Union Budget 2025: Key Highlights and New Tax Regime Explained

Union Budget 2025: Key Highlights and New Tax Regime Explained

The Union Budget 2025, presented by Finance Minister Nirmala Sitharaman, focuses on economic growth, tax relief for the middle class, and infrastructure development. Here’s a breakdown of the key announcements and their implications.

Income Tax Reforms: Major Relief for Taxpayers

• Increased Tax Exemption Threshold – The tax exemption limit has been raised from ₹8 lakh to ₹12 lakh per annum, providing relief to salaried individuals and boosting disposable income.

• Revised Tax Slabs – The maximum tax rate of 30% will now be applicable to incomes above ₹24 lakh under the new tax regime.

• Standard Deduction – A standard deduction of ₹50,000 has been introduced for salaried employees under the new tax regime, offering additional savings.

These changes aim to enhance consumer spending and economic growth.

New Tax Regime 2025: Key Changes and Comparison

Revised Tax Slabs

• ₹0 – ₹12 lakh – No tax

• ₹12 – ₹18 lakh – 10%

• ₹18 – ₹24 lakh – 20%

• Above ₹24 lakh – 30%

Comparison with the Old Tax Regime

The old tax regime continues to exist alongside the new one, offering taxpayers the option to choose based on their financial situation.

Criteria	New Tax Regime	Old Tax Regime
Exemption Limit	₹12 lakh	₹8 lakh
Standard Deduction	₹50,000	Available under specific conditions
Section 80C Deductions	Not applicable	Up to ₹1.5 lakh
Housing Loan Interest	Not applicable	Deductible

Taxpayers need to evaluate which regime benefits them more, considering their income levels and eligible deductions.

Agriculture and Rural Development: Support for Farmers

• High-Yield Crop Program – A new initiative targeting 17 million farmers will promote high-yield and climate-resilient crop varieties.

• Subsidy Allocations – ₹4.57 trillion allocated for food, fertilizer, and rural employment subsidies to support the rural economy.

This ensures food security while boosting farmers' income.

Infrastructure and Investment: Boosting Growth

• Capital Expenditure Growth – Increased capital spending to support private investment and infrastructure development.

• National Manufacturing Mission – A new initiative to enhance industrial output and exports.

These measures aim to accelerate India's industrial and infrastructural growth.

Social Welfare and Employment: Empowering the Workforce

• Gig Economy Support – New policies introduced to formalize gig workers, ensuring better healthcare and welfare benefits.

• Youth and Women Empowerment – Special schemes to promote employment opportunities for youth and women.

This will create more job opportunities and promote inclusive growth.

Fiscal Outlook: Managing the Economy

• GDP Growth Forecast – The government projects a nominal GDP growth of 10.1% for FY 2025-26.

• Fiscal Deficit Target – Aims to reduce the fiscal deficit to 4.4% of GDP, ensuring financial stability.

This highlights the government's commitment to sustainable economic growth.

Conclusion: A Balanced Budget for Growth and Stability

The Union Budget 2025 strikes a balance between fiscal prudence and economic expansion. By offering tax relief, supporting key industries, and investing in infrastructure, it aims to drive India's growth trajectory forward.

Stay updated for more in-depth analysis on how this budget will shape India's economic future!