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Experts Laud Tax relief To Boost Disposable Income And Focus On Economic Growth

Experts laud tax relief to boost disposable income and focus on economic growth
The finance minister introduced an income tax exemption for individuals earning up to Rs.12 lakh annually
Lauding the Union Budget 2025-26, tax experts, industry observers, and banking leaders have stated that the tax relief was focused on economic growth and innovation across sectors.
Finance Minister Nirmala Sitharaman apprised the Parliament about tax rebates, including a complete income tax exemption for individuals earning up to Rs.12 lakh annually. The threshold for salaried taxpayers was increased to Rs.12.75 lakh, factoring in a Rs.75,000 standard deduction.
Sameer Gupta, the 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 emphasized that the push for innovation, especially in agriculture and skill development, would drive sustainable, technology-driven progress. Similarly, Debadatta Chand, Managing Director and CEO of the Bank of Baroda noted, "The concessions on income tax will put more money in the hands of the taxpayers and boost consumption in the economy.”
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 the middle- class salaried professionals. He stated, “The exemption of income tax for earnings up to Rs.12 lakh will significantly impact affordable housing demand, making it easier for individuals to plan homeownership.” Preeti Sharma, a partner at BDO India noted that a salaried individual with Rs.12.75 lakh income, will gain Rs.80,000 from tax- saving due to the increased rebate and standard deductions.
She expressed, “The revised tax slabs, with the new tax threshold raised to Rs.4 lakh, provided relief to taxpayers across all income classes. The changes would encourage higher tax compliance and ensure a more equitable tax burden distribution.” Sharma indicated that the government's strategy to simplify tax rules and focus on a single tax regime pointed 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.”
Amit Nigam, the Executive Director and COO of Bankit emphasised that the revised income tax rates would boost disposable income and open 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 added.
Naveen Wadhwa, Vice President, Taxmann commented, "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."