Union Budget 2025: Check out the Tax Reforms, Income Tax Relief, and Infrastructure Investments

Explore the key highlights of India's Union Budget 2025, including significant tax reforms, income tax relief for middle-class earners, and substantial investments in infrastructure to drive economic growth.

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Feb 3, 2025 - 12:09 Updated: Feb 3, 2025 - 16:28
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Union Budget 2025: Check out the Tax Reforms, Income Tax Relief, and Infrastructure Investments
Nirmala Sitharaman

Finance Minister Nirmala Sitharaman presented India's Union Budget for the fiscal year 2025-26, introducing significant measures aimed at stimulating economic growth, enhancing middle-class spending power, and promoting inclusive development.

Highlights of the Union Budget 2025-26:

1. Tax Reforms:

  • Income Tax Relief: The budget proposes a complete tax rebate for individuals earning up to ₹12.75 lakh per annum under the new tax regime, effectively eliminating income tax for this segment. This move is anticipated to boost household savings and consumption among the middle class.

  • TDS and TCS Adjustments: The threshold for Tax Deducted at Source (TDS) on interest for senior citizens has been increased from ₹50,000 to ₹1 lakh. Additionally, the annual limit for TDS on rent has been raised from ₹2.4 lakh to ₹6 lakh, aiming to provide further financial relief.

2. Agricultural Initiatives:

  • Prime Minister Dhan-Dhaanya Krishi Yojana: This new scheme targets 100 districts with low agricultural productivity, aiming to benefit approximately 1.7 crore farmers through various support measures.

  • Enhanced Credit Access: The government plans to facilitate short-term loans of up to ₹5 lakh for 7.7 crore farmers, fishermen, and dairy farmers, enhancing their financial stability and promoting rural prosperity.

3. Investment in Research and Innovation:

  • Research, Development, and Innovation Initiative: An allocation of ₹20,000 crore has been made to implement a private sector-driven initiative focusing on research, development, and innovation, aiming to position India as a leader in technological advancements.

  • PM Research Fellowship: The budget introduces ten thousand fellowships for technological research in premier institutions like IITs and IISc, fostering innovation and supporting the nation's youth.

4. Export Promotion and Trade Facilitation:

  • Incentives for Electronics and Electric Vehicles (EVs): Exemptions are proposed for components such as open cells used in LED/LCD TVs and capital goods for lithium-ion batteries used in mobile phones and EVs, aiming to boost domestic manufacturing and exports.

  • Leather Industry Support: Wet blue leather will be fully exempted from basic customs duties to promote domestic consumption and enhance exports, benefiting the leather industry.

5. Economic Projections and Fiscal Discipline:

  • Growth Rate: The budget projects a growth rate of 6.3% to 6.8% for the next financial year, aligning with the vision of "Viksit Bharat@2047," which envisions India as a developed nation by its 100th year of independence.

  • Fiscal Deficit: A commitment to reducing the fiscal deficit to 4.4% of GDP has been outlined, reflecting the government's focus on maintaining fiscal discipline while fostering economic growth.

The Union Budget 2025-26 underscores the government's dedication to bolstering the economy through strategic tax reforms, substantial investments in agriculture and innovation, and measures to enhance trade and exports. These initiatives aim to create a more inclusive and prosperous future for all citizens.

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