In a significant development poised to influence the political landscape of Delhi, the Union Budget 2025-26 has introduced substantial income tax reliefs aimed at the middle class. With the Delhi Assembly elections scheduled for February 5, this fiscal maneuver by the BJP-led Central government is being viewed by many as a calculated effort to garner support from a crucial voter base.
Wooing Middle Class in Delhi Elections
On February 1, 2025, Finance Minister Nirmala Sitharaman presented the Union Budget, unveiling a series of measures designed to stimulate economic growth and provide relief to various sectors. Among the most notable announcements was the increase in the income tax exemption limit. Under the new regime, individuals earning up to ₹12 lakh annually (approximately ₹1 lakh per month) will be exempt from paying income tax. This move is anticipated to significantly boost the disposable income of middle-class families, thereby enhancing their purchasing power.
“I am now happy to announce that there will be no income tax payable up to an income of ₹12 lakh under the new regime,” stated Sitharaman during her budget speech.
Delhi, the nation’s capital, is home to approximately 40 lakh income tax payers. The enhanced tax exemption is expected to directly benefit a substantial portion of this demographic. The BJP views this fiscal relief as a strategic advantage in the upcoming Assembly elections, aiming to strengthen its appeal among middle-class voters—a segment that has historically played a pivotal role in Delhi’s electoral outcomes.
Delhi BJP president Virendra Sachdeva emphasized the significance of this announcement, stating, “This is an important announcement that will deepen the confidence of the middle class in the BJP. The income tax relief for those with an annual income of ₹12 lakh will have a significant impact on the upcoming Delhi Assembly polls.”
BJP Eyeing Middle class Votes
The BJP, which has been out of power in Delhi since 1998, is making concerted efforts to unseat the incumbent Aam Aadmi Party (AAP), led by Arvind Kejriwal. The party believes that the tax relief measures will resonate with the middle class, bolstering its electoral prospects.
Vijender Gupta, a BJP leader contesting from the Rohini constituency, remarked, “A large number of middle-class people in Delhi will directly benefit from the move, boosting their purchasing power and driving market growth. It shows the BJP cares for the needs of the middle class and is going to be supported in a big way in the elections.”
On the other hand, the AAP has been vocal about its commitment to the middle class. Prior to the budget announcement, Arvind Kejriwal released a seven-point manifesto targeting the middle class, highlighting issues such as tax burdens and the need for better public services. He has previously pointed out that while Delhiites contribute over ₹1.78 lakh crore in income tax, they receive a disproportionately small share in central allocations.
The budget’s tax relief measures have elicited mixed reactions from Delhi residents. Subham Gupta from Burari expressed optimism, stating that the announcement would benefit many middle-class families. Conversely, Surendra Arora felt that the government should have extended relief to those earning up to ₹15 lakh, noting that individuals earning slightly above ₹12 lakh might end up paying higher taxes.
Election Commission’s Directive
It’s noteworthy that the Election Commission had earlier directed the Central government to refrain from announcing any Delhi-specific schemes or initiatives in the Union Budget, citing the enforcement of the Model Code of Conduct ahead of the Assembly polls. While the income tax relief is a nationwide measure, its timing and potential impact on Delhi’s electorate have become points of discussion.
Beyond the political implications, the budget’s focus on tax relief for the middle class is part of a broader strategy to stimulate economic growth. By increasing disposable incomes, the government aims to boost consumption, which constitutes a significant portion of India’s GDP. This approach is expected to have ripple effects across various sectors, including consumer goods, real estate, and automobiles.
As Delhi approaches its Assembly elections, the Union Budget 2025-26’s provisions, particularly the income tax relief for the middle class, have added a new dimension to the political discourse. While the BJP views this move as a catalyst to regain power in the capital, the AAP continues to emphasize its track record and commitment to public welfare. The electorate’s response to these developments will be revealed when the polls open on February 5.
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