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:
Income Range
|
Tax Rate
|
Up to RS. 4,00,000
|
NIL
|
RS. 4,00,001 - RS. 8,00,000
|
5%
|
RS. 8,00,001 - RS. 12,00,000
|
10%
|
RS. 12,00,001 - RS. 16,00,000
|
15%
|
RS. 16,00,001 - RS. 20,00,000
|
20%
|
RS. 20,00,001 - RS. 24,00,000
|
25%
|
Above RS. 24,00,000
|
30%
|
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