Finance Minister Nirmala Sitharaman reveals the behind-the-scenes deliberations that led to the landmark tax exemption up to ₹12 lakh announced in Budget 2025.
February 2, 2025: Finance Minister Nirmala Sitharaman revealed on Sunday that Prime Minister Narendra Modi was a strong proponent of the tax cuts announced in the Union Budget 2025-26. However, the process required significant effort to convince bureaucrats and ensure the policy’s feasibility, PTI reported.
Also Read: Budget 2025: Understanding ₹12 Lakh Tax Exemption and New Slab Benefits
In her budget speech on Saturday, Sitharaman announced a groundbreaking change: individuals earning up to ₹12 lakh annually will not have to pay any income tax under the new regime. This move, aimed at providing relief to the middle class, was celebrated widely, with the treasury benches—led by PM Modi—applauding the announcement in Parliament.
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PM Modi’s Commitment to Reform
Speaking in an interview, Sitharaman said, “The Prime Minister was very clear that he wanted to do something impactful for taxpayers. The challenge lay in convincing the ministry and the board about the efficiency of tax collection and ensuring that honest taxpayers’ concerns were addressed.”
EXCLUSIVE | VIDEO: On the decision of major tax reforms in Union Budget 2025-26, Union Finance Minister Nirmala Sitharaman (@nsitharaman) says: "Just as PM Modi and his government have always heard the voice of people from different sectors, industry leaders… he (PM) meets… pic.twitter.com/9Yac7tQPmo
— Press Trust of India (@PTI_News) February 2, 2025
She highlighted PM Modi’s ability to listen to people from diverse sectors, ensuring that the government is attuned to the needs of all citizens. “He meets and interacts with people from every section of society, from business leaders to the most vulnerable communities. This inclusivity defines his leadership,” Sitharaman added.
Key Tax Relief Announced
In her Budget speech, Sitharaman explained, “To taxpayers up to ₹12 lakh of normal income (excluding special rate income like capital gains), a tax rebate is being provided along with slab rate reductions, ensuring no tax liability.” The announcement is expected to boost disposable income, savings, and consumption, providing a significant push to economic growth.
PM Modi Hails the Budget
Prime Minister Narendra Modi praised the 2025 Budget, calling it a “force multiplier” for the aspirations of 1.4 billion Indians. “This Budget focuses on empowering citizens by increasing their savings and enabling them to contribute to the country’s development,” he said in a video address.
Highlighting the contrast from traditional budgets, PM Modi remarked, “Usually, budgets focus on filling the government treasury. This Budget, however, prioritizes how citizens’ pockets can be filled, savings increased, and their role in national development amplified.”
The Budget 2025, which also introduced various initiatives for MSMEs, rural development, and infrastructure, is seen as a pivotal step towards inclusive growth and economic transformation.
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Budget 2025, Nirmala Sitharaman, PM Modi, Tax Exemption, ₹12 Lakh Income Tax Relief, Middle-Class Benefits, Economic Reforms, India Budget Highlights, Modi Government, Tax Policy