Union Budget 2025

India’s Finance Minister, Nirmala Sitharaman presented the Union Budget 2025 on February 1, 2025, for FY 2025-26. The budget highlights the government’s financial plan to boost economic growth with a focus on agriculture and rural development, taxation ease for the middle class, focus on education and technology, increase in the FDI limit for life insurance companies, and much more. 

Key Highlights of Union Budget 2025

Let’s deep dive into the key highlights and announcements in Union Budget 2025 to understand how it can shape India’s economy.

1. Boost to India’s Agriculture Economy

   • A new agriculture scheme "Prime Minister Dhan Dhaanya Krishi Yojana" has been introduced to boost agriculture productivity by providing storage, irrigation, and credit facilities to over 1.7 crore farmers.
   • The credit limit under KCC (Kisan Credit Cards) has been raised from Rs 3 lakhs to Rs 5 lakhs for farmers, fishermen, and dairy farmers.
   • Establishment of a Makhana Board in Bihar to improve the production, processing, distribution, and marketing of makhana (foxnuts, a globally loved superfood!).

2. New Tax Reforms

   • The income tax exemption threshold has been raised from Rs 7 lakhs to Rs 12 lakhs which is a major relief for India’s middle class in Union Budget 2025. To understand the tax rates and slabs refer to the table below.

     Existing Tax Regime		New Tax Regime
     Taxable Income (Rs)	Tax Rate	Taxable Income (Rs)	Tax Rate
     Up to Rs 3,00,000	0%	Up to Rs 4,00,000	0%
     3,00,001- 7,00,000	5%	4,00,001- 8,00,000	5%
     700,001- 10,00,000	10%	800,001- 12,000,000	10%
     10,00,001- 12,00,000	15%	12,00,0001- 16,00,000	15%
     12,00,001- 15,00,000	20%	16,00,001- 20,00,000	20%
     Above 15,00,000	30%	20,00,001 - 24,00,000	25%
     Above 24,00,000	30%

   • The TDS (tax deducted at source) limit for senior citizens has been increased from Rs 50,000 to Rs 1,00,000 in this budget.
   • TCS (tax collected at source) has been removed on remittances received for higher education helping students to easily pursue higher education.

3. Measures to Improve Infrastructure Development

   • Initiatives such as the National Infrastructure Pipeline (NIP) and the National Monetisation Pipeline (NMP) have focused on railways, roads, and connectivity.
   • There is an increased allocation of funds for the modernisation of cities through technology and transport in the Union Budget 2025.

4. Education and Healthcare

   • Medical colleges are to add 10,000 new medical seats and hospitals are to add 75,000 new seats in the coming years.
   • Funds of Rs 500 crore have been allocated for the Centre of Excellence in Artificial Intelligence to support research and growth.
   • Funding has been increased for the skill development of youths in areas such as AI, data analytics, and clean energy in India Budget 2025.

5. Boost to Entrepreneurship and MSMEs

   • The government will launch more schemes to offer easy and low-interest credit to small and medium-sized businesses in India.
   • Increase in collateral-free loans to MSMEs under the Credit Guarantee Trust for Micro and Small Enterprises (CGTMSE).

6. Financial Sector

   • The FDI limit in the insurance sector has been enhanced from 74% to 100% in the Union Budget 2025. It is applicable for the insurance companies that have been investing 100% of the collected premiums in India.
   • A new system for KYC (Know Your Customer) has been introduced to simplify the process.
   • If the total premiums for ULIPs exceed Rs 2.5 lakhs per annum or 10% of the sum assured, the gain on maturity will be treated under the capital gain tax.

7. Development of the Renewable Sector

   • In Union Budget 2025, the government has allocated a significant amount of funds for green energy including solar, wind, and green hydrogen projects.
   • Nuclear Energy Mission has been launched to develop 100 gigawatts of nuclear power by 2047.

Conclusion: Union Budget 2025

The Union Budget 2025 provides the government’s detailed roadmap for India’s economic growth and prosperity. It focuses on sustainable growth of the economy rather than fast-paced growth. The budget has a special focus on the growth of the agriculture sector, financial sector, renewable energy sector, and MSME sector.

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