New Delhi, Aug 15 (PTI) Prime Minister Narendra Modi on Friday said the government has undertaken tax reforms to make life easier for citizens, and improved capabilities has aided in raising the tax-free income limit of an individual to Rs 12 lakh per annum.

In his address to the nation on the 79th Independence Day, Modi said the government has undertaken reforms to fast-track income tax refunds and also implement faceless assessment.

"We have also undertaken reforms to make life easier for citizens. Income tax refund, faceless assessment, raising tax-free income limit to Rs 12 lakh per annum are all result of tax reforms. No one ever imagined that tax relief on income up to Rs 12 lakh is possible. When a nation's capability increases, its citizens benefit," Modi said.

In the 2025-26 Budget, the government had raised the income tax rebate threshold from Rs 7 lakh per annum to Rs 12 lakh. Taking into account standard deduction, the effective tax rebate comes to Rs 12.75 lakh a year.

A salaried person earning Rs 12.75 lakh a year will not have to pay any income tax.

Income tax refund issuance has been streamlined over the past 10 years.

As per data, there has been an 81 per cent decrease in number of days it takes to issue income tax refunds. It took 93 days to get I-T refunds in 2013, which has been brought down to just 17 days in 2024.

In terms of value, refunds have jumped 474 per cent in the last 11 years at Rs 4.77 lakh crore in 2024-25, significantly outpacing the 274 per cent growth in gross tax collections.

The faceless assessment scheme was launched in phases beginning October 2019.

Under it, a taxpayer or an assessee is not required to visit an I-T department office or meet a department official for income tax-related businesses.

A central electronic-based system picks up tax returns for scrutiny based on risk parameters and mismatches, and then allots them randomly to a team of IT officers in any city. PTI JD HVA

Income tax rebate expansion increases tax-exempt threshold, broadening no-tax eligibility and streamlining refunds and assessments. The government raised the income tax rebate threshold to Rs 12 lakh per annum, producing an effective no-tax threshold of Rs 12.75 lakh after standard deduction so that a salaried person at that level will not pay income tax. Tax-administration reforms include streamlined refund issuance with reduced processing times and larger disbursements, and a faceless assessment regime using a centralized electronic selection and random allocation system based on risk parameters and mismatches.