Union Budget 2025: Relief for the Middle Class! No Tax on Income Up to ₹5 Lakh in the Old Tax Regime
Finance Minister Nirmala Sitharaman is set to present the Union Budget on February 1, 2025.
Experts from various fields are putting forward their demands to the government regarding this budget.
Among them, former Infosys CFO Mohandas Pai has urged Prime Minister Narendra Modi and the Finance Minister to provide relief to the middle class. He has called for changes in the tax slabs to reduce the increasing burden on taxpayers.
Mohandas Pai pointed out that the current tax slabs are placing a significant burden on the middle class. He emphasized the need to lower and adjust them, providing several suggestions.
Additionally, it has been recommended to exempt income up to ₹7.5 lakh for citizens above 60 years and up to ₹10 lakh for those above 70 years of age.
Mohandas Pai noted that the middle class bears the heaviest tax burden. Over the past three years, there has been a 114% increase in personal tax collection. However, no relief has been provided for the middle class in terms of income and savings. Rising inflation, increasing school and college fees, and essential expenses leave the middle class with little money for other expenditures.
The benefit of deductions on housing loans is limited to those who take loans. This affects only 1.2 crore out of 3.5 crore taxpayers. He suggested that the budget should introduce schemes to ensure the middle class has more money for discretionary spending.
Mohandas Pai also addressed the issue of tax disputes. In 2014, the disputed tax amount was ₹4.5 lakh crore, which has increased to ₹12.5 lakh crore by 2025. He attributed this to the failure of the Income Tax Department and the government. He called for 2025-26 to be declared as the year for resolving tax disputes.
He added that the government spends over ₹9 lakh crore on subsidies for the poor. However, the issues of the middle class are often neglected. He stressed the need to address the grievances of the middle class by providing them relief. The middle class has high expectations from the 2025 budget. It remains to be seen what measures the government takes for them and how effectively their issues are addressed.
