As Finance Minister Nirmala Sitharaman delivered the Union Budget 2025, it became clear that the government is laying the foundation for a Viksit Bharat—a vision of a developed India marked by zero poverty, robust economic growth, and 100% quality education and healthcare. With a sharp focus on infrastructure, MSMEs, agriculture, youth empowerment, and tax reforms, the budget aims to propel India toward long-term prosperity. Here’s a deep dive into the key takeaways.
The Union Budget 2025-26 has brought significant reforms aimed at easing the financial burden of taxpayers, especially the middle class, while fostering a progressive and inclusive economic environment. Below are the key highlights from the budget:
1. Zero Income Tax for Income up to ₹12 Lakh
The government has introduced a significant reform in the personal income tax structure under the new tax regime:
- ‘Nil tax’ slab raised to ₹12.00 lakh (₹12.75 lakh for salaried taxpayers with the standard deduction of ₹75,000).
- The new structure aims to reduce taxes for the middle class, leaving more disposable income in their hands. This is expected to boost household consumption, savings, and investment.
- Revised tax slabs:
2. Rationalizing TDS and TCS
The government has simplified the structure of Tax Deducted at Source (TDS) and Tax Collected at Source (TCS), benefiting taxpayers across different segments.
Key changes include:
- Doubling the TDS limit on interest for senior citizens from ₹50,000 to ₹1 lakh.
- Increasing the annual TDS limit on rent from ₹2.40 lakh to ₹6 lakh.
- Raising the threshold for tax collection at source on remittances under the RBI’s Liberalized Remittance Scheme from ₹7 lakh to ₹10 lakh.
- Ensuring only TDS, and not TCS, is applied to goods sale transactions.
These measures underline the government’s commitment to simplifying taxation and providing relief to taxpayers. By significantly raising the tax exemption limit and streamlining TDS/TCS processes, the budget strives to enhance economic activity and foster growth across all sectors.
This year’s Union Budget is poised to leave more money in the hands of individuals and households, empowering them to contribute to India’s robust and resilient economy.
1. Turbocharging Economic Growth
Investing in Infrastructure & MSMEs
- ₹1.5 lakh crore allocated for states’ infrastructure projects.
- A Second Asset Monetization Plan (₹10 lakh crore) will finance large-scale infrastructure ventures over the next five years.
- MSMEs, which contribute 45% of India’s exports, will receive enhanced credit access and targeted financial incentives.
- The UDAAN regional connectivity scheme revamped to cover 120 new destinations, benefiting 4 crore passengers in the next decade.
2. Middle-Class Relief & Economic Empowerment
- A renewed focus on household spending and private investments to drive economic sentiment.
- The revamped UDAAN scheme will improve regional connectivity, making travel more affordable for the middle class.
- A simplified tax regime with the introduction of a new Income Tax Bill ensuring a hassle-free experience for taxpayers.
3. Supporting Youth, Women, and Farmers
Education & AI-Powered Innovation
- ₹20,000 crore allocated for deep tech startups and an AI Centre of Excellence to revolutionize education and employment opportunities.
- 10,000 fellowships for tech research at IITs and IISc.
- A ₹500 crore AI initiative in education will expand medical education and add 10,000 new medical seats.
Empowering Women & Farmers
- Women entrepreneurs from SC/ST backgrounds will benefit from new financial inclusion schemes.
- PM Dhan Dhanya Krishi Yojana launched to boost agriculture in 100 districts, emphasizing high-yielding seeds and increased Kisan Credit Card limits (₹5 lakh).
- A new National Institute of Food Technology will help farmers move toward value-added food processing, increasing profits.
4. Fiscal Discipline & Growth Strategy
- The fiscal deficit target set at 4.8% of GDP, striking a balance between economic expansion and financial prudence.
- Public-Private Partnerships (PPP) in infrastructure will drive investments, reducing the burden on government spending.
- ₹1 lakh crore Urban Challenge Fund created to support smart cities, water sanitation, and urban redevelopment projects.
5. Strengthening India’s Global Position
Boosting Exports & Foreign Trade
- A new export promotion mission led by the Ministries of Commerce, MSMEs, and Finance to ease trade barriers and provide financing to exporters.
- Bharat Trade Net, a Digital Public Infrastructure, will streamline documentation and compliance for seamless international trade.
Nuclear & Renewable Energy Revolution
- 100 GW of nuclear energy by 2047, backed by a ₹20,000 crore Nuclear Energy Mission focusing on Small Modular Reactors (SMRs).
- Reforms in the Atomic Energy Act to allow private sector participation in nuclear energy.
6. Geopolitical Strength & Vision for Viksit Bharat
Despite global geopolitical uncertainties, India remains the world’s fastest-growing major economy. The Budget 2025 solidifies India’s trajectory towards becoming a global leader, with a commitment to:
✔ Zero poverty
✔ 100% skilled labor with meaningful employment
✔ 70% female participation in the workforce
✔ Farmers making India a global food hub