Budget 2025: Cut income tax rates! The clamour is getting louder for a reason
Budget 2025, Finance Minister Nirmala Sitharaman faces mounting pressure to reduce income tax rates, particularly for the middle class.
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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 a 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.
The case for tax cuts
India's economy, the world's fifth-largest, grew at its slowest pace in almost two years, expanding by just 5.4 per cent in the July–September quarter. High food inflation has further strained household budgets, withholding disposable incomes and dampening spending on goods such as cars, appliances, and personal care products.
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