New Delhi, Feb. 4 -- The increase in the income tax exemption limit for salaried taxpayers up to Rs.12 lakh in the Union Budget 2025 has sparked expectations that this tax relief will benefit industries such as automobiles, consumer electronics, FMCG, and travel & entertainment, driven by the assumption that the middle class will direct their tax savings towards both essential and discretionary goods.

Stocks in these sectors have reacted positively to the budget, with prices trading higher since the announcement. However, Japanese brokerage firm Nomura holds a different view on the income tax cut's potential impact on the Indian automobile sector.

The brokerage, in its recent note, explains that while the change in personal income taxes...