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The RBI is expected to cut the repo rate and the government’s income tax relaxation is expected to promote development on Indian families and to carry forward consumption in the economy to reduce financial pressure.
Middle class Bonanza.
India’s middle class has got two good news back – first, massively Income tax exemption 2025-26 in the Union Budget, and now, RBI rate cut For cheap loans and easy EMIs. This step will carry forward consumption in the economy to promote development and reduce financial pressure on Indian homes.
The Monetary Policy Committee of the Reserve Bank of India (RBI) on Friday reduced major interest rates by 25 basis points, thus the EMI burden made it easier for borrowers and loans to be cheaper.
After the latest cuts, the repo rate (interest rate at which RBI gives loans to banks) is below 6.25 percent before 6.25 percent.
Low EMI, high consumption
As the RBI has announced the repo rate cut, the cost of the loan is going to decrease for the borrowers and their EMI will be reduced. Banks will pass the rate deduction to existing borrowers who have taken loans or have changed the loan under the repo rate-linked floating interest rate system.
Kaki Mistry, president of HDFC Life Insurance, said, “Most loans have already been converted into repo rate regime.”
Saying that RBI’s move will promote economic development, Indian bank MD & CEO Binod Kumar said that RBI is encouraging MPC to focus on liquidity, reflects the concerns of both government and RBI.
“Given the government’s budgetary initiative and the expected increase in domestic expenses, we estimate optimistic GDP growth,” Kumar said.
Grain Puri, President of Anarock Group, said that RBI’s decision to reduce repo rates by 25 BPS Piggiback on taxation benefits declared in the Union Budget.
“In this way, this is undeniably a big boost for homebuilders, especially for affordable housing buyers. Pari said that many for the first time homebuits who were hesitant to take a dip, they would now have to step. Are because home loan rates will be reduced-as far as bank buyers get major benefits, “said Puri.
Budget 2025: 1-million rupees boost for middle class
On 1 February, the Union Budget 2025–26 re-formulated the new tax regime (NTR) to provide relief to the middle class of Rs 1 lakh crore while maintaining the status quo on the old tax regime (OTR).
The budget freed income tax on annual income to Rs 12 lakh (before Rs 7 lakh), which benefited more than one crore taxpayers in the country and from April 1, 2025, the tax burden from others decreased with impact. This is done by hiking. Slab exemption and revived.
New income tax bill
After these, the government is also planning to bring the new income tax bill to simplify the provisions of better clarity. According to reports, the bill is likely to have a provision that will allow the government to provide income tax relief without budget through an executive order.
