Relief for the middle class, Income Tax and GST led to more savings this year

Income Tax New Rules: The year 2025 has been a great one for the common man. This year, the central government has taken significant decisions to ease the burden on the common man. These decisions include income tax cuts, GST reforms, and annual toll passes. Additionally, the central government has increased the income tax limit under the new regime from Rs. 7 lakh to Rs. 12 lakh. When combined with the Rs. 75,000 exemption under the standard deduction, the amount increases to Rs. 12.75 lakh.

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No tax on income up to Rs. 12.75 lakh

A salaried individual can claim an income tax exemption on income up to Rs. 12.75 lakh. Only the salaried class can avail the standard deduction exemption. The biggest relief provided by the government this year is GST 2.0. Under this, the government has reduced the four GST slabs of 5%, 12%, 18%, and 28% to two slabs of 5% and 18%. The GST rate on luxury and sun goods has been fixed at 40%.

Changes in GST rates on so many items

It should be noted that after the implementation of the new GST rate, the GST rates on 453 items have been changed, of which 413 items have seen a reduction in rates. The GST rate on approximately 295 essential items has been reduced from 12% to 5% and even to zero. The GST rate on petrol cars of 1200cc or less and diesel cars of 1500cc or less has been reduced from 28% to 18%. Additionally, the GST rate on bikes of 350cc or less has been reduced from 28% to 18%.

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40% GST on luxury cars

A 40% GST has been imposed on luxury cars and bikes. Furthermore, vehicle cess has been abolished. All these reforms were aimed at increasing the country’s economic growth. The country’s growth rate in the second quarter of the financial year 2025-2026 was 8.2%. This is the fastest growth rate in several previous quarters. To reduce the burden of toll taxes on the general public in 2025, the government has also announced an annual pass, which was implemented on August 15th.