The Union Budget for 2025-26, delivered by Finance Minister Nirmala Sitharaman, prioritizes economic growth, tax reductions, infrastructure enhancement, and support for crucial sectors. With a strong focus on increasing disposable income, expanding capital spending, and encouraging domestic industries, this budget has the potential to significantly influence India’s economic trajectory. This blog offers a simple overview of the Union Budget 2025, outlines key changes in income tax regulations, and examines its implications for the middle class and businesses.

• Income Tax Exemption: No income tax will be levied on earnings up to Rs. 12 Lakh.
• Exemption for Life-Saving Drugs: 36 critical life-saving medicines will be free from taxes and duties.
• Healthcare for Gig Workers: Gig workers will be covered under the PM Jan Arogya Yojana for healthcare benefits.
• Nuclear Energy Mission: The Nuclear Energy Mission aims to generate 100 GW of energy by 2047, with ₹20,000 Crore allocated for SMR research and development.
• Support for Startups: A Deep Tech Fund of Funds will be established to back next-generation startups.
• Farmer Support Enhancements: The budget strengthens farmer welfare with initiatives like PM Dhan-Dhaanya Krishi Yojana and higher Kisan Credit Card limits.

Focus on Infrastructure Development

To drive sustained economic growth, the government has raised capital expenditure by 10.1% for FY26.

• Investment in Transportation: The budget allocates funds to modernize highways, railways, and urban transport systems.
• Smart Cities & Urban Development: A renewed push for the Smart Cities initiative aims to enhance urban infrastructure.
• Affordable Housing Initiatives: New incentives for developers and homebuyers will make owning a home more attainable.

Support for Startups and Small Businesses

The government has introduced tax incentives and financial support to foster entrepreneurship and create jobs.

• Extended Tax Holiday: Startups established before March 2027 can benefit from an extended tax holiday period.
• Reduced Compliance Burden: Simplified GST rules and faster refund processes have been introduced to enhance ease of doing business.
• Access to Credit: Additional funding under the MUDRA scheme aims to make it easier for small businesses to secure loans.

Encouraging Second Home Ownership

• Tax Benefits on Home Loans: Tax incentives are now available for homebuyers purchasing a second property for investment or rental income.
• Reduced Stamp Duty: The government has lowered stamp duty on property transactions in select urban areas to stimulate the real estate market.

Fiscal Responsibility and Growth Initiatives

• Fiscal Deficit Target: The government plans to reduce the fiscal deficit to 4.4% of GDP for FY26 to ensure sustainable fiscal management.
• Asset Monetisation Plan 2025-30: The government aims to raise RS. 10 lakh crore by monetizing public assets and reinvesting the proceeds into new projects.
• Sector-Specific Growth Initiatives: The focus will be on key sectors such as healthcare, education, and green energy to fuel long-term growth.

Customs Duty Exemptions to Encourage Manufacturing

Several customs duty exemptions have been introduced to stimulate domestic manufacturing and exports:

• Critical Minerals: Key minerals like cobalt powder, lithium-ion battery waste, lead, and zinc are exempt from basic customs duties.
• Textile Industry Support: Two additional types of shuttle-less looms are now fully exempt from customs duties to aid the textile industry.

Positive Impact on the Middle Class

The 2025 Budget includes several measures aimed at benefiting middle-class taxpayers:

• Income Tax Relief: The revised income tax slabs will provide salaried individuals and pensioners with higher take-home pay.
• Housing Benefits: Tax incentives for second homeownership will offer financial security through rental income or property value appreciation.
• Cost of Living Adjustments: Investments in healthcare and urban infrastructure will improve the quality of life for middle-class citizens.

Changes in Income Tax Slabs: Union Budget 2025

The Union Budget 2025 did not propose any changes to the tax rates or slabs under the old tax regime. However, the new tax regime has seen a revision in its structure, as outlined below:

Income Tax Slabs under the New Regime:

If you are looking for safe investment option, then you can consider investing Bajaj Finance Fixed Deposit. With a top-tier AAA rating from financial agencies like CRISIL and ICRA, they offer one of the highest returns, up to 8.60% p.a.