New Delhi: Finance Minister Nirmala Sitharaman on Saturday announced significant income tax cuts for the middle class and unveiled a blueprint for next generation reforms as she looked to shore up a slowing economy amid global uncertainties.

Individuals earning up to Rs 12.75 lakh in a year will not have to pay any taxes after she raised the exemption threshold from Rs 7 lakh. She also altered tax slabs for people earning above this threshold to help save up to Rs 1.1 lakh in taxes for those with income up to Rs 25 lakh in a year.

The tax cuts, which will cost the exchequer about Rs 1 lakh crore, will benefit 6.3 crore people, or more than 80 per cent of taxpayers, who earn up to Rs 12 lakh a year. "The new structure will substantially reduce taxes on the middle class and leave more money in their hands, boosting household consumption, savings and investment," Sitharaman said presenting what was dubbed as 'reformist' budget for the next fiscal in Lok Sabha. The Budget for April 2025 to March 2026 fiscal (FY26) proposed to raise foreign investment limit in insurance sector to 100 per cent from current 74 per cent and continued spending spree on infrastructure while raising allocations for social sectors as well as providing for measures for poor, youth, farmers and women. All this she did while managing to stick to the fiscal consolidation roadmap, projecting a fiscal deficit of 4.4 per cent of the GDP in FY26 as against an estimated 4.8 per cent in the current year ending March 31.

Rs 2-cr term loan for 5 lakh first-time women, SC, ST entrepreneurs: FM

The government will launch a Rs 2-crore term loan for 5 lakh first-time women, SC and ST entrepreneurs, Finance Minister Nirmala Sitharaman said on Saturday. Presenting the Union Budget for 2025-26, the finance minister also said a manufacturing mission will be set up for SME and large industries. Besides, the government will undertake facilitation measures to enhance productivity of labour-intensive sectors, Sitharaman said. The credit guarantee cover will be doubled to Rs 20 crore, guarantee fee moderated to 1 per cent, she added. She also said a national institute of food technology, entrepreneurship and management will be established in Bihar.