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The Middle-Class Tax Crunch: Why India Needs Middle-Class Tax Relief

Jan 15

3 min read

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Family looking stressed at table with budget papers. Text: "Tax Relief," "Union Budget 2025," "High Groceries 2025." Warm colors.

If you’re part of India’s middle class, chances are you’ve felt the pinch of high taxation. And if you’ve ever found yourself daydreaming about a lighter tax burden, you’re not alone! Experts, industry leaders, and finance influencers are all voicing the same concern: India’s high taxation policies need a serious makeover.

With the Union Budget just around the corner, it’s time to dive into the buzz around tax relief for the middle class and why experts believe it’s long overdue.



Why Everyone’s Talking About Middle-Class Tax Relief in India

Middle-Class Tax Relief in India: The middle class is often referred to as the backbone of the Indian economy, but let’s face it: the tax burden on this group is huge. While subsidies benefit the bottom 60% of the population, middle-class taxpayers are left carrying the load, all while juggling rising living costs.

Take Mohandas Pai, former Infosys CFO, for instance. He recently called for a complete tax overhaul, proposing new tax slabs that could help middle-class taxpayers breathe a little easier. Pai suggested:

  • No tax for incomes up to ₹5 lakh

  • 10% for ₹5-10 lakh

  • 20% for ₹10-20 lakh

  • 30% for incomes above ₹20 lakh

Doesn’t that sound like a dream? If you’re a taxpayer, you’re probably nodding vigorously.

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The Experts Are Speaking—Loud and Clear

When finance leaders speak, the government listens (or at least, we hope it does). CII President Sanjiv Puri has proposed tax benefits for individuals earning up to ₹20 lakh a year. His reasoning is simple: more disposable income means higher spending, which boosts consumption and fuels economic growth.

Even Akshat Shrivastava, a popular finance influencer, weighed in on the issue. He pointed out that India’s current tax strategy isn’t working, urging the government to expand the tax base while reducing rates. According to him, it’s a win-win—more people contribute, and everyone gets to keep a bigger slice of their income.

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What Could Tax Relief Look Like?

PHDCCI CEO Ranjeet Mehta has suggested a revamped tax structure that includes:

  • 30% tax for incomes above ₹50 lakh

  • 20-25% tax for incomes between ₹15 lakh and ₹50 lakh

This approach would give middle-class taxpayers some much-needed breathing room while encouraging higher-income earners to contribute their fair share.

Meanwhile, Mohandas Pai has highlighted that the current tax structure is leaving the middle class poorer and more frustrated. And he’s not wrong. With rising inflation, housing costs, and daily expenses, even small tax relief could feel like a lifeline.

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What This Means for the Future

As the budget approaches, the government faces mounting pressure to reform its taxation policies. Whether it’s adjusting tax slabs, introducing new relief measures, or expanding the tax base, one thing is clear: change is necessary.

You deserve a system that rewards your hard work, not one that makes it harder to get by. So here’s hoping this year’s budget brings some much-needed relief for middle-class taxpayers like you.

And if you need expert advice or support in managing your taxes, remember, we’re here to help. From Statutory Audits to TDS Filing, our comprehensive services ensure you’re always one step ahead.