The Union Budget 2025-26 had shaken things up with major income tax cuts designed to boost disposable income and ignite consumer spending. Under the revamped tax slabs, you now pay zero tax on incomes up to 4 lakh rupees, 5% on 4–8 lakh, 10% on 8–12 lakh, 15% on 12–16 lakh, 20% on 16–20 lakh, 25% on 20–24 lakh, and the top rate of 30% kicks in only beyond 24 lakh rupees.
Let’s break it down with a real-world example. Consider Disha, a 30-lakh earner. Under the old regime, her tax bill would have been around 6,25,000 rupees. With the new system, her liability drops to approximately 4,75,000 rupees—a clear saving of 1,50,000 rupees.
On the other hand there is Rohan, who earns 12 lakh rupees per year. His computed tax would be 5% on the 4 lakh (20,000 rupees) plus 10% on the next 4 lakh (40,000 rupees), totaling 60,000. However, with tax rebates available at year-end, Rohan effectively pays zero tax.
Why does this matter? With more disposable income, consumers are likely to upgrade everyday items—opting for premium home essentials, better personal care products, and even investing in advanced tech gadgets. This increased purchasing power sets the stage for a surge in market demand, opening exciting new opportunities across various sectors. For founders, the major takeaway is that lower taxes not only lighten the individual tax burden but also catalyze economic growth by driving consumer preference toward quality and innovation.