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• Salaried class to pay nil income tax upto Rs. 12.75 Lakh per annum in new tax regime
• Union budget recognises 4 engines of development – agriculture, msme, investment and exports
• Benefitting 1.7 Crore farmers, ‘prime minister dhan-dhaanya krishi yojana’ to cover 100 low agricultural productivity districts
• “Mission for aatmanirbharta in pulses” with a special focus on tur, urad and masoor to be launched
• Loans upto Rs. 5 Lakhs through kcc under modified interest subvention scheme
• Fy-25 estimated to end with fiscal deficit of 4.8%, Target to bring it down to 4.4% In fy-26
• Significant enhancement of credit with guarantee cover to msmes from Rs. 5 cr to Rs. 10 cr
• A national manufacturing mission covering small, medium and large industries for furthering “make in india”
• 50,000 Atal tinkering labs in government schools in next 5 years
• Centre of excellence in artificial intelligence for education, with a total outlay of Rs. 500 crore
• Pm svanidhi with enhanced loans from banks, and upi linked credit cards with Rs. 30,000 limit
• Gig workers to get identity cards, registration on e-shram portal & healthcare under pm jan arogya yojana
• Rs. 1 Lakh crore urban challenge fund for ‘cities as growth hubs’
• Nuclear energy mission for r&d of small modular reactors with an outlay of Rs. 20,000 crore
• Modified udan scheme to enhance regional connectivity to 120 new destinations
• Rs. 15,000 Crore swamih fund to be established for expeditious completion of another 1 lakh stressed housing units
• Rs. 20,000 Crore allocated for private sector driven research development and innovation initiatives
• Gyan bharatam mission for surveyand conservation of manuscripts to cover more than one crore manuscripts
• Fdi limit enhanced for insurance from 74 to 100 per cent
• Bcd exempted on 36 lifesaving drugs and medicines for treating cancer, rare and chronic diseases
Union Minister of Finance and Corporate Affairs Smt. Nirmala Sitharaman presented the Union Budget 2025-26 in Parliament on 1st February 2025. Quoting Telugu poet and playwright Shri Gurajada Appa Rao’s famous saying, ‘A country is not just its soil; a country is its people.’ – the Finance Minister presented the Union Budget 2025-26 with the theme “Sabka Vikas” stimulating balanced growth of all regions.
In line with this theme, the Finance Minister outlined the broad Principles of Viksit Bharat to encompass the following:
a) Zero-poverty;
b) Hundred per cent good quality school education;
c) Access to high-quality, affordable, and comprehensive healthcare;
d) Hundred per cent skilled labour with meaningful employment;
e) Seventy per cent women in economic activities; and
f) Farmers making our country the ‘food basket of the world’.
The Union Budget 2025-2026 promises to continue Government’s efforts to accelerate growth, secure inclusive development, invigorate private sector investments, uplift household sentiments, and enhance spending power of India’s rising middle class. The Budget proposes development measures focusing on poor (Garib), Youth, farmer (Annadata) and women (Nari). The Budget aims to initiate transformative reforms in Taxation, Power Sector, Urban Development, Mining, Financial Sector, and Regulatory Reforms to augment India’s growth potential and global competitiveness. The highlights of the Budget are as follows:
PART A
Budget Estimates 2025-26
• The total receipts other than borrowings and the total expenditure are estimated at Rs. 34.96 lakh crore and Rs. 50.65 lakh crore respectively.
• The net tax receipts are estimated at Rs. 28.37 lakh crore.
• The fiscal deficit is estimated to be 4.4 per cent of GDP.
• The gross market borrowings are estimated at Rs. 14.82 lakh crore.
• Capex Expenditure of Rs.11.21 lakh crore (3.1% of GDP) earmarked in FY2025-26.
AGRICULTURE AS THE 1ST ENGINE OF DEVELOPMENT
Prime Minister Dhan-Dhaanya Krishi Yojana – Developing Agri Districts Programme
• The programme to be launched in partnership with the states, covering 100 districts with low productivity, moderate crop intensity and below-average credit parameters, to benefit 1.7 crore farmers.
Building Rural Prosperity and Resilience
• A comprehensive multi-sectoral programme to be launched in partnership with states to address under-employment in agriculture through skilling, investment, technology, and invigorating the rural economy.
• Phase-1 to cover 100 developing agri-districts.
Aatmanirbharta in Pulses
• Government to launch a 6-year “Mission for Aatmanirbharta in Pulses” with focus on Tur, Urad and Masoor.
• NAFED and NCCF to procure these pulses from farmers during the next 4 years.
Comprehensive Programme for Vegetables & Fruits
• A comprehensive programme to promote production, efficient supplies, processing, and remunerative prices for farmers to be launched in partnership with states.
