New Delhi, Mar 26: Finance Minister Nirmala Sitharaman said on Tuesday the Finance Bill 2025 provides unprecedented tax relief and that the projected 13.14% growth in personal income tax collection is “realistic” and supported by solid data.
Speaking in the Lok Sabha during discussions on the Finance Bill 2025, Sitharaman said customs duty rationalisation announced in the Budget will support manufacturing, domestic value addition, promote exports, facilitate trade, and provide relief to common people.
The government has increased the income tax rebate to ₹12 lakh per annum from ₹7 lakh. For salaried individuals, the rebate will be ₹12.75 lakh per year after considering the standard deduction. The hike in the income tax rebate will result in tax foregone of ₹1 lakh crore in FY26, Sitharaman said.
“The Finance Bill provides unprecedented tax relief to honour taxpayers… We have recognised the contribution of the middle class,” she said.
She also stated the Budget provides “marginal relief” for taxpayers whose income exceeds ₹12 lakh by a small margin.
Sitharaman said personal income tax collection is projected at ₹13.6 lakh crore for 2025-26, up from the revised estimate of ₹12.2 lakh crore in 2024-25. “The projected collections for income tax for 2025-26 are based on solid data,” she said.
The 6% Equalisation Levy on online advertisements has been abolished to address “uncertainty in international economic conditions,” Sitharaman said.
The Budget proposes to reduce duties on raw materials and inputs to enhance export competitiveness and lower the cost of domestic production. It also aims to remove seven customs tariff rates for industrial goods, reducing the total number of tariff rates from 21 to 8, including zero-rated goods.
“Many Indian exports will become more competitive as the cost of imported inputs reduces,” she said.
The tax department conducted a ‘nudge’ campaign asking taxpayers to voluntarily disclose their foreign income and assets. As a result, 30,161 taxpayers declared foreign assets worth ₹29,208 crore and foreign income of ₹1,089 crore in Schedule FA, Sitharaman said.
The Finance Minister said the Modi government has restored the pension calculation method to the March 2008 position based on the Sixth Central Pay Commission recommendation. She said the delay was due to ongoing court cases. “By this amendment, the government is actually restoring that which was accepted in March 2008,” she said.
