New Delhi, Feb 1: In a significant move aimed at providing relief to middle-income taxpayers, Finance Minister Nirmala Sitharaman today informed that one crore Indians will be removed from the income tax net.
Speaking at a post-Budget press conference, she confirmed, "One crore people will pay no tax," in response to a question about the number of taxpayers who will benefit from the new proposals.
The Finance Minister also provided updates on the government's ongoing efforts to simplify the tax system, noting that the income tax simplification process, which was announced in the July Budget, has already been completed. She stated that the bill for the new tax framework would be introduced in Parliament next week.
In her Union Budget 2025 speech, Sitharaman revealed that no income tax would be levied on income up to Rs 12 lakh, offering significant relief to taxpayers, particularly in the middle-income bracket. Previously, this limit was set at Rs 7 lakh. For salaried taxpayers, the exemption limit will rise to Rs 12.75 lakh, including a Rs 75,000 standard deduction.
Finance Secretary Tuhin Kanta Pandey highlighted the evolution of the tax exemption threshold over the years, noting that it has increased steadily from Rs 2.2 lakh in 2014 to Rs 2.5 lakh, then to Rs 5 lakh in 2019, and later to Rs 7 lakh. "Now it is being raised to Rs 12 lakh," he said.
These changes are expected to result in a loss of approximately Rs 1 lakh crore in direct tax revenue and Rs 2,600 crore in indirect taxes, as per government estimates.
