The Indian government’s recent decision to increase income tax has sparked a heated debate among citizens and experts alike. According to sources, the government has proposed a new tax regime, which will see a significant hike in income tax rates for individuals earning above ₹10 lakhs per annum. This move is expected to generate an additional ₹50,000 crores for the government, but critics argue that it will further burden the middle class.
The new tax regime, set to come into effect from 01.04.2026, will see a uniform tax rate of 20% for individuals earning above ₹15 lakhs per annum. Those earning between ₹10 lakhs to ₹15 lakhs will be taxed at a rate of 15%, while those earning below ₹10 lakhs will continue to enjoy a lower tax rate of 5%. This move has been met with opposition from various quarters, with many arguing that it will lead to a decrease in disposable income for the middle class.
Experts argue that the government’s decision to hike income tax is a necessary step to meet the fiscal deficit and fund its ambitious infrastructure development projects. However, critics argue that the hike will have a disproportionate impact on the middle class, who are already struggling to make ends meet. As the debate continues, it remains to be seen how the government’s decision will play out in the coming months.