Budget 2025: Cut income tax rates! The clamour is getting Louder for a Reason

Budget 2025 expectations: Finance Minister Nirmala Sitharaman is under pressure to reduce income tax rates for individuals earning up to Rs 15 lakh annually. This move aims to boost consumption and revive demand. Reducing tax rates could provide relief to the middle class affected by inflation. The government aims to balance fiscal prudence with economic growth in Budget 2025.

Union Budget 2025: As India braces for Budget 2025, Finance Minister Nirmala Sitharaman faces mounting pressure to reduce income tax rates, particularly for the middle class.

India’s middle class, or in this case the 'aam aadmi', has been vocal about the high tax burden, especially as wage growth struggles to keep pace with inflation. Weak consumption has emerged as a key concern, with rural and urban demand both faltering.

High inflation has eroded purchasing power, reducing consumer confidence. The RBI and economists alike caution that sustained inflation, if left unchecked, could undermine India's economic growth.

In what may be good news for many, the government is considering to reduce income tax rates for individuals earning upto Rs 15 lakh per annum, a Reuters report has said. According to two government sources, this potential move—expected to be a part of the Budget due in February—could benefit millions of taxpayers, especially urban residents.