The Union Budget 2025, presented by Finance Minister Nirmala Sitharaman, introduces major reforms focused on economic growth, tax relief, infrastructure development, and digital transformation. This year’s budget aims to empower the middle class, boost investments, and strengthen India’s financial resilience.
Key Highlights of Union Budget 2025
1. No Income Tax Up to ₹12 Lakh
One of the most significant announcements in Budget 2025 is the increase in the tax-free income limit to ₹12 lakh under the new income tax regime. Salaried taxpayers can also claim a standard deduction of ₹75,000, effectively making the tax-exempt income limit ₹12.75 lakh. This move is expected to benefit millions of middle-class taxpayers and increase disposable income.
Check out our detailed blog on: New Income tax rates for FY 2025-26
2. Revised Income Tax Slabs (New Tax Regime)
The government has restructured the tax slabs to ensure higher take-home pay for individuals. The revised new income tax rates 2025 are as follows:
| Income Slab | Tax Rate |
| 0 – ₹4 lakh | Nil |
| ₹4 – ₹8 lakh | 5% |
| ₹8 – ₹12 lakh | 10% |
| ₹12 – ₹16 lakh | 15% |
| ₹16 – ₹20 lakh | 20% |
| ₹20 – ₹24 lakh | 25% |
| Above ₹24 lakh | 30% |
This restructuring is expected to reduce the tax burden and boost household consumption.
3. Higher Capital Expenditure for Infrastructure
The government has allocated a record ₹11.2 trillion for infrastructure development, covering:
- Roadways and highways expansion
- Railway modernization
- Urban development projects
- Renewable energy initiatives
This is expected to drive job creation and improve economic growth.
4. Focus on Digital Economy & Innovation
The budget emphasizes digital transformation, including:
- Increased funding for AI, blockchain, and cybersecurity initiatives
- Expansion of Digital India programs
- Promotion of fintech startups and digital payments
- Digital skilling programs for youth
5. Support for Agriculture & Rural Development
- Subsidized credit facilities for farmers
- Investment in modern irrigation and water conservation
- Higher MSP (Minimum Support Price) for key crops
- Rural employment schemes to improve livelihood opportunities
6. FDI & Manufacturing Boost
- Increase in FDI limit for insurance and pension sectors
- Tax incentives for manufacturing in sectors like electronics, semiconductors, and EVs
- Expansion of the Make in India and Atmanirbhar Bharat initiatives
7. Fiscal Deficit & Borrowing Plan
The government has targeted a fiscal deficit of 4.4% of GDP, balancing economic stimulus with fiscal discipline. To fund the deficit, the government plans to raise capital through domestic and international borrowings.
8. Social Welfare & Women Empowerment
- Higher budget allocations for healthcare & education
- New skill development programs for youth
- Increased financial inclusion measures for women entrepreneurs
- Strengthening of affordable housing schemes
9. Support for Startups & MSMEs
- Tax exemptions for startups extended for five years
- Increased credit support for MSMEs
- Simplified compliance regulations for small businesses
Conclusion
The Union Budget 2025 reflects the government’s commitment to boosting economic growth, easing the tax burden on the middle class, and investing in infrastructure and digital transformation. With tax reliefs, enhanced investment opportunities, and targeted social programs, this budget sets the stage for India’s financial future.
Stay updated with the latest budget developments and financial insights by following government announcements and expert analyses.
