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What is one of the key benefits of the reduction in personal income tax as proposed in the Union Budget 2025-26?
  • a)
    Decreased government revenue
  • b)
    Increased disposable income for the middle class
  • c)
    Higher import dependency
  • d)
    Lower capital expenditure
Correct answer is option 'B'. Can you explain this answer?
Most Upvoted Answer
What is one of the key benefits of the reduction in personal income ta...
The reduction in personal income tax is aimed at providing significant tax relief to the middle class, which leads to an increase in disposable income. This additional income allows individuals to spend more, potentially boosting consumer demand in various sectors such as retail, real estate, and automobiles. Higher consumer spending is crucial for driving economic growth, especially in a recovering economy. Additionally, this approach reflects a broader strategy to support economic activity and enhance the quality of life for citizens. An interesting fact is that tax cuts can often lead to a multiplier effect in the economy, where increased spending leads to higher business revenues, which can then result in further investments and job creation.
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