime
Some tax exemptions are not available in the new tax regime introduced in 2020, but there is an option for deduction at lower tax rates. According to Income Tax Department data, 72% taxpayers have adopted this new system. This system can be made more attractive in Budget 2025.
Current new tax regime slabs:
- ₹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%
- Above ₹15,00,001: 30%
Possible new tax slabs:
- ₹0 to ₹10,00,000: 0%
- ₹10,00,001 to ₹15,00,000: 10%
- ₹15,00,001 to ₹20,00,000: 25%
- Above ₹20,00,001: 30%
These changes will provide a lot of relief to the middle class and they will have more money left to spend.
Other potential benefits for the middle class
Additional discounts on Electric Vehicles
To promote environmental protection, the government may announce additional tax benefits on the purchase of electric vehicles. This will make it easier for the middle class to buy e-vehicles.
Encouragement to digital payment
To promote cashless economy, the government may announce some additional benefits on digital payments. This will benefit the middle class in their daily transactions.
Focus on skill development
To prepare the youth for employment, the government can increase expenditure on skill development programs. This will provide better job opportunities to middle class youth.
Impact of Budget 2025 on the economy
Experts believe that if the government provides relief to the middle class, it will have a direct impact on the economy. People will have more money to spend, which will increase demand and increase production. This will create new employment opportunities and accelerate the pace of the economy.
However, the government will also have to take care of the revenue deficit. It is estimated that due to these tax cuts, the government may suffer a revenue loss of Rs 50,000 crore to Rs 1 lakh crore. But in the long run this will benefit the economy and tax collection will also increase.
Middle class expectations
The middle class hopes that this time’s budget will be a relief for them. They want to:
- There should be changes in tax slabs
- Standard deduction increased
- Get additional discount on home loan
- Get more discount on health insurance premium
- Get relief on education loan
- Get additional benefits on electric vehicles
conclusion
Budget 2025 is very important for the middle class. If the government lives up to their expectations, it will not only provide relief to the middle class but will also give a boost to the entire economy. However, it remains to be seen how the government strikes a balance between revenue deficit and economic growth.
Disclaimer: This article is based only on speculations and expert opinions. What announcements will be made in the budget will be known only on February 1. Readers are advised to wait for official announcements before making their financial decisions.
