Finance Minister Nirmala Sitharaman on Tuesday said the Finance Bill 2025 provides unprecedented tax relief, and the 13.14 per cent projected growth in personal income tax collection is "realistic" and supported by solid data.
Replying to the discussions on Finance Bill 2025 in the Lok Sabha, Sitharaman also said the customs duty rationalisation announced in the Budget will support manufacturing units, domestic value addition, promote exports, facilitate trade and also provide relief to the common people.
In the 2025-26 Budget, the government has hiked income tax rebate to Rs 12 lakh per annum from Rs 7 lakh earlier. For the salaried class, this rebate will be Rs 12.75 lakh per year after taking into account the standard deduction. The hike in I-T rebate will lead to tax foregone to the tune of Rs 1 lakh crore in FY26.
Sitharaman said the Budget also provides "marginal relief" under the Income Tax law for those taxpayers whose income exceeds Rs 12 lakh per annum by a small margin.
"The Finance Bill provides unprecedented tax relief to honour taxpayer... We have recognised the contribution of the middle class," she said.
Collections in personal income tax have shown considerable buoyancy in the last few years and they have been increasing around 20 per cent year-on-year, the minister added.
"For the year 2025-26, the personal income tax collection is projected at Rs 13.6 lakh crore. The Revised Estimates for 2024-25 is Rs 12.2 lakh crore. So, Rs 12.2 lakh crore is going to be Rs 13.6 lakh and this is done with a certain realistic calculation," Sitharaman said.
The personal I-T revenue is projected to grow by 13.14 per cent in FY26, after taking into account a 7 per cent dip after factoring in the Rs 1 lakh crore revenue foregone.
"So, the projected collections for income tax for 2025-26 are based on solid data," Sitharaman added.
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