Speculations are rife that significant revisions in income tax rates may be announced in the Union Budget scheduled for February 1. According to national media reports, the government is considering reducing income tax rates for various slabs, particularly for individuals earning between ₹3 lakh and ₹15 lakh annually. Such a move is expected to benefit millions of taxpayers.
The central government is reportedly examining this proposal in response to declining consumption levels, particularly in urban areas. The tax cuts are aimed at increasing disposable income, encouraging people to spend more, and thereby boosting the economy.
Currently, individuals earning between ₹3 lakh and ₹15 lakh annually fall under the 5% to 20% tax brackets, while those earning above ₹15 lakh are taxed at 30%. The exact percentage of reduction in tax rates remains unclear, with the final decision expected just before the Budget presentation. Neither the central government nor the Finance Ministry has released any official statements regarding the changes.
Reports also indicate that the tax relief might be targeted at those adopting the new tax regime. Under this regime, individuals earning between ₹3 lakh and ₹7 lakh could benefit the most, with significant reductions in their tax rates. In the previous budget, Finance Minister Nirmala Sitharaman had announced certain relaxations in income tax slabs under the new tax system for the 2024–25 fiscal year.
