Finance Minister Nirmala Sitharaman today presented the first full-fledged budget of the third term of the NDA government. Presenting the budget in Lok Sabha, the finance minister announced that the Nil Tax Slab is now extended up to 12 lakh rupees income. The finance minister also said that by adding the standard deduction of 75 thousand rupees for the salaried class, the income of 12 lakh 75 thousand per annum will not be taxed.

Ms. Sitharaman also introduced new income tax slabs in the new regime of taxation. She said there would be no tax for up to 4 lakh rupees in income. 5 percent tax needs to be paid for individuals earning between 4 to 8 lakh rupees. A 10 percent tax will be paid for the 8 to 12 lakh rupee slab.

Finance Minister Nirmala Sitharaman announces a 15 percent tax for the 12 to 16 lakh rupee income group; the 16 to 20 lakh rupee income group is to pay tax at the rate of 20 percent.

A new slab of 25 percent tax is introduced for individuals earning between 20 to 24 lakh rupees; earnings above 24 lakh rupees are liable to pay 30 percent tax.

She asserted that the new structure would substantially reduce the taxes of the middle class and leave more money in their hands, boosting household consumption, savings, and investment. As a result of these proposals, the government will forgo revenue of about 1 lakh crore rupees in direct taxes and 2600 crore rupees in indirect taxes.

The limit for a tax deduction on interest for senior citizens will be doubled from 50 thousand to one lakh. Similarly, the annual limit of two lakhs and forty thousand for TDS on rent is being increased to 6 lakhs. Ms. Sitharaman said this will ensure a reduction in the number of transactions liable to TDS, benefitting small taxpayers receiving small payments.

The finance minister highlighted taxation reforms as one of the key reforms to fulfil the vision of a developed India, describing it as a means to achieve good governance for the people and economy of the country. The government this year has proposed reforms in personal income tax with a special focus on the middle class.

Presenting her 8th consecutive budget, Finance Minister Sitharaman said the budget is focused on growth acceleration, inclusive development, invigorating private sector investments, and enhancing the spending power of the middle class.