Finance Minister Nirmala Sitharaman did not mince words while addressing middle class taxpayers. Acknowledging their struggles, she outlined the tax changes made in the last Budget aimed at putting more money in their pockets without breaking the government's bank.

"I respect the issue of giving relief to the middle class. I want to do more, but there are limits in taxation. To bring about a change for salaried people, the standard deduction has been increased from ₹50,000 to ₹75,000," Sitharaman said in an interview to Times Now.

This adjustment along with revised tax rates is aimed at benefiting not just middle-income earners but also higher-income groups by providing incremental relief across different tax brackets, she added.

The government is reportedly exploring the possibility of a sweeping income tax cut for individuals earning up to ₹15 lakh annually, which would potentially impact millions of urban taxpayers grappling with high living costs. The move is in line with the broader goal of stimulating consumption amid an economic slowdown, reports Reuters.

Under the 2020 tax regime, income between ₹3 lakh and ₹15 lakh is taxed at rates ranging from 5% to 20%, while higher incomes are taxed at 30%.

The proposed changes, if implemented, will provide relief to taxpayers who opt for this system, which does not include exemptions such as housing rentals.

Apart from tax reforms, Sitharaman outlined initiatives targeting education and affordable housing in the interview. "Concessional interest for student loans up to ₹10 lakh and benefits for affordable housing are important steps to support families," he said, emphasising the government's commitment to overall financial relief.

The context of these measures is clear. India's economic growth between July and September was the slowest in seven quarters, including food inflation, which has dampened demand for consumer goods and vehicles. The number of taxpayers with incomes between Rs 50 lakh and Rs 1 crore has grown by 440% over the past decade, reflecting growing financial pressures on the middle and higher income groups. With the upcoming budget, the government's focus is clear: address taxpayer concerns, boost consumption and address economic challenges with targeted measures.