Union Budget 2025: Key Highlights and Analysis

In Budget 2025, Finance Minister Nirmala Sitharaman said that under the new tax regime, there will be no tax on income up to ₹12 lakh. The tax exemption limit on interest for senior citizens has been increased to ₹1 lakh. Know what big announcements were made for farmers, women, students, and others.

The Union Budget 2025 for the financial year 2025-26 was presented by Finance Minister Nirmala Sitharaman in Parliament today. This is her eighth consecutive budget, making her the first Finance Minister to do so. This budget is also the first full budget of the third government led by Prime Minister Narendra Modi.

This budget is in the news because people whose annual income is ₹12 lakh will not be taxed. And for salaried taxpayers, this limit will be up to ₹12.75 lakh.

Finance Minister Nirmala Sitharaman says that the main objective of the budget is to accelerate the economy, strengthen infrastructure, and promote sustainable development through reforms in six main areas of economic growth. Taxation, financial sector, energy sector, urban development, mining, and regulatory reforms are at the center.

Finance Minister Nirmala Sitharaman says that we aim to highlight the strength of India’s economy under the visionary leadership of Prime Minister Modi. She also said that this budget is to make India realize its economic dreams. It has been prepared to fulfill the aspirations of our middle class, farmers, small businesses, and startups.

Revised Capex of  10.18 lakh crore

The government has increased the capital expenditure to  10.18 lakh crore. And an Urban Challenge Fund of  1 lakh crore was created for urban development. And apart from all this, the government will give interest-free loans of  1.5 lakh crore to the states so that they can improve infrastructure.

Relief in Income Tax

The Finance Minister announced that under the new budget, no tax will have to be paid on income up to 12 lakhs. This is a big relief for the middle class people.

Apart from this, the limit for filing TR has been increased from 2 years to 4 years. So that taxpayers can get more time. And those earning more than 24 lakh will have to pay 30% tax.

The Finance Minister said that the government has been working to simplify the tax system for 10 years.

This includes reforms like faceless assessment, taxpayer charter, and faster return processing. Now about 99% of tax returns are based on self-assessment, that is, you can calculate your tax yourself.

Tax relief for senior citizens and tenants

The limit of tax exemption on interest for senior citizens has been increased to  1 lakh.

The limit of TDS on rented houses has also been increased from  2.4 lakh to  6 lakh, which will provide relief to tenants.

If money is being sent abroad through an education loan, then TCS (Tax Collected at Source) will no longer be levied on it.

The limit of TCS on sending money abroad under RBI's Liberalized Remittance Scheme (LRS) has been increased from  7 lakh to  10 lakh.

Provision of higher TDS only in non-PAN cases.

Additionally, the limit of TCS on remittance under RBI's Liberalized Remittance Scheme (LRS) has been increased from Rs 7 lakh to Rs 10 lakh.

Duties and Tariffs: Boost to imports and exports

The government has made several changes to simplify and facilitate customs duties to promote domestic manufacturing, exports and value addition.

Cobalt powder and lithium-ion battery scrap will no longer attract basic customs duty.

37 new medicines and 13 patient assistance program have been added to the customs-free list.

Only 5% customs duty will be levied on 6 medicines used in critical illnesses.

Financial reforms: Easier rules for investment

The government has increased the foreign investment (FDI) limit in the insurance sector from 74% to 100%, allowing foreign companies to invest more in India.

Infrastructure: Plan to make cities development hubs

The government has announced a 1 lakh crore 'Urban Challenge Fund', which aims to develop cities as centers of economic growth. The fund will invest in roads, water supply, and sanitation projects.

Under this fund, the government will cover 25% of the cost of the projects, while the remaining 50% will be funded through bonds, bank loans, or public-private partnerships (PPP). Apart from this, the government will also provide interest-free loans of 1.5 lakh crore for infrastructure improvement. An initial 10,000 crore has been proposed for the financial year 2025-26 to launch the initiative

Nuclear Energy

The Finance Minister has announced the launch of a new Nuclear Energy Mission to take India towards clean energy. The goal of this mission is to produce at least 100 gigawatts (GW) of nuclear power by 2050. Private companies will also be encouraged to participate in this sector, for which the government will make necessary changes in the Atomic Energy Act and the Civil Liability for Nuclear Damage Act.

Apart from this, the government has created a fund of 20,000 crore for the development of Small Modular Reactors (SMR). The objective of this fund is to start 5 indigenous SMRs in India by 2035. This will accelerate clean energy production and increase self-reliance in the energy sector.

Big opportunities for small businesses

The Finance Minister said that MSME (Micro, Small and Medium Enterprises) is the second big engine of India's growth, contributing to 45% of the country's exports.

The government has also decided to increase the investment and turnover limit for MSMEs, which will increase their growth rate by 2.5 times and turnover by 2 times.

New schemes for farmers

The Finance Minister said that the agriculture sector is the priority of the government. For this, a new initiative has been started under the Pradhan Mantri Krishi Yojana, called Jan Dhan Krishi Yojana. The objective of this scheme is:

To pay special attention to 100 districts with low production.

To promote crop diversification so that farmers do not depend on only one crop.

To improve storage and irrigation facilities.

To make long and short term loans easily available to farmers.

Kisan Credit Card: Easy loan facility to farmers

The government has made another big announcement for farmers. Through Kisan Credit Card (KCC), loans will be given to 7.7 crore farmers, fishermen and dairy farmers on easy terms.

Apart from this, under the interest rebate scheme, the loan limit for farmers has now been increased from 3,00,000 to 5,00,000. This will make it easier for farmers to meet the expenses required for farming.

Emphasis on education and nutrition

The Anganwadi and Poshan 2.0 program will provide nutrition support to 8 crore children, pregnant women, and adolescent girls.

The infrastructure at the 5 IITs established after 2014 will be expanded to accommodate more students. This will enable 6,500 more students to study.

5 National Centers of Excellence will be set up across the country for skill development.

Identity cards will be issued to gig workers and they will be registered on the e-Shram portal, which will help more than 1 crore workers.

Electricity: Improvement in distribution and transmission

States will be encouraged to improve power distribution. States that successfully implement these reforms will be allowed to borrow an additional 0.5% of their state GDP (GSDP) to strengthen their power companies.