Finance Minister Nirmala Sitharaman said that the government can ‘realistically’ achieve personal income tax collection targets even after proposing a huge tax relief while responding to the debate on the budget in the Lok Sabha.
The House passed the Finance Bill 2025, the piece of legislation that furnishes 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 cited.
The government in the FY26 Budget increased the limit for the income tax rebate to Rs 12 lakh from Rs 7 lakh previously. The same limit for salaried taxpayers has increased to Rs 12.75 lakh per year, after considering Rs 75,000 standard deduction. Also, the government tweaked the tax slabs to benefit a large section of taxpayers.
A tax revenue loss of Rs 1 lakh crore shall arise from the changes. 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 stated.
The Lok Sabha completed its part of the Budgetary approval process with the passage of the Finance Bill 2025. For FY26, the budget process will be complete after the Rajya Sabha also approves it.
