Major Tax Reliefs, Pension Reforms, and Inflation Control Empower India’s Middle Class
New Delhi, June 5 – In a strong move towards improving the lives of India’s middle-income earners, the Government has introduced a series of consistent reforms over the past 11 years. These include significant tax relief, pension security, simplified systems, and price stability—steps that aim to enhance both financial comfort and social security for the middle class.
According to an official government statement released Thursday, the efforts are part of a larger reform pattern aimed at addressing the real concerns of honest taxpayers and salaried citizens.
Income Tax Relief: More Savings for Salaried Citizens
In a major announcement during the Union Budget 2025–26, the Government raised the zero-tax income limit to ₹12 lakh per year, excluding special incomes like capital gains.
Key tax changes:
- Zero tax for individuals earning up to ₹12 lakh annually
- With a standard deduction of ₹75,000, those earning up to ₹12.75 lakh will also pay no tax
- No requirement for multiple exemption proofs, easing the filing process
This reform is expected to benefit crores of middle-class individuals and reflects the Government's decision to forgo nearly ₹1 lakh crore in revenue to provide relief.
The standard deduction simplifies tax calculation by automatically reducing taxable income, particularly easing the burden on salaried employees.
Simplified Filing: Pre-Filled Returns Boost Compliance
To reduce compliance stress, the Income Tax Department now provides pre-filled ITRs containing:
- Salary details
- Bank interest
- Dividend income
- Other relevant financial data
This ease of filing has led to a sharp rise in tax return submissions:
- FY 2013–14: 3.91 crore ITRs filed
- FY 2024–25: 9.19 crore ITRs filed
The rise suggests growing trust in the system and a simplified approach that encourages transparency and participation.
Inflation Control: From Price Pain to Stability
The statement also highlights how the cost of living has improved significantly over the past decade. From 2009–10 to 2013–14, inflation averaged 8.2%, putting pressure on family budgets.
In contrast:
- Between 2015–16 and 2024–25, average inflation dropped to 5%
- Prices of essentials like food and fuel stabilized
- Families found it easier to plan expenses and save money
This improvement is attributed to better economic policies, close coordination with the Reserve Bank of India (RBI), and smarter supply chain management.
Unified Pension Scheme (UPS): Retirement Security for Government Employees
Another major highlight from 2024 was the launch of the Unified Pension Scheme (UPS), approved by the Union Cabinet on August 24, 2024.
Key features of UPS:
- 50% of average basic pay as assured pension for government employees retiring after at least 25 years of service
- For those with 10–25 years of service, pro-rata pension applies
- Strengthens social security for lakhs of families
This move is seen as a response to long-standing demands for a stable and assured pension system for government employees.
Background: A Decade of Middle-Class-Centric Reforms
Since 2014, the Government has taken multiple steps focused on the middle class:
- Income tax rates lowered
- Paperwork reduced
- Standard deduction introduced in 2018
- New simplified tax regime launched in 2020
- Systems like filing taxes, buying homes, commuting, and accessing medicines have been simplified
These reforms were not one-off measures but part of a broader strategy to improve the ease of living for ordinary citizens.
🇮🇳 Government Stands by Middle Class
The official statement emphasized that the middle class has been recognized as a key pillar of India’s growth. The Government’s consistent efforts—even at the cost of revenue loss—reflect an approach that respects hard work, boosts confidence, and builds long-term stability.
As the country looks ahead, these reforms are likely to serve as a foundation for deeper economic empowerment and better quality of life for India’s growing middle-income population.
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