Before the Delhi Assembly elections, the central government has given a big gift to the middle class. Finance Minister Nirmala Sitharaman, while presenting her 8th budget on Saturday, announced significant relief for taxpayers.

Before the Delhi Assembly elections, the central government has given a major gift to the middle class. Finance Minister Nirmala Sitharaman presented her 8th budget on Saturday, announcing significant relief for taxpayers. The finance minister stated that income up to ₹12 lakh will be tax-free. This is ₹2 lakh more than the demand made by Delhi’s former Chief Minister Arvind Kejriwal. However, Kejriwal expressed disappointment over some of his other demands not being fulfilled.

Arvind Kejriwal, 9 days ago, released a ‘manifesto’ for the middle class, presenting 7 demands to the central government. The Aam Aadmi Party leader, while urging that this budget be dedicated to the middle class, made several key demands, the most important of which was a reduction in income tax. Kejriwal stated, “The income tax exemption limit should be increased from 7 lakh to at least 10 lakh.”

In this budget, just five days before the elections in Delhi, the Modi government has made an attempt to please the middle class. A large section of the middle class in Delhi has long been hoping for tax exemptions. Addressing this demand, Arvind Kejriwal had requested that incomes up to at least ₹10 lakh be made tax-free. However, the Modi government has gone beyond this and made an announcement.

Read also: Middle Class cheers, those earning up to ₹12 lakh to get ₹80,000 benefit.

Why is Kejriwal upset now? In his first response to the budget, Arvind Kejriwal did not comment on the increased tax exemption limit. Instead, he expressed disappointment over some of his other unmet demands. Kejriwal wrote on X (formerly Twitter), “A large portion of the nation’s treasury goes towards waiving the loans of a few wealthy billionaires. I had demanded that the budget include an announcement stating that from now on, no billionaire’s loans will be waived. The money saved from this could be used to provide exemptions on middle-class home and vehicle loans, and to waive farmers’ loans. Income tax and GST rates should be halved. I am disappointed that this was not done.”

What did the Finance Minister announce? Finance Minister Nirmala Sitharaman announced that annual incomes up to ₹12 lakh would be completely tax-free under the new income tax regime. With a standard deduction of ₹75,000, salaried individuals will now not have to pay any tax on annual incomes up to ₹12.75 lakh.

The Finance Minister has also proposed changes to the tax slabs. Under this proposal, there will be no tax on an annual income of up to 4 lakh rupees. For income between 4 lakh to 8 lakh rupees, a 5% tax will be levied; for income between 8 lakh to 12 lakh rupees, a 10% tax; for income between 12 lakh to 16 lakh rupees, a 15% tax; for income between 16 lakh to 20 lakh rupees, a 20% tax; for income between 20 lakh to 24 lakh rupees, a 25% tax; and for income above 24 lakh rupees, a 30% tax will apply.