Makhana Board in Bihar
• A Makhana Board to be established to improve production, processing, value addition, and marketing of makhana.
National Mission on High Yielding Seeds
• A National Mission on High Yielding Seeds to be launched aiming at strengthening the research ecosystem, targeted development and propagation of seeds with high yield, and commercial availability of more than 100 seed varieties.
Urea Plant in Assam
• A plant with annual capacity of 12.7 lakh metric tons to be set up at Namrup, Assam.
MSMEs AS THE 2ND ENGINE OF DEVELOPMENT
Revision in classification criteria for MSMEs
• The investment and turnover limits for classification of all MSMEs to be enhanced to 2.5 and 2 times respectively.
Fund of Funds for Startups
• A new Fund of Funds, with expanded scope and a fresh contribution of Rs. 10,000 crore to be set up.
Scheme for First-time Entrepreneurs
• A new scheme for 5 lakh women, Scheduled Castes and Scheduled Tribes first-time entrepreneurs to provide term-loans upto Rs. 2 crore in the next 5 years announced.
Support for Food Processing
• A National Institute of Food Technology, Entrepreneurship and Management to be set up in Bihar.
Furthering “Make in India”
• A National Manufacturing Mission covering small, medium and large industries for furthering “Make in India” announced.
INVESTMENT AS THE 3RD ENGINE OF DEVELOPMENT
I. Investing in People
Saksham Anganwadi and Poshan 2.0
• The cost norms for the nutritional support to be enhanced appropriately.
Budget will drive the aspirations of Gareeb, Yuva, Annadata and Nari: JP Nadda
In series of posts on social media BJP National President Shri Jagat Prakash Nadda said, “The Union Budget 2025 is a visionary roadmap that embodies the aspirations and dreams of 140 crore Indians, lighting the way towards Hon. PM Shri @narendramodi ji’s vision of a ‘Viksit Bharat.’By focusing on the four engines-Agriculture, MSME, Investment, and Export, #ViksitBharatBudget2025 will drive the aspirations of Gareeb, Yuva, Annadata and Nari, ensuring that no one is left behind on the road to progress.
I express my gratitude to our PM Modi Ji & Congratulate Finance Minister @nsitharaman ji & her team for the visionary and futuristic, growth oriented and all inclusive Budget.”
Atal Tinkering Labs
• 50,000 Atal Tinkering Labs to be set up in Government schools in next 5 years.
Broadband Connectivity to Government Secondary Schools and PHCs
• Broadband connectivity to be provided to all Government secondary schools and primary health centres in rural areas under the Bharatnet project.
Bharatiya Bhasha Pustak Scheme
• Bharatiya Bhasha Pustak Scheme announced to provide digital-form Indian language books for school and higher education.
National Centres of Excellence for Skilling
• 5 National Centres of Excellence for skilling to be set up with global expertise and partnerships to equip our youth with the skills required for “Make for India, Make for the World” manufacturing.
Expansion of Capacity in IITs
• Additional infrastructure to be created in the 5 IITs started after 2014 to facilitate education for 6,500 more students.
Centre of Excellence in AI for Education
• A Centre of Excellence in Artificial Intelligence for education to be set up with a total outlay of Rs. 500 crore.
Expansion of medical education
• 10,000 additional seats to be added in medical colleges and hospitals next year, adding to 75000 seats in the next 5 years.
Day Care Cancer Centres in all District Hospitals
• Government to set up Day Care Cancer Centres in all district hospitals in the next 3 years, 200 Centres in 2025-26.
Strengthening urban livelihoods
• A scheme for socio-economic upliftment of urban workers to help them improve their incomes and have sustainable livelihoods announced.
PM SVANidhi
• Scheme to be revamped with enhanced loans from banks, UPI linked credit cards with Rs. 30,000 limit, and capacity building support.
Social Security Scheme for Welfare of Online Platform Workers
• Government to arrange for identity cards, registration on e-Shram portal and healthcare under PM Jan Arogya Yojna, for gig-workers.
II. Investing in the Economy
Public Private Partnership in Infrastructure
• Infrastructure-related ministries to come up with a 3-year pipeline of projects in PPP mode, States also encouraged.
Support to States for Infrastructure
• An outlay of Rs.1.5 lakh crore proposed for the 50-year interest free loans to states for capital expenditure and incentives for reforms.
Nuclear Energy Mission
• Amendments to the Atomic Energy Act and the Civil Liability for Nuclear Damage Act to be taken up.
• Nuclear Energy Mission for research & development of Small Modular Reactors (SMR) with an outlay of Rs.20,000 crore to be set up, 5 indigenously developed SMRs to be operational by 2033.
