India unveils tax cuts to boost slowing economy

NEW DELHI: India’s finance minister unveiled broad income tax cuts on Saturday as Prime Minister Narendra Modi’s government looks to bolster consumption and perk up a slowing economy.

“The new structure will substantially reduce the taxes of the middle class and leave more money in their hands, boosting household consumption, savings and investment,” finance minister Nirmala Sitharaman told parliament while unveiling the year’s budget.

She said that individuals earning an annual income of up to INR1.2m would now be effectively exempt from paying income tax. The previous threshold was INR700,000. Cuts were also announced for a newer system introduced in 2020, with annual incomes of INR1.6m to INR2.4m now attracting a tax rate of between 20pc and 25pc, down from the earlier rate of 30pc.

Published in Dawn, February 2nd, 2025