significant step fSpecial Correspondent
New Delhi: In a historic move, the Modi government has given a major relief to the middle class in the Union Budget by making annual income up to ₹12 lakh completely tax-free. This decision, which will cost the government nearly ₹1 lakh crore in revenue loss, is expected to boost spending power and accelerate economic growth. Overall, this move is seen as a major relief for the middle class, ensuring more savings and increased spending power, which in turn is expected to boost the economy.
Experts believe that no government in the past has taken such a significant step for the benefit of middle-class taxpayers. The decision has been widely appreciated across the country, with many thanking the Modi government for this unprecedented tax relief.
Union Finance Minister Nirmala Sitharaman announced this major reform in her budget speech. According to the new tax structure, individuals earning up to ₹12 lakh annually will not have to pay any income tax, while those earning above this threshold will be taxed accordingly. This marks a significant shift in the country’s taxation system, benefiting millions of salaried professionals.
The budget also provides additional relief for senior citizens. The tax exemption on interest income has been doubled from ₹50,000 to ₹1 lakh. Additionally, the government has announced reductions in TDS (Tax Deducted at Source) and TCS (Tax Collected at Source) rates, further benefiting taxpayers.
With this tax relief, individuals will have more disposable income, leading to increased consumer spending. The electronics sector, particularly smartphones, laptops, and tablets, is expected to see a surge in demand. According to market analysts, a person earning ₹1 lakh per month is likely to save an additional ₹80,000 annually due to tax restructuring. A significant portion of this saved amount is expected to be spent on consumer goods.
Experts predict that the smartphone industry will witness a major boost. Typically, consumers allocate 20% of their monthly salary towards purchasing a new smartphone. With additional savings from the new tax regime, individuals will be able to afford higher-end models, moving from ₹20,000 phones to those in the ₹40,000 range. This move is expected to deepen India’s mobile manufacturing ecosystem and increase value addition in the electronics industry.
Economists and financial analysts have welcomed the new tax slabs and rebates, considering it a progressive step toward simplifying the taxation system. However, it is important to note that the old tax regime remains unchanged, with no major announcements for taxpayers who continue to follow it.
