'Even If You Earn One Rupee Over Rs 12 Lakh...': Raghav Chadha Hits Back At Nirmala Sitharaman's Charges

Raghav Chadha said the Finance Minister made sarcastic comments against his statement and accused him of misleading the House.

AAP Rajya Sabha MP Raghav Chadha on Friday criticised Union Finance Minister Nirmala Sitharaman for her remarks in Parliament about his understanding of taxation, labelling her response a "personal attack" and pledging her to refrain from such remarks.

He has strongly reacted to Sitharaman’s remarks during the Rajya Sabha discussion on the Union Budget 2025-26. Speaking over the issue over a video message on X, Chadha said the Finance Minister made sarcastic comments against his statement and accused him of misleading the House. However, he was not allowed to clarify his stance in the Rajya Sabha, leading him to address the matter directly.

Raghav Chadha clarified his position, stating that his Union Budget speech addressed several pressing issues, such as challenges faced by railway passengers, financial hardships for the middle class, tariffs imposed by the Donald Trump administration, and the rupee's depreciation. However, he noted that the Finance Minister overlooked these significant concerns and instead singled out one example he used to illustrate the concept of an income tax rebate.

“I stand firmly by what I said,” asserted the AAP MP. “The Rs 12 lakh tax relief provided by the government is neither a tax exemption nor a tax deduction; it is purely a tax rebate. This means that if someone earns even a single rupee beyond Rs 12 lakh in a financial year, they will have to pay income tax on their entire income. The Finance Minister attempted to technically complicate my example by using marginal tax relief in her calculations, " he said.

Raghav Chadha On Marginal Tax Relief

Explaining the concept of marginal tax relief, which is applicable up to Rs 12.75 lakhs, he added “For example, if a person earns Rs 13 lakh annually, should they pay income tax on the entire Rs 13 lakh based on their respective tax slab, or only on the Rs 1 lakh exceeding Rs 12 lakh? The correct answer is that they will have to pay tax on the entire Rs 13 lakh."

Raghav Chadha gave another example, explaining that if an individual earns Rs 12,76,000 annually, they will be taxed on the entire amount, not just on the Rs 76,000 exceeding the Rs 12 lakh threshold.  

He emphasised that his example was meant to clarify the concept of a tax rebate and reiterated his stance that even if someone earns just Rs 1 over Rs 12 lakh, their tax is calculated on the full income.

Chadha also voiced his disappointment over the personal remarks made by the Finance Minister. “She made personal charges against me. I will not respond to those charges, however, I say that I have immense respect and regard for the Finance Minister. She is far more experienced, senior in position, and older than me. My only hope is that in the future, she refrains from making such personal remarks and further that she refrains from confusing the public with technicalities in order to digress from the real issue,” he said.

Chadha’s remarks followed after Sitharaman's response in the Rajya Sabha on Thursday countering his criticism and accusing him of misrepresenting the taxation structure. She explained that marginal relief significantly reduces the tax burden for those earning above Rs 12 lakh.

“Raghav Chadha shouldn’t mislead the House by claiming that a person earning beyond Rs 12 lakh will be taxed on the entire amount without relief. That is not the case,” Sitharaman asserted.