India, Feb. 1 -- In a major announcement during the Union Budget 2025, Finance Minister Nirmala Sitharaman declared that individuals earning up to Rs.12 lakh annually would not have to pay income tax. She called it a step towards supporting the middle class. With the inclusion of the standard deduction of Rs.75,000, this means that incomes up to Rs.12.75 lakh will effectively have no tax liability. "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.

The decision comes as an effort to boost spending and increase consumption in the economy. Sitharaman...