Finance Minister Nirmala Sitharaman is presenting the first full Union Budget of Prime Minister Narendra Modi’s third term today. This marks her eighth consecutive Budget presentation, bringing her closer to Morarji Desai’s record of 10 Budgets.
The Union Budget 2025 comes at a crucial time, as India faces economic challenges. The country’s growth rate has slowed to a four-year low, and global uncertainties continue to rise. Additionally, US President Donald Trump’s recent warning about possible tariffs on India adds to the economic pressure.
Nirmala Sitharaman Presents Budget 2025
Union Finance Minister Nirmala Sitharaman is presenting her eighth consecutive Budget 2025 in Parliament. In her opening speech, she emphasized the government’s commitment to Sabka Vikas by ensuring balanced growth across all regions.
She also unveiled several new schemes for Bihar, which is set to hold elections later this year. Highlighting India’s economic progress, she stated, “Our economy is the fastest-growing among major nations. Over the past 10 years, our development track record and structural reforms have gained global recognition. Confidence in India’s potential has strengthened, and the next five years present a unique opportunity to achieve Sabka Vikas through balanced regional growth.”
Budget 2025 Highlights
The Budget 2025 new tax reforms bring significant changes aimed at easing financial burdens and boosting economic growth. These updates include higher tax exemptions, TDS relief, startup benefits, and sectoral initiatives for various industries.
Higher Tax Exemptions, TDS Relief, and Startup Boost
The government has introduced key tax benefits to provide relief to middle-class taxpayers and promote startups.
- Higher Tax Exemption: Individuals earning up to Rs 12 lakh annually will be exempt from income tax.
- Relief for Middle-Class Taxpayers: The reforms ease tax burdens on middle-income groups.
- TDS & TCS Rationalization: The number of TDS rates and thresholds will be reduced for simplified compliance.
- Higher TCS Threshold for LRS: The TCS threshold on remittances under the Liberalized Remittance Scheme (LRS) has been raised from Rs 7 lakh to Rs 10 lakh.
- TDS Relief on Rent: The TDS threshold on rent has been increased to Rs 6 lakh.
- Education Loan Exemption: TCS on education loans up to Rs 10 lakh (from specified financial institutions) will be removed.
- Decriminalization of TCS Delay: Delayed TCS payments will no longer be treated as a criminal offense.
- More Time for Taxpayers: The time limit to file updated tax returns has been extended from 2 years to 4 years.
- Self-Occupied Property Valuation: Taxpayers can now declare the value of two self-occupied properties as nil.
- International Tax Relief: The scope of safe harbor rules will be expanded to reduce international tax litigation.
- Support for Startups: The period of incorporation for startups to avail of tax benefits has been extended by five years.
Also Read: Budget 2024 Highlights, Key Points from FM Sitharaman’s Speech
Customs Duty and Tariff Proposals in Budget 2025
The government has made several adjustments to tariff rates and customs duty exemptions to boost trade and industry growth.
- Seven Tariff Rates to be Removed: Additional to those removed in previous budgets.
- Exemption on Social Welfare Surcharge: 82 tariff lines currently under cess will be exempted.
- 36 Life-Saving Drugs: Added to the list of medicines fully exempt from Basic Customs Duty (BCD).
- Increase in BCD on Flat Panel Displays: From 10% to 20%.
- Exemption on Critical Minerals: 12 more critical minerals will be exempt from BCD.
- Addition of 35 Capital Goods: For EV manufacturing, will be included in the BCD exemption list.
- Customs Duty Reduction: Open-cell customs duty reduced to 5%.
Fiscal Deficit Projections & Market Borrowing
Key financial projections have been outlined to manage fiscal policies and market borrowing effectively.
- Fiscal Deficit Projections: FY25 fiscal deficit estimated at 4.8% of GDP, with FY26 target at 4.4%.
- FY26 Tax Receipts: Net tax receipts for FY26 estimated at Rs 28.37 lakh crore.
