Finance Minister Nirmala Sitharaman unveiled the Union Budget 2025, bringing substantial benefits to India’s middle class. A major highlight was the exemption of income tax for individuals earning up to ₹12 lakh annually, a measure aimed at boosting disposable income, savings, and investment under the reformed tax system.

Major Announcements:

Taxation Reforms

• Tax Exemption up to ₹12 lakh: Individuals with an annual income up to ₹12 lakh are exempt from paying income tax.
• Standard Deduction of ₹75,000: Salaried individuals earning up to ₹12.75 lakh can benefit from tax exemption due to the standard deduction.
• Updated Tax Slabs:
  • Income up to ₹4 lakh: No tax
  • ₹4 lakh – ₹8 lakh: 5% tax
  • ₹8 lakh – ₹12 lakh: 10% tax
  • ₹12 lakh – ₹16 lakh: 15% tax
  • ₹16 lakh – ₹20 lakh: 20% tax
  • ₹20 lakh – ₹24 lakh: 25% tax
  • Above ₹24 lakh: 30% tax
• Extended Tax Return Revision Period: Taxpayers now have 4 years instead of 2 years to revise their tax filings.
• Lower TDS Thresholds: Adjustments made to simplify compliance and reduce administrative burden.

Support for Businesses and Startups

• Enhanced MSME Credit Access: Increased credit coverage from ₹5 crore to ₹10 crore.
• Support for Startups: Eligible startups can access credit up to ₹20 crore from ₹10 crore.
• Additional ₹1.5 lakh crore Credit: Over five years, ₹1.5 lakh crore will be made available to businesses.
• ₹10,000 crore Alternate Investment Fund: New funding initiative to bolster startups.

Senior Citizens’ Benefits

• Tax-Free Withdrawals for NSS Holders: Withdrawals from National Savings Scheme (NSS) post-August 29, 2024, will be tax-exempt.
• NPS Vatsalya Accounts: Receives tax benefits similar to standard National Pension System (NPS) accounts.

Agricultural and Rural Development Initiatives

• Kisan Credit Card (KCC) Loan Increase: Loan limit increased to ₹5 lakh from ₹3 lakh.
• PM Dhan-Dhaanya Krishi Yojana: Aims to benefit 1.7 crore farmers across 100 districts with low productivity.
• Pulses Production Initiative: A six-year plan focusing on Tur, Urad, and Masoor cultivation.
• Comprehensive Fruits & Vegetables Program: Enhancing yield and farmer support.

Employment and Social Security Measures

• Gig Workers’ Welfare: Healthcare access under the PM Jan Arogya Yojana.
• Gig Worker Identity Cards: Registration on the e-Shram portal to formalize employment.
• 1 Crore Gig Workers Recognized: A social security framework introduced.

Infrastructure and Industry Development

• Capital Expenditure Target: Reduced to ₹10.18 lakh crore, down from ₹11.1 lakh crore.
• EV and Mobile Manufacturing Incentives:
  • 35 additional capital goods for EV battery manufacturing.
  • 28 additional capital goods for mobile phone battery production.
  • Customs Duty Exemptions: Key imports exempted to cut manufacturing costs.
• 36 Life-Saving Drugs: Granted duty and tax exemptions.

Tourism and Trade Enhancements

• Visa-Free Entry for Select Tourists: To boost international tourism.
• 50 Tourist Destinations: Development projects in collaboration with state governments.
• Bharat Trade Net Platform: A new digital framework for simplified export documentation.

Education and Research Development

• Expansion of IITs:
  • IIT Patna to receive additional infrastructure.
  • Five new IIT expansions adding 6,500 seats.

Energy and Sustainability Initiatives

• Nuclear Energy Development:
  • 100 GW nuclear power capacity by 2047.
  • Amendments to Atomic Energy Act and Civil Liability for Nuclear Damage Act to attract investment.

Foreign Investment and Financial Sector Reforms

• Increased FDI in Insurance: Foreign Direct Investment (FDI) limit raised from 74% to 100%.
• Revamped KYC Registry: Modernized Know Your Customer (KYC) system to be introduced in 2025.

State-Wise Budget Allocations

• Uttar Pradesh: Funding for expressways and urban renewal initiatives.
• Maharashtra: Increased support for Mumbai Metro expansion and rural agricultural development.
• Tamil Nadu: Investments in industrial corridors and IT hub expansion.
• West Bengal: Strengthened MSME and textile industry funding, with enhanced port infrastructure.
• Karnataka: Support for Bengaluru Metro and the growing startup ecosystem.
• Rajasthan: Investment in water conservation and solar energy projects.
• Bihar: Expansion of educational institutions and rural development initiatives.
• Kerala: Tourism enhancement and coastal conservation programs.

Conclusion

The Union Budget 2025 prioritizes financial relief for the middle class, business growth, agriculture, and infrastructure development. With a strategic focus on economic progress, employment generation, and social security, the budget is designed to be inclusive and growth-oriented. These measures are set to foster higher savings, investment, and consumption, further propelling India’s journey toward Viksit Bharat (Developed India).