Union Budget 2025

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 guide 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.

The Union Budget is the Government of India’s annual financial report that outlines its estimated income and planned expenditure for the upcoming year. It details the sources of revenue, allocation of funds across sectors, and proposed taxation measures. All official budget documents are published on the Ministry of Finance’s website for public reference.

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.

Also Read: Advance Tax Payment Online

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:

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Also Read: Tax-Saving Options

Why do I need a budget?

Since money is limited, you may not be able to afford everything you want or need. That’s why it’s important to set priorities and focus on what matters most for you and your family. A budget helps you plan, manage expenses wisely, and make better financial decisions.