Big tax relief to boost disposable income, stimulate consumption: Experts
Tax experts, industry observers, and banking leaders have lauded the Union Budget 2025-26 for its focus on economic growth, tax relief, and innovation across sectors.
ANI
Feb 02, 2025 06:02 IST
New Delhi [India], February 2 (ANI): Tax experts, industry observers, and banking leaders have lauded the Union Budget 2025-26 for its focus on economic growth, tax relief, and innovation across sectors.
Announced by Finance Minister Nirmala Sitharaman on Saturday, the budget includes tax rebates, such as a complete income tax exemption for individuals earning up to Rs 12 lakh annually.
For salaried taxpayers, this threshold increases to Rs 12.75 lakh, factoring in a Rs 75,000 standard deduction.
Sameer Gupta, National Tax Leader, EY India, commended the budget's focus on economic progress. "The enhanced tax rebates will ensure more disposable income, stimulating consumption and fueling economic activity," he said.
Gupta also emphasized that the push for innovation, especially in sectors like agriculture and skill development, would drive sustainable, technology-driven progress.
Debadatta Chand, Managing Director and CEO of Bank of Baroda noted the impact on consumer spending. "The concessions on the income tax front will put more money in the hands of taxpayers and would boost consumption in the economy," he said.
Tribhuwan Adhikari, MD and CEO of LIC Housing Finance praised the budget's approach to strengthening economic growth and increasing disposable income for individuals, especially middle-class salaried professionals.
"The exemption of income tax for earnings up to INR 12 lakh will significantly impact affordable housing demand, making it easier for individuals to plan homeownership," he said.
Preeti Sharma, Partner at BDO India, noted the significant changes announced for individual taxpayers. The new tax regime increases the rebate for those earning up to Rs 12 lakh, effectively exempting them from paying taxes.
Sharma explained that a salaried individual with an income of Rs 12.75 lakh will benefit from a tax-saving of Rs 80,000 due to the increased rebate and standard deductions.
The revised tax slabs, with the new tax threshold raised to Rs 4 lakh, provide relief to taxpayers across all income classes.
"The changes will encourage higher tax compliance and ensure a more equitable tax burden distribution," she said.
Sharma further indicated that the government's strategy to simplify tax rules and focus on a single tax regime for individuals points towards streamlining taxation procedures.
"While the fine print of the New Income-Tax Bill is yet to be revealed, it reflects the government's intent to align with the new tax regime," she added.
Amit Nigam, Executive Director and COO of BANKIT emphasised that the revised income tax rates will boost disposable income, which will in turn drive consumption and economic activity.
He explained that this would open up new opportunities for small businesses and digital financial services.
"The budget's focus on fueling economic resilience, especially in urban areas, is a positive step towards creating a robust and inclusive economic environment," Nigam noted.
Naveen Wadhwa, Vice President, Taxmann, "The gap between the tax payable under the new and old tax regimes is so vast that it effectively ends the old tax regime. The new tax regime is the most advantageous option for every taxpayer." (ANI)
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