Shipbuilding
• The Shipbuilding Financial Assistance Policy to be revamped.
• Large ships above a specified size to be included in the infrastructure harmonized master list (HML).
Maritime Development Fund
• A Maritime Development Fund with a corpus of Rs. 25,000 crore to be set up, with up to 49 per cent contribution by the Government, and the balance from ports and private sector.
UDAN – Regional Connectivity Scheme
• A modified UDAN scheme announced to enhance regional connectivity to 120 new destinations and carry 4 crore passengers in the next 10 years.
• Also to support helipads and smaller airports in hilly, aspirational, and North East region districts.
Greenfield Airport in Bihar
• Greenfield airports announced in Bihar, in addition to the expansion of the capacity of Patna airport and a brownfield airport at Bihta.
Western Koshi Canal Project in Mithilanchal
• Financial support for the Western Koshi Canal ERM Project in Bihar.
Mining Sector Reforms
• A policy for recovery of critical minerals from tailings to be brought out.
SWAMIH Fund 2
• A fund of Rs. 15,000 crore aimed at expeditious completion of another 1 lakh
Budget has taken special care of the middle and salaried class: Rajnath Singh
I congratulate Finance Minister Smt. @nsitharaman for presenting an excellent and epoch-making budget that aligns with Prime Minister Shri @narendramodi’s vision of a Viksit Bharat.This budget has taken an all inclusive approach; from empowering poor sections of our society, to farmers to MSME to industries, and also strengthening research in advanced technologies like artificial intelligence, The Budget has taken special care of the middle and salaried class. I wholeheartedly welcome the decision to provide income tax relief for annual incomes up to 12 lakh rupees per annum.
PM Modi’s vision of making India self-reliant in defence has further got a big boost in this budget. Rs. 6.81 lakh crore have been allocated for the Ministry of Defence for FY 25-26. The capital outlay of 1,80,000 crore on defence forces will further help in the modernisation, technological advancement and capabilities of our defence forces.
I am confident that under the able leadership of Prime Minister Shri Narendra Modi, this budget will further strengthen the security and ensure the prosperity of country and take a big leap in realising the vision of Viksit Bharat.
Budget is the roadmap for Modi ji’s self-reliant India: Amit Shah
I congratulate Pm Shri Narendra Modi and Finance Minister Smt. @nsitharaman Union Home and Cooperation Minister Shri Amit Shah said, “The #ViksitBharatBudget2025 is the blueprint of the Modi government’s vision towards building a developed and best India in every field.This budget, which covers every sector – from farmers, poor, middle class, women and children’s education, nutrition and health to Start Up, innovation and investment – is the roadmap for Modi ji’s self-reliant India. I congratulate Prime Minister Shri @narendramodiji and Finance Minister Smt. @nsitharamanji for this comprehensive and visionary budget.
The middle class is always in PM Modi’s heart. Zero Income Tax till Rs. 12 Lakh Income. The proposed tax exemption will go a long way in enhancing the financial well-being of the middle class. Congratulations to all the beneficiaries on this occasion.
dwelling units, with contribution from the Government, banks and private investors announced.
Tourism for employment-led growth
• Top 50 tourist destination sites in the country to be developed in partnership with states through a challenge mode.
III. Investing in Innovation
Research, Development and Innovation
• Rs.20,000 crore to be allocated to implement private sector driven Research, Development and Innovation initiative announced in the July Budget.
Deep Tech Fund of Funds
• Deep Tech Fund of Funds to be explored to catalyze the next generation startups.
PM Research Fellowship
• 10,000 fellowships for technological research in IITs and IISc with enhanced financial support.
Gene Bank for Crops Germplasm
• 2nd Gene Bank with 10 lakh germplasm lines to be set up for future food and nutritional security.
Gyan Bharatam Mission
• A Gyan Bharatam Mission for survey, documentation and conservation of our manuscript heritage with academic institutions, museums, libraries and private collectors to be undertaken to cover more than 1 crore manuscripts announced.
EXPORTS AS THE 4TH ENGINE OF DEVELOPMENT
Export Promotion Mission
• An Export Promotion Mission, with sectoral and ministerial targets, driven jointly by the Ministries of Commerce, MSME, and Finance to be set up.
BharatTradeNet
• ‘BharatTradeNet’ (BTN) for international trade to be set-up as a unified platform for trade documentation and financing solutions.
National Framework for GCC
• A national framework to be formulated as guidance to states for promoting Global Capability Centres in emerging tier 2 cities.
REFORMS AS FUEL: FINANCIAL SECTOR REFORMS AND DEVELOPMENT
FDI in Insurance Sector
• The FDI limit for the insurance sector to be raised from 74 to 100 per cent, for those companies which invest the entire premium in India.