- Market Borrowing: Gross market borrowing for FY26 projected at Rs 14.82 lakh crore.
- Tariff Adjustments: Proposal to remove 7 tariff rates, in addition to those eliminated in previous budgets.
- Capex for FY25: Revised capital expenditure for FY25 set at Rs 10.18 lakh crore.
Insurance FDI Hiked, New Income Tax Bill Coming Soon & More
The government is introducing major changes in the insurance sector and tax legislation.
- Insurance FDI Limit Raised: Foreign Direct Investment in insurance increased from 74% to 100%.
- New Income Tax Bill: A new income tax bill will be introduced next week.
- Central KYC Registry: Central KYC registry to be rolled out in 2025 for streamlined financial processes.
Key Announcements on Tourism and Innovation
The government is focusing on boosting tourism and fostering innovation through targeted policies.
- Tourism Destination Development: The top 50 tourism sites will be developed in partnership with states.
- Land Allocation for Tourism: States will provide land to enhance tourism infrastructure.
- Mudra Loans for Homestays: Homestay businesses will receive Mudra loan support.
- Medical Tourism Promotion: “Heal-in-India” initiatives will attract international patients.
- Deeptech Fund-of-Funds: A fund will be explored to support technological innovation and startups.
- National Geospatial Mission: This initiative will improve spatial data and mapping capabilities.
Key Announcements on Energy, Infrastructure, and Regional Development
Major investments and reforms are being introduced to drive energy and infrastructure development.
- 100 GW Nuclear Energy Target: India aims to achieve this goal by 2047.
- Small Modular Reactors: Rs 20,000 crore allocated for research and development.
- State Borrowing Incentive: States can borrow an additional 0.5% of their GSDP upon implementing reforms.
- Shipbuilding Assistance: A revamped policy will boost the shipbuilding industry.
- Maritime Development Fund: A Rs 25,000 crore fund will support the maritime sector.
- Modified Udaan Scheme: 120 new destinations will be connected across India.
- Greenfield Airports Development: Financial support will be provided for Bihar’s airport projects.
- Western Kosi Canal Project: Bihar’s irrigation infrastructure will receive financial backing.
Key Announcements on Education, Healthcare, Infrastructure, and Social Welfare
The government is making significant investments in education, healthcare, and social welfare initiatives.
- Broadband for Schools & Healthcare Centers: All government secondary schools and primary healthcare centres will be connected.
- National Centers of Excellence: Five skilling centres will enhance vocational training.
- AI Centers in Education: Three Centres of Excellence in AI will be established.
- Cancer Care Expansion: 200 district-level day-care cancer centres will be set up.
- Medical College Expansion: 10,000 new medical seats will be added.
- Gig Worker Social Security: A new scheme will offer insurance via the E-shram portal.
These reforms aim to drive economic growth, improve ease of doing business, and enhance social welfare initiatives across the nation.
Also Read: Union Budget 2024 Highlights, From Income Tax to Employment Benefit
FAQs
Q.1. What are the key tax reforms in Union Budget 2025?
Ans. Budget 2025 introduces higher tax exemptions, TDS relief, and startup incentives, including an income tax exemption for individuals earning up to ₹12 lakh annually.
Q.2. How does Budget 2025 support startups?
Ans. The government has extended the incorporation period for startups to avail tax benefits by five years and introduced additional sectoral incentives.
Q.3. What are the major infrastructure investments in Budget 2025?
Ans. Investments include 120 new flight destinations, shipbuilding incentives, greenfield airport development in Bihar, and the Western Kosi Canal Project for irrigation.
Q.4. How does Budget 2025 promote tourism?
Ans. The government plans in Budget 2025 to develop the top 50 tourism sites, allocate land for tourism infrastructure, and provide Mudra loans for homestays.
Q.5. What healthcare reforms are introduced in Budget 2025?
Ans. Reforms include expanding medical colleges, setting up 200 district-level cancer care centers, and connecting all government schools and healthcare centers with broadband.
