Less Tax, More Savings: What Budget 2025 Means For The Middle Class

Big Relief For 31% Population

The 2025 Budget brings major tax relief for India’s middle class, impacting millions of taxpayers. Here’s everything you need to know about the new tax proposals, their impact, and how they shape India’s financial future.

India's Middle Class in Numbers

India has a Middle Class population of 45 crore, and 10.4 crore of them file Income Tax.

Tax-Free Income Limit Increased

Union Budget 2025 has announced that no tax will be charged (under New Regime) from salaried individuals earning up to Rs 12 lakh per annum — Rs 12.75 lakh after factoring in Rs 75,000 standard deduction.

Biggest Change In Years!

30% tax rate now applies above ₹24 Lakh (up from ₹15 Lakh) with 60% slab adjustment for inflation.

Tax Savings In 2025 Vs 2024

If someone is earning Rs 25 lakh annually, they were paying Rs 4.57 lakh as tax in 2024-25. In 2025-26, they will be paying Rs 3.43 lakh as tax, saying Rs 9,500 more per month.

How This Affects Taxpayers

Higher tax exemption limit means more disposable income, bringing relief to millions of families.

Revenue Impact On Government

The tax rebates will cost Rs 1 lakh crore direct tax revenue loss, and Rs 2,600 crore indirect tax loss.

Higher Tax Collection Despite Rate Cuts

Despite lower tax rates, the Centre’s gross income tax receipts for 2025-26 are projected at Rs 14.38 lakh crore, a 21.1% increase from Rs 11.87 lakh crore in 2024-25.

More Money In Middle Class Hands

The tax benefit will boost savings, thereby increasing the spending power of people and encouraging investment.