Amid growing financial pressures on India’s middle-class, Finance Minister Nirmala Sitharaman acknowledged their struggles while outlining potential measures aimed at providing relief. In an interview with Times Now, the finance minister emphasized her commitment to addressing middle-class concerns despite fiscal constraints.
In her latest address, Sitharaman referred to the adjustments made in the previous budget, such as increasing the standard deduction from ₹50,000 to ₹75,000. She explained, “To make a difference for salaried people, we’ve made incremental changes without straining the government’s finances.”
The standard deduction increase is part of broader efforts to ease the financial burden on middle-income earners. However, the finance minister expressed a desire to do more while acknowledging the limitations posed by the country’s taxation system.
The government is reportedly exploring significant reductions in income tax rates for individuals earning up to ₹15 lakh annually. If implemented, these changes could impact millions of urban taxpayers facing high living costs and serve as a much-needed relief amidst rising inflation.
Under the existing 2020 tax regime:
Proposed reforms aim to simplify tax structures further, making the optional tax system more appealing to taxpayers who opt out of traditional exemptions such as those for housing rentals.
Beyond taxation, Sitharaman discussed initiatives targeting education and housing, two critical areas affecting middle-class households:
The urgency for tax relief arises from several economic challenges:
The proposed tax relief and policy reforms align with the government’s broader objective of stimulating consumption. By increasing disposable income, the government hopes to counter economic headwinds and encourage spending across critical sectors.
With the upcoming budget just weeks away, the government’s strategy appears clear:
The middle class remains a crucial demographic for driving India’s economic recovery, and all eyes will be on how the next budget addresses their needs.
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