President Droupadi Murmu on Wednesday said the Union government is firmly moving on the path of "Reforms Express", delivering tangible benefits to the poor and middle class through next-generation tax reforms, including GST 2.0 and a revamped Income Tax regime.
Addressing both Houses of Parliament, the President highlighted that the historic GST 2.0 reform, rolled out in September 2025, has resulted in savings of nearly Rs 1 lakh crore for citizens, while also boosting consumption and economic momentum.
Income Up to Rs 12 Lakh Exempt Under New Tax Regime
President Murmu said the government has taken a historic decision to exempt income up to Rs 12 lakh from income tax, providing unprecedented relief to middle-class families. She added that the new and simplified Income Tax Act, 2025, has already been enacted and will come into force from April 1, 2026.
The enhanced exemption limit was announced in the Union Budget 2025-26, presented on February 1 last year, raising the threshold from Rs 7 lakh to Rs 12 lakh under the revised tax framework.
"These reforms are providing unprecedented benefits to poor and middle-class families and have given a new impetus to the country’s economy," Murmu said.
GST 2.0: Two-Tier Structure Simplifies Indirect Tax System
Speaking on the GST 2.0 reform, the President said the next-generation overhaul has filled citizens with enthusiasm by simplifying tax rates and reducing the burden on essential goods.
Effective September 22, 2025, GST adopted a two-tier structure, where most goods and services attract 5% or 18% tax . A 40% GST rate continues to apply on ultra-luxury goods, tobacco, and related products.
As part of the reform:
- 99% of goods earlier under the 12% slab were moved to the 5% slab
- 90% of items under the 28% slab were shifted to the 18% slab
This rationalisation replaced the earlier four-slab GST structure (5%, 12%, 18%, 28%) introduced at GST’s launch on July 1, 2017, which also included a compensation cess on luxury and sin goods.
Consumption Boost Seen After GST Rate Cuts
Highlighting the impact of the GST rate reductions, President Murmu said that two-wheeler registrations crossed 2 crore units in 2025, marking a new record and reflecting improved affordability and consumer demand following tax cuts.
"Old rules and provisions are being continuously updated in line with future needs," she said, reiterating the government’s commitment to reform-led growth.
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