Modi Govt Talks Middle Class in Union Budget Amid Delhi Polls

FM Nirmala Sitharaman in Lok Sabha Image credit Sansad TV
Nirmala Sitharaman Proposes Tax Sops to Appease Middle Class
By Manish Anand
New Delhi, February 1: Finally, Union Minister for Finance Nirmala Sithraman gave centre stage to the middle class in her Budget speech in the Lok Sabha on Saturday. The people in Delhi, a city of middle class, will vote on February 5, in another four days.
Sitharaman while proposing tax rate rejig to boost income of the middle class claimed that there will be no tax for income up to ₹12 lakh. “There will be no tax for income up to ₹12.75 lakh for salaried class, by including ₹75,000 deductions,” said Sitharaman.
Afterwards, she explained that the ‘zero tax’ calculation is based on slab structures and various deductions and exemptions. Economic experts are interpreting Sitharaman’s claim of “zero tax” for income up to ₹12 lakh is “intentional and not actual”.
The stock market appeared unimpressed with Union Budget 2025. Indices were trading lower half an hour after Sitharaman concluded her Budget speech.
The finance minister packaged her ‘please the middle class’ plank by also tinkering with TDS and TCS structures. She proposed raising limit for TDS on interest for senior citizens from ₹50,000 to ₹1 lakh.
Sitharaman also proposed in the Budget that annual limit for TDS on rent will be raised from ₹2.40 lakh to ₹6 lakh. The five per cent tax will now be applicable for income tax slab of ₹4-8 lakh annual income.
The finance minister with proposal for rejig in custom duty sought to make mobile phone and other electronic items cheaper. She also brought a host of medicines under the custom duty exemption category. The minister also proposed boosting measures for treatment of cancer.
To further appeal to the aspirational middle class, Sitharaman proposed expansion of capacity in five Indian Institutes of Technology (IITs). She gave a few sops to the start ups.
Sitharaman made several references to the middle class. She claimed that the Budget proposal will boost the households’ savings.
The minister hoped that the middle class will spend more with additional savings. Experts in the run up to the unveiling of the Union Budget had warned that the household savings are at record low.
The Economic Survey 2024-25 also noted that while corporate profit soared in recent years, there had been stagnation in wage growth. With a small basket of measures, Sitharaman sought to appease the middle class, which is turning restive amid income and job losses across the country.
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