Budget 2025 Is Here: Check Out the Key Budget Highlights

The day we’ve all been waiting for has finally arrived. The Union Budget 2025 is being presented, and with it, questions are on everyone’s mind. Will middle-class families get a break? Are there new opportunities for young entrepreneurs? Will the tax exemptions go up? Is there something in it for startups or the agriculture sector?

Let’s see what the Finance Minister has in store for us this year. This is a significant milestone as she closes in on Morarji Desai’s record of 10 Budget presentations.

Key Focus Areas of Budget 2025

Focus Area	Key Points
Tax Reforms	– No tax for income up to Rs 12 Lakh- Simplified tax slabs- Tax relief for higher-income earners
Support for MSMEs & Startups	– Credit guarantee cover for MSMEs increased- New fund-of-funds for startups- MSMEs to be a growth engine
Agricultural Growth & Rural Prosperity	– Special focus on 100 low-productivity districts- Support for 1.7 crore farmers- High-yielding seed mission
Manufacturing & Financial Inclusion	– Strengthening “Make in India”Custom credit cards for micro SMEsNational Manufacturing Mission
Inclusive Growth	– Focus on poor, youth, farmers, and women- Sector-specific plans for balanced development
Education & Skill Development	– 5 National Centers of Excellence for Skilling- 50,000 Atal Tinkering Labs to foster innovation- Day-care cancer centres in districts
Healthcare & Social Welfare	– 10,000 new medical college seats by FY26- Social security for gig workers- Infrastructure for 120 new destinations under the Udaan scheme
Infrastructure Development	– Rs 10.18 lakh crore capital expenditure Maritime development fund- Greenfield airports in Bihar and new water supply initiatives
Energy Transition & Regional Development	– 100 GW nuclear energy by 2047 Small modular reactor research- Support for 100 tourism destinations in partnership with states
Global Economic & Geopolitical Considerations	– Strategic focus on reducing tax litigation- Boosting India’s global economic standing through stable growth and regional cooperation

Budget Highlights 2025

Here are the key budget highlights 2025 you should know:

Income Tax Exemption and Simplified New Income Tax Slabs

Here is the biggest news of this year’s budget!

1. No Tax Up to Rs 12 Lakh: Individuals with annual incomes up to Rs 12 lakh will now be completely exempt from paying income tax. This is a major relief, especially for the middle-income group.
2. Tax Relief for Higher Incomes: For those earning Rs 25 lakh, they will benefit from a tax reduction of Rs 1.1 lakh under the new system. 

This will help those in the higher-income brackets too.

3. New Income Tax Slabs:
   • Up to Rs 4 lakh – No tax
   • Rs 4 lakh – Rs 8 lakh – 5%
   • Rs 8 lakh – Rs 12 lakh – 12%
   • Rs 12 lakh – Rs 16 lakh – 15%
   • Rs 16 lakh – Rs 20 lakh – 20%
   • Rs 20 lakh – Rs 24 lakh – 25%
   • Above Rs 24 lakh – 30%

These new slabs offer more tax relief to individuals across different income groups.

Tax Reforms: Relief for Middle-Class and Boost for Startups

Under the Budget 2025, the government has declared the simplification of Tax Deducted at Source (TDS) and Tax Collected at Source (TCS) rules. 

Know the difference between TDS and TCS!

• TCS Relief for Education Loans: TCS on education loans (up to Rs 10 lakh from specified financial institutions) will be removed.
• Extension of Tax Filing Time: Taxpayers now have up to 4 years to file updated tax returns (previously, it was 2 years).
• Support for Startups: The period for startups to avail tax benefits has been extended by 5 years.
• Higher TCS Threshold for LRS: The TCS on foreign remittances under the Liberalized Remittance Scheme (LRS) has been increased from Rs 7 lakh to Rs 10 lakh, providing more flexibility for international transactions.
• TDS Relief on Rent: If you are paying rent, the TDS threshold has been raised to Rs 6 lakh.
• No Penalties for TCS Delay: Delays in paying TCS will no longer be treated as a criminal offence.
• Self-Occupied Property: Taxpayers can now declare the value of up to two self-occupied properties as nil, reducing their tax burden.
• International Tax Relief: Safe harbour rules will be expanded to make international tax matters easier and reduce litigation.
• Support for Startups: Startups now have an extra five years to take advantage of tax benefits, helping them grow and succeed.

Customs Duty and Tariff Proposals

The government is eliminating 7 tariff rates to ease trade and promote easier imports.

1. 36 life-saving medicines are now fully exempt from Basic Customs Duty (BCD).
2. The BCD on flat panel displays will be raised from 10% to 20%.
3. Customs duty on open-cell TV panels has been reduced to 5%.
4. 12 critical minerals will be exempt from BCD, and 35 capital goods, especially for electric vehicle (EV) manufacturing, will also be added to the exemption list.

Fiscal Deficit Projections, Insurance, KYC and Market Borrowing

For FY25, the fiscal deficit is projected to be 4.8% of GDP, with an aim to bring it down to 4.4% by FY26.

