Budget 2025 Highlights: Major Tax Relief for Middle Class, Govt Expected to Cut Interest Rates Soon

Budget 2025: Finance Minister Nirmala Sitharaman recently presented the budget, which provided major tax relief to the middle class. The government declared that annual income of up to Rs 12 lakh will be tax-free, providing significant financial relief. This action intends to increase market liquidity by raising disposable income and promoting more consumer spending. Furthermore, revisions to TDS legislation have helped older citizens by increasing the gift limit to Rs 1 lakh. Economic experts believe that another relief measure may be implemented on February 7, related to the RBI’s monetary policy. According to speculation, the central bank may lower interest rates in order to encourage economic growth and increase GDP, which is consistent with the government’s overall economic policy.

Monetary Policy Meeting on 5 Feb

If the RBI lowers interest rates, middle-class borrowers will benefit from decreased lending costs, boosting their spending power and investments. A proposed 25 basis point interest rate drop might boost economic growth by encouraging more spending and investment in fixed deposits or government schemes. The RBI’s priority is GDP growth, with an expected target of 7%, as well as improved credit flow and liquidity. The central bank plans to purchase Rs 60,000 crore in government assets to boost liquidity. These strategies collectively aim to boost the economy, assuring long-term growth through higher demand and financial stability.