Credit Enhancement Facility by NaBFID
• NaBFID to set up a ‘Partial Credit Enhancement Facility’ for corporate bonds for infrastructure.
Grameen Credit Score
• Public Sector Banks to develop ‘Grameen Credit Score’ framework to serve the credit needs of SHG members and people in rural areas.
Pension Sector
• A forum for regulatory coordination and development of pension products to be set up.
High Level Committee for Regulatory Reforms
• A High-Level Committee for Regulatory Reforms to be set up for a review of all non-financial sector regulations, certifications, licenses, and permissions.
Investment Friendliness Index of States
• An Investment Friendliness Index of States to be launched in 2025 to further the spirit of competitive cooperative federalism anounced.
Jan Vishwas Bill 2.0
• The Jan Vishwas Bill 2.0 to decriminalize more than 100 provisions in various laws.
PART B
DIRECT TAX
• Revised tax rate structure
o In the new tax regime, the revised tax rate structure will stand as follows:
0-4 lakh rupees – Nil
4-8 lakh rupees – 5 percent
8-12 lakh rupees – 10 percent
12-16 lakh rupees – 15 percent
16-20 lakh rupees – 20 percent
20- 24 lakh rupees – 25 percent
Above 24 lakh rupees – 30 percent
• No personal income tax payable upto income of Rs 12 lakh (i.e. average income of Rs 1 lakh per month other than special rate income such as capital gains) under the new regime.
• This limit will be Rs 12.75 lakh for salaried tax payers, due to standard deduction of Rs 75,000.
• The new structure will substantially reduce the taxes of the middle class and leave more money in their hands, boosting household consumption, savings and investment.
• The new Income-Tax Bill to be clear and direct in text so as to make it simple to understand for taxpayers and tax administration, leading to tax certainty and reduced litigation.
• Revenue of about Rs. 1 lakh crore in direct taxes will be forgone.
TDS/TCS rationalization for easing difficulties
• Rationalization of Tax Deduction at Source (TDS) by reducing number of rates and thresholds above which TDS is deducted.
• The limit for tax deduction on interest for senior citizens doubled from the present Rs 50,000 to Rs 1 lakh.
The annual limit of Rs 2.40 lakh for TDS on rent increased to Rs 6 lakh.
The threshold to collect tax at source (TCS) on remittances under RBI’s Liberalized Remittance Scheme (LRS) increased from Rs 7 lakh to Rs 10 lakh.
The provisions of the higher TDS deduction will apply only in non-PAN cases.
Decriminalization for the cases of delay of payment of TCS up to the due date of filing statement.
Ease of Doing Business
• Introduction of a scheme for determining arm’s length price of international transaction for a block period of three years.
• Expansion of the scope of safe harbour rules to reduce litigation and provide certainty in international taxation.
• Exemption of withdrawals made from National Savings Scheme (NSS) by individuals on or after the 29th of August, 2024.
• Similar treatment to NPS Vatsalya accounts as is available to normal NPS accounts, subject to overall limits.
Employment and Investment
Tax certainty for electronics manufacturing Schemes
•Presumptive taxation regime for non-residents who provide services to a resident company that is establishing or operating an electronics manufacturing facility.
Introduction of a safe harbour for tax certainty for non-residents who store components for supply to specified electronics manufacturing units.
Extension for incorporation of Start-Ups
Extension of the period of incorporation by 5 years to allow the benefit available to start-ups incorporated before 1.4.2030.
Extension of investment date for Sovereign and Pension Funds
Extension of the date of making investments in Sovereign Wealth Funds and Pension Funds by five more years, to 31st March, 2030, to promote funding from them to the infrastructure sector.
INDIRECT TAX
Rationalisation of Customs Tariff Structure for Industrial Goods
Union Budget 2025-26 proposes to:
• Remove seven tariff rates. This is over and above the seven tariff rates removed in 2023-24 budget. After this, there will be only eight remaining tariff rates including ‘zero’ rate.
Relief on import of Drugs/Medicines
• 36 lifesaving drugs and medicines fully exempted from Basic Customs Duty (BCD).
• 6 lifesaving medicines to attract concessional customs duty of 5%.
• Specified drugs and medicines under Patient Assistance Programmes run by pharmaceutical companies fully exempted from BCD; 37 more medicines added along with 13 new patient assistance programmes.
Critical Minerals :
Cobalt powder and waste, the scrap of lithium-ion battery, Lead, Zinc and 12 more critical minerals fully exempted from BCD.
Lithium Ion Battery:
35 additional capital goods for EV battery manufacturing, and 28 additional capital goods for mobile phone battery manufacturing exempted.