budget 2025 highlights
Finance Minister Nirmala Sitharaman presented the first full Union Budget of Prime Minister Narendra Modi’s third term today, marking her record eighth consecutive Budget. This brings her closer to Morarji Desai’s milestone of 10 Budget presentations.
The Union budget 2025 highlights comes at a pivotal moment, with India’s economic growth slowing to a four-year low and global uncertainties—fueled by U.S. tariff threats and geopolitical tensions—posing fresh challenges. Against this backdrop, the Budget laid out a roadmap for economic resilience, focusing on tax relief, infrastructure expansion, and sectoral reforms. With significant income tax cuts, higher exemptions, and fresh incentives for startups and MSMEs, the government aims to boost middle-class incomes and drive long-term sustainable growth.
New Income Tax Regime: Higher Exemptions, Simplified Slabs
No Tax Up to Rs 12 Lakh:
Individuals earning up to Rs 12 lakh annually will not have to pay income tax.
Tax Relief for Higher Incomes:
Those earning Rs 25 lakh will get a benefit of Rs 1.1 lakh under the new regime.
Revenue Impact:
The exemptions will lead to Rs 1 lakh crore in direct tax revenue foregone and Rs 2,600 crore in indirect tax losses.
New Tax Slabs:
- Up to Rs 4 lakh – No tax
- Rs 4 lakh – Rs 8 lakh – 5%
- Rs 8 lakh – Rs 12 lakh – 12%
- Rs 12 lakh – Rs 16 lakh – 15%
- Rs 16 lakh – Rs 20 lakh – 20%
- Rs 20 lakh – Rs 24 lakh – 25%
- Above Rs 24 lakh – 30%
Tax Reforms and Relief for Middle-Class Taxpayers
- Higher Tax Exemption: Individuals earning up to Rs 12 lakh annually will not pay income tax.
- TDS & TCS Rationalization: The number of TDS rates and thresholds will be reduced to simplify compliance.
- Higher TCS Threshold for LRS: The TCS threshold on remittances under the Liberalized Remittance Scheme (LRS) has been raised from Rs 7 lakh to Rs 10 lakh.
- TDS Relief on Rent: The TDS threshold on rent has been increased to Rs 6 lakh.
- Education Loan Exemption: TCS on education loans up to Rs 10 lakh (from specified financial institutions) will be removed.
- Decriminalization of TCS Delay: Delayed payment of TCS will no longer be treated as a criminal offense.
- More Time for Taxpayers: The time limit to file updated tax returns has been extended from 2 years to 4 years.
Customs Duty and Tariff Proposals
- Seven Tariff Rates to be Removed: In addition to those removed in previous budgets.
- Exemption on Social Welfare Surcharge: 82 tariff lines currently under cess will be exempted.
- 36 Life-Saving Drugs: Added to the list of medicines fully exempt from Basic Customs Duty (BCD).
- Increase in BCD on Flat Panel Displays: From 10% to 20%.
- Exemption on Critical Minerals: 12 more critical minerals will be exempt from BCD.
Fiscal Deficit Projections & Market Borrowing
- Fiscal Deficit Projections: FY25 fiscal deficit estimated at 4.8% of GDP, with FY26 target at 4.4%.
- FY26 Tax Receipts: Net tax receipts for FY26 estimated at Rs 28.37 lakh crore.
- Market Borrowing: Gross market borrowing for FY26 projected at Rs 14.82 lakh crore.
- Capex for FY25: Revised capital expenditure for FY25 set at Rs 10.18 lakh crore.
Key Announcements on Energy, Infrastructure, and Regional Development
- Nuclear Energy Expansion: Aiming for 100 GW of nuclear energy by 2047.
- Shipbuilding Financial Assistance Policy: Revamped to boost the industry.
- Maritime Development Fund: Rs 25,000 crore fund set up to support the sector.
- Modified Udaan Scheme: Will connect 120 new destinations across India.
- Western Kosi Canal Project: Financial backing for key Bihar infrastructure.
Key Announcements on Education, Healthcare, and Social Welfare
- Broadband Connectivity: Provided to all government secondary schools and primary healthcare centres.
- Skilling Initiatives: Five National Centers of Excellence for Skilling to be established.
- Medical Education Expansion: 10,000 new seats in medical colleges and hospitals.
- Cancer Care: 200 day-care cancer centres to be established in FY25-26.
- New Social Security Scheme for Gig Workers: Registration on E-shram portal and insurance benefits.
Agriculture Development Plans
- Dhan Dhanya Krishi Yojana: Targeting 100 low-productivity districts.
- Support for Farmers: 1.7 crore farmers to benefit.
- Fisheries Initiative: Enabling framework for sustainable harnessing in India’s Exclusive Economic Zone (EEZ).
- Kisan Scheme Loan Increase: Loan income limit raised to Rs 5 lakh from Rs 3 lakh.
Key Announcements on MSMEs and Industry Initiatives
- India Post Transformation: To become a large public logistics organization.
- MSMEs as Growth Engine: Focus on 5.7 crore MSMEs.
- Credit Guarantee Cover: Increased from Rs 10 crore to Rs 20 crore for startups.
- Customised Credit Cards: Rs 5 lakh limit for micro SMEs.
- Fund-of-Funds for Startups: Rs 10,000 crore support.
Manufacturing, Innovation, and Infrastructure Boost
- National Manufacturing Mission: Strengthening “Make in India.”
- Urea Plant in Assam: 1.27 lakh tonnes capacity plant to be set up in Namrup.
- Solar PV & Battery Ecosystem: Development of solar photovoltaic cells, electrolysers, and grid-scale batteries.
- Atal Tinkering Labs: 50,000 new labs to foster innovation and creativity.
Conclusion
The Union Budget 2025 provides a roadmap for India’s economic growth by balancing fiscal prudence with ambitious reforms. With a focus on tax relief, infrastructure development, and support for key sectors like MSMEs, agriculture, and technology, the government aims to drive sustainable and inclusive growth. By prioritizing middle-class income relief, investment in startups, and bolstering critical sectors, this Budget lays the foundation for a robust and resilient economy.
