New Delhi, Feb 1 (PTI) Government employees' unions on Saturday welcomed the Centre's proposal to exempt Rs 12 lakh annual income from income tax ambit in the Union Budget for 2025-26 and hoped that the "big" reform will yield positive results.

They also hoped that the unprecedented reforms would be reflected in the recommendation of the 8th Pay Commission announced by the government recently.

"We whole-heartedly welcome the proposal to exempt Rs 12 lakh income from tax net. It is really a big reform and a majority of government employees will benefit from it," said Ashutosh Misra, general secretary of the Central Secretariat Service (CSS)Forum.

The Forum represents officers of the central secretariat service, who form the backbone of the central secretariat working.

In the Union Budget 2025-26 presented on Saturday, Union Finance Minister Nirmala Sitharaman announced that no income tax would be payable up to income of Rs 12 lakh annually, a move that is aimed at giving a big relief to the middle class, especially scores of government employees.

"All CSS officers are sure to get relief from the budgetary proposal announced by the finance minister," Misra said.

He said the Forum hopes that the central government will continue to look after the employees' welfare and "such positive steps would be reflected in the recommendation of the 8th pay commission announced by it".

Prime Minister Narendra Modi had last month approved setting up of the 8th Pay Commission to revise salaries of nearly 50 lakh central government employees and allowances of about 65 lakh pensioners.

Manjeet Singh Patel, national president of the All India NPS Employees Federation said the unprecedented move for exempting Rs 12 lakh income from the tax net will encourage government employees to further contribute towards nation-building.

"Approximately, 70 per cent of the total government employees will be benefited by the tax relief announced in the budget for 2025-26 today. Making taxless income up to Rs 12.75 lakh with standard deduction is a great step towards the middle-income group," he said.

Patel said his federation expresses deep gratitude to Modi and the finance minister for taking this "unprecedented step" aimed at welfare of the middle-class families and to increase their purchasing power. PTI AKV RHL

Income tax exemption expands taxable threshold, offering middle-class relief and informing central government pay review recommendations. The Union Budget proposes a income tax exemption raising the non-taxable threshold for individual annual incomes to provide relief to middle-income taxpayers, particularly central government employees, with standard deduction implications; unions welcome the reform and urge its reflection in forthcoming pay review recommendations affecting salaries and allowances for employees and pensioners.