NEW DELHI: The government could ‘realistically’ achieve personal income tax collection targets despite offering huge tax relief, Finance Minister Nirmala Sitharaman said on Tuesday while responding to the debate on Budget in the Lok Sabha. The House passed the Finance Bill 2025—the piece of legislation that gives legal backing to the tax proposals and other fiscal measures announced in the Budget—with 35 amendments.
“The Finance Bill provides unprecedented tax relief to honour taxpayers. We have recognised their contribution,” Sitharaman said.
In the FY26 Budget, the government increased the threshold for income tax rebate to Rs 12 lakh from Rs 7 lakh earlier. For salaried taxpayers, this threshold jumped to Rs 12.75 lakh per year after taking into account Rs 75,000 standard deduction. The government also tweaked the tax slabs to benefit a large section of taxpayers.
The changes would lead to loss of tax revenue of Rs 1 lakh crore. However, the government has increased the personal income tax collection target for FY26 by 14.14%. “The projected tax collections for FY26 are based on solid data,” Sitharaman said.
With the passage of the Finance Bill 2025, the Lok Sabha completed its part of the Budgetary approval process. The Budget process for FY26 will be complete after the Rajya Sabha also approves it.