Rathin Roy, Distinguished Professor at the Kautilya School of Public Policy, believes the tax changes announced by Finance Minister Nirmala Sitharaman in Budget 2025 will primarily benefit the wealthy while offering little to the common people.According to Roy, everyone who pays income tax in India belongs to the wealthiest segment of the population, making it misleading to call them “middle class.”He explained that the government’s decision to lower the tax burden comes at a cost of ₹1 lakh crore to the national treasury. However, this change has made the tax system more regressive, and it now favours the rich more than before.
Previously, a person had to earn 3.5 times the national per capita income to start paying income tax. Now, they need to earn six times the per capita income. This means that only the top 5-10% of the population is liable to pay income tax, further reducing the tax burden on the wealthy.Also Read | Budget 2025: Major income tax cuts announced, experts welcome moveAt the same time, indirect taxes such as goods and services tax (GST remain high. Since both rich and poor pay these taxes equally, the proportion of taxes paid by lower-income groups has increased.Also Read | Budget 2025: JPMorgan’s Sajjid Chinoy calls it cautious & in line with expectations“It will increase consumption of you and me. It is going to do nothing, absolutely nothing for consumption of the aam aadmi,” said Roy.Catch live updates on FM Sitharaman’s Budget 2025 speech hereClick here for the latest stock market updates
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