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Union Budget 2025 Key Highlights

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The Union Budget 2025, presented by Finance Minister Nirmala Sitharaman, lays out a robust framework aimed at driving India`s economic growth, fiscal stability, and overall development. Amidst a challenging global economic scenario, the budget`s focus is on stimulating growth, enhancing infrastructure, promoting digital transformation, and expanding social welfare initiatives.

One of the key highlights of the Budget 2025 is the significant relief provided to the middle-income group. A major change has been introduced in the taxation system, with several relaxations in the Tax Deducted at Source (TDS) provisions.

Under the new regime (Section 115BAC), individuals filing their Income Tax Return (ITR) will benefit from a rebate under Section 87A. This means that individuals with a total taxable income up to Rs 12 lakh will not be liable to pay any income tax, offering substantial relief to the salaried class and small businesses. Additionally, employees earning up to Rs 12.75 lakh will be exempt from TDS deductions by their employers, reducing the tax burden on both employees and employers.

BUDGET 2025-2026  KEY HIGHLIGHTS

 Proposed Income Tax Slab under new regime U/s 115BAC

0-4 lakh rupees

Nil

4-8 lakh rupees

5 per cent

8-12 lakh rupees

10 per cent

12-16 lakh rupees

15 per cent

16-20 lakh rupees

20 per cent

20- 24 lakh rupees

25 per cent

Above 24 lakh rupees

30 per cent

 

Kindly note there is no change for who choose to compute their income as per

old provisions of Income Tax Slab

0-2.50 lakh rupees

Nil

2.50-5.00 lakh rupees

5 per cent

5.00-10.00 lakh rupees

20 per cent

10.00 lakh rupees and above

20 per cent


 OTHER CHANGES PROPOSED


206C          Removal of TCS on remittances for education purposes, where such

                   remittance is out of a loan taken from a specified financial institution.

206C(1H)   Removal of TCS on transaction relating to sale of goods where TDS is also

       applicable.

 

Sec 206AB The, provisions of the higher TDS deduction will now apply only in non-

                   PAN cases.

 

                   The delay for payment of TCS up to the due date of filing statement is

                         decriminalized.

 

139(8A)      Now propose to extend the time-limit to file updated returns for any

                         assessment year, from the current limit of 02 years, to 4 years.


1. Economic Growth and Fiscal Target

In the backdrop of global uncertainties, the government aims to accelerate economic growth with a growth forecast of 6.8% for FY 2025-26. The fiscal deficit is projected to be 5.8% of GDP, a slight reduction compared to the previous year, indicating efforts towards fiscal consolidation. The government remains committed to maintaining a stable fiscal policy, while balancing growth and fiscal prudence.


2. Tax Reforms

A major highlight of Budget 2025 is the continued emphasis on simplification and rationalization of India`s tax structure:

Income Tax Cuts: To spur consumption and provide relief to the middle class, the government has announced tax reductions in certain income brackets, reducing the tax burden on salaried individuals and encouraging disposable income.

Corporate Tax Incentives: Small and medium-sized enterprises (SMEs) will benefit from tax breaks aimed at encouraging entrepreneurship and job creation.

Capital Gains Tax Rationalization: Measures are introduced to streamline the taxation of capital gains, making the process simpler for taxpayers and enhancing the ease of doing business.


3. Infrastructure Development

Infrastructure remains a key priority in the Union Budget 2025. The government has allocated ?15 lakh crore for infrastructure development, focusing on:

Roads and Highways: Expansion and modernization of national highways, with a special focus on connecting remote and rural areas.
Railways and Aviation: Major investments in railway modernization, smart city transport systems, and enhanced airport infrastructure.
Smart Cities & Rural Infrastructure: Promoting sustainability through eco-friendly infrastructure projects aimed at enhancing urban-rural connectivity.

4. Digital Transformation and Technology

In line with India`s ambitions to become a global digital leader, the Budget places a strong emphasis on technology and digital infrastructure:

Digital India Initiatives: A major push toward 5G infrastructure, AI, and cybersecurity, with funds allocated for building digital ecosystems across sectors such as education, healthcare, and finance.

Fintech Growth: The government is aiming to create a conducive environment for FinTech companies through policy reforms that ease compliance and encourage innovation.


5. Education and Skill Development

The Budget focuses on improving the quality and accessibility of education and skill development programs to cater to the future workforce:

National Education Policy Implementation: Significant investments to strengthen the National Education Policy (NEP) with emphasis on digital learning, research, and faculty development.

Skill Training for Youth: New skill centers are to be established in partnership with private players, ensuring a robust framework for youth employability, particularly in emerging sectors like AI, data science, and renewable energy.


6. Agriculture and Rural Development

To boost rural incomes and agriculture, the Budget provides support through:

PM Kisan Samman Nidhi: An increase in financial aid to farmers under the PM Kisan scheme.

Agri-Tech Initiatives: Promotion of innovative agricultural technologies, including drones and AI-based solutions, to improve productivity and sustainability.

Water Management Projects: Investment in large-scale irrigation projects and water conservation technologies to address challenges in water-scarce regions.


7. Healthcare and Social Welfare

The Budget introduces key initiatives to address health and social issues:

National Health Mission Expansion: Increased funding for public healthcare, especially for rural areas, through mobile health clinics and telemedicine services.

Ayushman Bharat Scheme: Expansion of the healthcare insurance coverage under the Ayushman Bharat scheme, targeting underprivileged sections of society.

Social Security Measures: Enhanced pension schemes and welfare benefits for senior citizens and economically weaker sections.


8. Sustainability and Green Growth

India continues its commitment to sustainable growth with major investments in green technologies:

Green Bonds for Clean Energy Projects: The government has proposed the issuance of green bonds to fund renewable energy projects, including solar and wind energy.

Electric Mobility and Battery Manufacturing: A strong push toward electric vehicles (EVs) and battery manufacturing, with policy incentives for manufacturers and buyers.

Environmental Conservation: Investment in afforestation, reforestation, and waste management to improve air quality and reduce carbon emissions.


9. Boosting Startups and Entrepreneurship

The Union Budget 2025 outlines steps to nurture startups and new-age entrepreneurs:

Startups and Innovation Hubs: The government will set up new innovation hubs and extend tax holidays for startups in their nascent stages.

Venture Capital Funding: A special fund will be created to support venture capital investments in high-potential sectors, such as deep-tech, biotech, and renewable energy.


 Conclusion:

The Union Budget 2025 demonstrates the government`s commitment to creating a self-reliant India (Atmanirbhar Bharat) with a focus on digital empowerment, sustainable growth, and social equity. While challenges such as inflation and global economic volatility persist, the Budget presents a balanced and forward-thinking approach to building a resilient economy that meets the needs of both urban and rural populations.

*Disclaimer: Terms and conditions apply. The information provided in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances.
Union Budget 2025  Key Highlights
 
 
 
Posted on: 01-Feb-2025 | Posted by: NIFM | Comment('0')
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