1. Net tax receipts for FY26 are estimated to be Rs 28.37 lakh crore, while the gross market borrowing for FY26 is expected to be Rs 14.82 lakh crore.
2. The foreign direct investment (FDI) limit in the insurance sector has been increased from 74% to 100%.
3. A centralised KYC registry will be introduced to streamline financial processes across the country.

Tourism and Innovation in Budget 2025

50 tourism destinations will be developed with state partnerships to enhance infrastructure and attract global tourists. The Mudra loans will be available for businesses like homestays to promote local tourism.

Here is more to it:

1. The government is aiming to boost medical tourism with initiatives like “Heal-in-India.”
2. A deep-tech fund of funds will support technological innovation in the startup ecosystem.

A New Era of Energy and Infrastructure in Budget 2025

1. A new nuclear energy mission aims to add 100 GW of nuclear power by 2047. Rs 20,000 crore will be allocated to research and development of small modular reactors.
2. New financial assistance will be provided for the development of greenfield airports in Bihar and for the Western Kosi Canal project.

Budget 2025: Making Education and Healthcare More Accessible for All

India is all set to move ahead with exciting initiatives declared in the Union Budget 2025!

1. Broadband Connectivity: All government secondary schools and primary healthcare centres will get broadband connections, ensuring better access to digital resources and telemedicine services.
2. Vocational Training: To improve skill development, five National Centers of Excellence for Skilling will be set up.
3. Infrastructure in IITs: Additional infrastructure support will be provided to five IITs established after 2014.
4. Artificial Intelligence in Education: Three Centres of Excellence in AI will be created to enhance the use of technology in education, with a ₹500 crore investment.
5. Cancer Care: Day-care cancer centres will be available in every district by 2025-26, with 200 centres planned to ensure accessible cancer treatment.
6. Medical Education Expansion: 10,000 new seats in medical colleges and hospitals will be added in FY26, increasing opportunities for aspiring doctors.
7. PPP Mode Infrastructure: Each infrastructure-related ministry will create a three-year plan for development in Public-Private Partnership (PPP) mode, improving efficiency and collaboration.
8. Interest-Free Loans to States: Rs 1.5 lakh crore in 50-year interest-free loans will be given to states for capital expenditure, helping boost regional infrastructure development.
9. Asset Monetisation: A strategic asset monetisation plan will be launched for the period until FY30, unlocking the potential of government assets.
10. Urban Challenge Fund: With an investment of Rs 1 lakh crore, an Urban Challenge Fund will address urbanisation challenges and infrastructure growth.
11. Water Supply Infrastructure: MoUs will be signed with states under the Jal Jeevan Mission to improve water supply infrastructure across the country.

Key Announcements on MSMEs and Industry Initiatives

• India Post will be updated into a large public logistics organisation.
• MSMEs (Micro, Small, and Medium Enterprises) will be given more attention as a major growth driver, focusing on 5.7 crore MSMEs across India.
• The credit guarantee cover for MSMEs will be doubled from Rs 10 crore to Rs 20 crore, especially benefiting startups.
• Customised credit cards with a limit of Rs 5 lakh will be issued for micro SMEs to help them access easy finance.
• A new fund-of-funds worth Rs 10,000 crore will be set up to support startups and help them grow.
• A special scheme for the footwear and leather sector will create 22 lakh jobs and attract Rs 4 lakh crore in investments.
• A new initiative will be introduced to turn India into a global manufacturing hub for toys, boosting both local production and exports.

Budget 2025’s Push for Local Production, Solar Energy, and Vocational Training

A new National Manufacturing Mission will be launched to boost the “Make in India” initiative, encouraging local production.

• A new urea plant will be built in Namrup, Assam, with a capacity to produce 1.27 lakh tonnes of urea annually.
• The government will focus on creating a solar energy ecosystem, including making solar cells, batteries, and other related products.
• To support innovation, 50,000 Atal Tinkering Labs will be set up across India, inspiring students to think creatively and build new ideas.
• Broadband internet will be made available in all government schools and healthcare centres to improve access to information and services.
• Five National Centers of Excellence for Skilling will be established to train people in vocational skills and help them get better job opportunities.

Agriculture Development Plans and Key Initiatives

Here are some of the key steps being taken in the Union Budget 2025 to boost India’s agricultural sector:

• An agricultural program will target 100 districts with low productivity to improve farm output and help these regions grow.
• The Dhan Dhanya Krishi Yojana will focus on these 100 low-productivity districts to uplift farmers and enhance their income.
• The agricultural initiative aims to support 1.7 crore farmers, offering them more resources and opportunities for growth.

• A national mission will be launched to promote the use of high-yielding seeds.
• A 5-year mission will be introduced to boost cotton production specifically.
• An enabling framework will be created for the sustainable development of fisheries in India’s Exclusive Economic Zone (EEZ), ensuring better management and growth of marine resources.
• The loan limit under the new Kisan scheme will be increased to Rs 5 lakh from the previous Rs 3 lakh, providing farmers with more financial support for their activities.

That’s not all! The government is set to introduce a new tax bill next week, so stay tuned!

Source: MoneyControl

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