Budget 2025: ITC to HUL- FMCG, consumer durables stocks surge after FM announces income tax relief

Budget 2025: Several FMCG, consumer durables, auto and realty stocks jumped higher in intraday trade on Saturday, February 1, after Finance Minister Nirmala Sitharaman announced major tweaks in personal income tax rates and limits in Budget 2025 speech. Nifty FMCG index jumped up to 3 per cent, while the Consumer Durables index jumped over 2 per cent. The Realty index rose over a per cent.

Announcing the good news for the middle class, Nirmala Sitharaman said, “The middle class provide strengths to the economy. In recognition of their contribution, we have periodically reduced the tax burdens. I am now happy to announce that there will be no income tax up to an income of ₹12 lakhs.”

The FM also announced a change in tax slabs, which she said will leave more money in the hands of middle-class consumers, boosting household consumption, savings, and investment.

Shares of Godrej Consumer Products, Britannia, ITC, Hindustan Unilever (HUL), Marico, Tata Consumer and Varun Beverages jumped 3-6 per cent during the session.

Consumption stocks such as Zomato and Swiggy also surged up to 5 per cent.

From the consumer durables space, shares of Blue Star, Crompton Greaves Consumer Electricals, Whirlpool of India, Havells India and Voltas rose 2-5 per cent.

"Consumption theme to get a big boost with increase in tax slabs. The government has put in more money in the hands of middle class and with this change in taxation it will boost the slowing consumption. This is a major positive for FMCG, auto and consumer durable stocks," said Apurva Sheth, Head of Market Perspectives and Research, SAMCO Securities.

Changes in income tax: What the FM said

"I am now happy to announce that there will be no income tax payable up to income of ₹12 lakh (i.e. average income of ₹1 lakh per month other than special rate income such as capital gains) under the new regime. This limit will be ₹12.75 lakh for salaried taxpayers due to a standard deduction of ₹75,000," said FM.

Under the changed slabs, Sitharaman announced an income of up to ₹4 lakh will see no income tax. For an income of ₹4-8 lakh, tax rates will be 5 per cent. Similarly, tax rates were changed for ₹8-12 lakh (10 per cent), ₹12-16 lakh (15 per cent), ₹16-20 lakh (20 per cent), ₹20- 24 lakh (25 per cent) income slabs also. An income above 24 lakh will fetch a tax of 30 per cent.

"Slabs and rates are being changed across the board to benefit all tax-payers. The new structure will substantially reduce the taxes of the middle class and leave more money in their hands, boosting household consumption, savings and investment," said Sitharaman.

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