Former BJP MP suggests tax relief for the middle class as government weighs revisions in slabs and deductions amid rising inflation.
New Delhi, January 29: As the Union Budget 2025-26 approaches, former BJP MP and financial market expert Jayant Sinha has proposed a significant revision in India’s income tax structure, advocating for tax exemption for individuals earning up to ₹10 lakh annually.
Speaking at a pre-budget discussion on Aaj Tak’s special series ‘Jayant Sinha ki Class’, Sinha emphasized that the middle class, defined as those earning up to ₹10 lakh per annum, should be exempted from paying taxes.
“Tax benefits should be extended to those with an annual income of up to ₹10 lakh. My suggestion is to raise the exemption limit to ₹10 lakh in alignment with our definition of the middle class,” said Sinha.
His remarks come amid widespread expectations of tax relief measures in the upcoming budget, especially as inflation continues to strain household finances.
Budget 2025: Key Expectations and Proposed Tax Reforms
The budget session of Parliament is scheduled to commence on January 31 and conclude on April 4, with Finance Minister Nirmala Sitharaman presenting the Union Budget on February 1.
According to government sources, key tax reforms under consideration include:
- Increase in tax slabs: The basic exemption limit of ₹3,00,000 under the new tax regime is expected to be raised to ease the burden on small taxpayers.
- Enhancing standard deduction: An increase in standard deduction is being explored to offer relief to salaried individuals.
- Additional deductions for essential expenses: Tax benefits on health insurance, life insurance premiums, and home loan interest payments may be expanded to encourage savings and investments.
Why a Tax Slab Revision is Crucial?
Experts argue that India’s current income tax structure has not kept pace with inflation and rising living costs. The present exemption limit of ₹3 lakh under the new tax regime has been criticized for being inadequate.
A higher exemption limit, as suggested by Jayant Sinha, would:
- Ease compliance burdens for small taxpayers.
- Boost disposable income, stimulating consumer spending and economic growth.
- Make the new tax regime more attractive, encouraging more taxpayers to shift away from the older structure.
A Budget Shaped by Economic Challenges
This budget comes against the backdrop of weak GDP growth and sluggish consumption patterns, making tax relief measures a crucial factor in reviving demand.
All eyes will be on the Modi government’s fiscal roadmap as it aims to balance economic growth, fiscal discipline, and middle-class aspirations in its third term. The budget’s tax proposals will play a key role in shaping India’s economic direction for the coming year.