Will Middle Class Taxes Be Cut? Pre-Budget Analysis

28 Jan 2025 , 09:32 AM

With the middle class taxpayer struggling to keep up with rising costs, there is increasing expectation that income tax rates would be lowered as the budget draws near. According to a January 27 ToI article, the government is intending to maintain the new tax regime without any further concessions in the lead-up to Budget 2025, while also taking threshold and slab structure changes into consideration.

Usually, income tax rates are one of the last things decided upon throughout the budgeting process. Various stakeholders, including businesses and economists, have urged for a reworking of tax rates in the lead-up to this year’s Budget, which will be delivered on Saturday, in order to lessen the burden on taxpayers, especially the middle class.

According to Finance Minister Nirmala Sitharaman, last year’s modifications to tax slabs and an increase in the standard deduction for salaried individuals to Rs 75,000 will provide taxpayers a net gain of Rs 17,500.

Discussions inside the government have focused on raising the standard deduction even further in advance of the next budget. It is anticipated that this action will significantly alleviate the burden on all taxpayers. Proposals to reduce tax obligations across several slabs, including higher income categories, are also a result of mounting pressure to let middle-class consumers keep more of their money.

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