
Budget 2025 Highlights For Middle-Class Family
The Union Finance Minister Nirmala Sitharaman finally presented the eagerly awaited Union Budget 2025 today on the 1st of February 2025. This budget serves as a roadmap for the country’s economic growth, technological advancements, as well as social welfare. She announced the launch of various schemes and major reforms that will significantly affect middle-class families. Hence, it is absolutely necessary for everyone to understand how this budget will affect you and your family’s income and well-being. This article brings you all the details about how the Union Budget 2025 will affect the middle class. This includes information about the tax reforms and reliefs for the middle class.
No Income Tax For Earnings Up To INR 12 Lakhs
Union Finance Minister Nirmala Sitharaman during her Budget 2025 presentation in the parliament announced the new tax system. According to the updated tax system, people who have earnings up to INR 12 Lakhs will have to pay 0 per cent income tax. This limit for the salaried taxpayers is INR 12.75 Lakhs with a basic deduction of INR 75,000/-.
The newly established tax slabs will significantly affect the lower middle-class families who are taxpayers. The previous tax slabs would take a significant share of the income of these middle-class families which is why these reforms were absolutely necessary. The new tax slabs will finally leave some amount in the taxpayer’s hands increasing household consumptions, savings, and investments.
Also read: Budget 2025 Highlights For MSME Sector: MSME Credit Guarantee Doubled to ₹10 Cr
New Income Tax Slabs Established With Budget 2025
According to the new income tax slabs, individuals with earnings up to INR 12 Lakhs will not pay any income tax. For individuals having earnings more than INR 12 Lakhs, they will have to pay a 5% tax on incomes between INR 4 Lakhs to INR 8 Lakhs. The individuals having income between INR 8 to INR 12 Lakhs will have to pay 10% tax. The individual with income between INR 12 to INR 16 Lakhs will have to pay 15% tax.
The individual with income between INR 16 Lakhs to INR 20 Lakhs will have to pay 20% tax. The individual with income between INR 20 Lakhs to INR 24 Lakhs will have to pay 25% tax. The individual with an income of more than INR 24 Lakhs will have to pay up to 30% tax.
TDS on Rent: Exemption Limit Raised From INR 2.4 Lakh to INR 6 Lakh
The finance minister Nirmala Sitharaman also announced major changes to tax deduction at source in her speech while presenting the Union Budget 2025. The annual TDS exemption list is now raised from INR 2.4 Lakhs to INR 6 Lakhs. Sitaraman in her presentation speech explained that this move will significantly reduce the number of transactions liable for TDS. Thus, benefitting the small taxpayers who receive small payments.
She also proposed a simplification of the TDS framework with a reduction in the number of rates and a rise in threshold amounts for better uniformity and clarity. Sandeep Chilana who is the Managing Partner of CCLaw appreciated the TDS changes. In an official statement, the planned rationalization will definitely reduce the confusion and complexity across various sectors.
TDS Exemptions For Senior Citizens: Income Limit Doubled From INR 50,000 To INR 1 Lakh
Along with the TDS exemptions on rent, Nirmala Sitharaman has also announced an exemption on TDS for senior citizens. Sitaraman in her Union Budget 2025 presentation speech declared the tax deduction income limit being doubled from INR 50,000 To INR 1 Lakh. This is definitely a major relief for senior citizens who are active taxpayers. The reductions will mean that the senior citizens will have to pay less taxes now.
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Revenue Forgone in Direct Taxes: Rs.1 lakh crore
Nirmala Sitaraman also stated in her speech that as a result of the proposals the government has made, the government will forgo revenue of around INR 1 Lakh Cr indirect taxes. The government will also forgo revenue forgo revenue of around INR 2,600 Cr in indirect taxes.
Special Scheme Launched For Affordable Housing
The Union Budget 2025 also announced a Special Window For Affordable and Mid-Income housing. Around 50,000 dwellings have already been handed over to middle-class families at affordable prices. Another 40,000 housing units will be handed over this year under the scheme. This will help families who have taken home loans to buy apartments and have to pay interest while simultaneously paying house rent.
In the upcoming years, SWAMIH Fund 2 worth INR 15,000 Cr will gather contributions from the government as well as the private investors will complete another 1 lakh units for middle-class families.
UDAN Scheme Remodified
UDAN Scheme has a successful record of making travelling easy for more than 1 Cr middle-class people. The scheme successfully connected around 88 airports and made 619 routes operational. The new union budget 2025 has now remodified the UDAN scheme for the enhancement of regional connectivity. The scheme will open connectivity options for 120 new locations. It will also support the establishment of helipads and small airports in northeastern hilly regions which will definitely increase connectivity and help middle-class families travel effectively.
Final Thoughts on Union Budget 2025 – 26
Union Finance Minister Nirmala Sitharaman has launched various important schemes and announced multiple relaxations for the betterment of middle-class families. The change in tax slabs as well as the TDS exemptions will affect the middle-class taxpayers in a positive way. The taxpayers will have to pay a lesser section of their income in taxes and have more money in hand for their expenditures.