The Indian middle class has welcomed the new tax regime announced in the Union Budget 2025-26. However, prominent influencers like YouTuber Nalini Unagar and Shaadi.com founder Anupam Mittal have raised concerns over the perceived inequalities in the tax structure.
Nalini Unagar Highlights Salary vs. Business Tax Disparity
YouTuber Nalini Unagar took to social media to criticize the differences in tax treatment between salaried individuals and business owners. She pointed out that a person earning Rs 30 lakh through salary would pay approximately Rs 8 lakh in taxes, while a business owner with the same income would owe only Rs 1.5 lakh.
Expressing her frustration, Unagar tweeted, “If you earn 30 lakhs from salary, you pay 8 lakh tax. If you earn 30 lakhs from business, you pay 1.5 lakh tax. WOWOWOW.” Her post resonated with many, fueling discussions on the fairness of the new tax regime.
Anupam Mittal Calls India ‘Income Tax-Free’
Shark Tank India investor and Shaadi.com founder Anupam Mittal also raised concerns, claiming that only 1 crore people out of India’s 140 crore population would pay taxes in the financial year 2025-26. He described this as effectively making India “income tax-free.”
Mittal explained that nearly 90% of tax filers in India earn less than Rs 13 lakh per annum, meaning only a small fraction contribute to the national tax pool. He tweeted, “Turns out that almost 90% tax-filers in India have an income below 13 lacs p.a. meaning out of 140 cr people only 1 cr will pay income tax this year effectively making India income-tax free.” His remarks sparked debates about the sustainability of the tax system.
New Tax Regime
Finance Minister Nirmala Sitharaman introduced major changes to India’s tax slabs, announcing that individuals earning up to Rs 12 lakh would pay no tax. However, this was widely misinterpreted. While there is a tax rebate, income up to Rs 12 lakh is not exempt from tax but becomes tax-free after applying deductions and rebates.
For instance, tax liability for someone earning Rs 12 lakh per year is calculated as follows:
- Rs 0 – Rs 4 lakh: 0% tax
- Rs 4 – Rs 8 lakh: 5% tax = Rs 20,000
- Rs 8 – Rs 12 lakh: 10% tax = Rs 40,000
- Total tax liability: Rs 60,000
However, the enhanced rebate under Section 87A, raised to Rs 60,000, eliminates the tax burden for individuals earning up to Rs 12.75 lakh. Additionally, the standard deduction of Rs 75,000 further reduces taxable income.
Tax-Free vs. Tax-Exempt: Understanding the Difference
It is crucial to differentiate between tax-free and tax-exempt income.
- Tax-exempt income is never taxed.
- Tax-free income is taxed initially but nullified through deductions and rebates.
Thus, while the government has structured the new tax regime to provide relief, influencers argue that it still favors business owners over salaried professionals.
The new tax regime has ignited discussions about fairness and economic growth. While the middle class benefits from reduced tax burdens, concerns about limited taxpayer participation and disparities between salaried and business incomes remain. The government’s challenge now is to address these concerns while ensuring a sustainable and equitable tax system for all.