Finance Ministry data reveals who gets more income tax relief: Individuals vs corporates

The Government has foregone significantly higher tax revenue for individual taxpayers compared to corporates over the last five years, according to data presented in the Lok Sabha on Monday.

Responding to an unstarred question, Minister of State for Finance Pankaj Chaudhary shared a detailed account of tax exemptions and benefits granted under the Income-tax Act, 1961.

The Minister informed Parliament that the total revenue impact of major tax incentives for individuals and Hindu Undivided Families (HUFs) stood at ₹8,69,907.40 crore between FY 2019–20 and FY 2023–24. In comparison, corporates benefited from tax incentives amounting to ₹4,53,329.08 crore during the same period.

A major component of these reforms has been the rise in the basic exemption limit, from ₹2.5 lakh to ₹3 lakh in Budget 2023–24, and subsequently to ₹4 lakh in Budget 2025–26.

Additionally, the income tax rebate under Section 87A was enhanced substantially. While taxpayers earning up to ₹7 lakh were exempt under the earlier rebate, the latest changes ensure that no tax is payable on income up to ₹12 lakh under the New Regime, or ₹12.75 lakh for salaried employees due to the standard deduction.

The Minister noted that reforms introduced in Budget 2025–26 alone are expected to result in ₹1 lakh crore of direct tax revenue forgone, offering substantial relief to middle-class households while encouraging savings and investment.