Budget 2025: Will Sitharaman announce income tax reliefs for the middle-class? Modi drops a hint

A day before Finance Minister Nirmala Sitharaman will present her eighth consecutive budget on February 1, Prime Minister Narendra Modi reminisced the Maha Lakshmi mantra, expressing hope for prosperity for the poor and middle class.

Addressing the media ahead of the beginning of a new session, PM Modi said, “I bow down to Maa Lakshmi, the goddess of wealth and prosperity."

“I pray that Maa Lakshmi continues to bless the poor and middle class of our country and continues to shower her blessings," he added.

President Droupadi Murmu, during her address today later said that the government is committed to fulfilling the dream of the middle class of having their own house.

The Prime Minister’s remarks made a day before the third Modi government’s full Budget are being treated as a hint that the Budget will include something beneficial for the poor and the middle classes.

Though Sitharaman in 2024, raised the standard deduction for salaried employees and pensioners choosing the new tax regime to Rs 75,000 per year, those under the old regime continued to receive a standard deduction of Rs 50,000.

Now, taxpayers are anticipating a higher standard deduction. Recent reports have suggested that the upcoming Union Budget 2025-2026 may bring about major changes.

According to various reports, the government may increase the rebate limit under Section 87A, increase the basic exemption limit, and introduce deductions for voluntary NPS contributions and health insurance premiums. A key proposal gaining traction is making annual income up to ₹10 lakh tax-free under the new regime.

On January 31, Sitharaman presented the Economic Survey 2024-25, reviewing the economy’s performance and setting the stage for the Union Budget which is expected to focus on economic growth while maintaining fiscal prudence.