Budget 2025: Announcements for middle class | Big tax relief, SWAMIH Fund 2 among others; check out full list

Finance Minister Nirmala Sitharaman today announced that she has exempted income of up to Rs 12 lakh from income tax and restructured tax slabs, easing the burden on the middle class.

Individuals earning up to Rs 12 lakh yearly would not be required to pay any income tax under the new tax regime, the Finance Minister said.

Tax relief for middle class individuals

For salaried employees, this nil tax limit will be Rs 12.75 lakh per annum, after taking into account a standard deduction of Rs 75,000. Higher exemptions and rejigs have been effected under the new income tax regime.

"I am now happy to announce that there will be no income tax payable up to income of Rs 12 lakh (i.E. Average income of Rs 1 lakh per month other than special rate income such as capital gains) under the new regime," the finance minister said.

According to the new tax structure, individuals earning more than Rs 12 lakh per year would pay no tax on income up to Rs 4 lakh, 5 per cent on income between Rs 4 and Rs 8 lakh, 10 per cent on income between Rs 8 and Rs 12 lakh, and 15 per cent on income between Rs 12 and Rs 16 lakh.

Income between Rs 16 and 20 lakh will be taxed at 20 per cent, Rs 20-24 lakh at 25 per cent, and Rs 24 lakh or over at 30 per cent each year.

A tax payer in the new regime with an income of Rs 12 lakh will get a benefit of Rs 80,000 in tax. A person having income of Rs 18 lakh will get a benefit of Rs 70,000 in tax. A person with an income of Rs 25 lakh gets a benefit of Rs 1.10 lakh.

UDAN - Regional connectivity scheme

"UDAN (Ude Desh ka Aam Naagrik) has enabled 1.5 crore middle-class people to meet their aspirations for speedier travel. The scheme has connected 88 airports and operationalised 619 routes. Inspired by that success, a modified UDAN scheme will be launched to enhance regional connectivity to 120 new destinations and carry 4 crore passengers in the next 10 years," said Sitharaman. 

"The scheme will also support helipads and smaller airports in hilly, aspirational, and North East region districts," she added.

SWAMIH Fund 2

"Under the special window for affordable and mid-income housing (SWAMIH) fund, fifty thousand dwelling units in stressed housing projects have been completed, and keys handed over to home-buyers. Another forty thousand units will be completed in 2025, further helping middle-class families who were paying EMIs on loans taken for apartments, while also paying rent for their current dwellings," said Finance Minister on Satudary in her budget speech.

Building on this success, SWAMIH Fund 2 will be established as a blended finance facility with contribution from the Government, banks and private investors. This fund of Rs 15,000 crore will aim for expeditious completion of another 1 lakh units.