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Budget 2025: Highlights, Tax Updates & Major Changes
The much-awaited Budget 2025 has been announced, bringing significant reforms in taxation, infrastructure, social welfare, and economic growth. Whether you're a taxpayer, business owner, or investor, this breakdown of Budget 2025 highlights and important updates will help you understand its impact in simple terms.
Budget 2025
The Union Budget is the Indian government’s financial plan for the year, detailing revenue and expenditure. Budget 2025 is designed around the vision of “Viksit Bharat” (Developed India), with a focus on:
- Strengthening agriculture and MSMEs
- Boosting infrastructure and digital innovation
- Enhancing healthcare and education
- Simplifying tax structures for individuals and businesses
Let’s dive into the major updates.
Budget 2025 Highlights: What’s New?
1. Agriculture & Rural Development
- PM Dhan-Dhaanya Krishi Yojana: Targets 100 districts to help 1.7 crore farmers.
- Enhanced Kisan Credit Card (KCC) Loans: ₹5 lakh short-term loans for farmers, fishermen, and dairy farmers.
- Mission for Cotton & Pulses: A five-year plan to improve production.
- India Post as Rural Hubs: Banking and digital services in villages.
- Makhana Board in Bihar : To be set up to improve production, processing, value addition, and marketing and organisation of FPOs.
2. MSMEs & Entrepreneurship
- Udyam Credit Cards: ₹5 lakh limit for micro-enterprises.
- Support for Startups: Easier loans for first-time entrepreneurs, especially women and SC/ST groups., a new scheme, to be launched, to provide term loans up to ₹ 2 crore during the next 5 years.
- Labour-Intensive Sectors: Focus on footwear, leather, toys, and food processing to create 22 lakh jobs.
Revision in classification criteria for MSMEs
- Micro Enterprises - Turnover 10 Crore
- Small Enterprises - Turnover 100 Crore
- Medium Enterprises - Turnover 500 Crore.
3. Social Welfare, Education & Healthcare
- Saksham Anganwadi & Poshan 2.0: Strengthened nutrition programs.
- 50,000 Atal Tinkering Labs: Encouraging innovation in schools.
- Medical Education Expansion: 75,000 new seats in five years.
- Day Care Cancer Centers: To be set up in all district hospitals.
- Gig Worker Welfare: PM Jan Arogya Yojana coverage for gig workers.
4. Infrastructure & Digital Innovation
- ₹1.5 Lakh Crore for States: 50-year interest-free loans for infrastructure.
- Jal Jeevan Mission Extended: 100% tap water coverage by 2028.
- AI in Education: ₹500 crore allocated for a Centre of Excellence.
- Nuclear Energy Mission: Private sector partnerships for clean energy.
Budget 2025 Income Tax Update
The budget introduces significant income tax changes aimed at reducing the tax burden on individuals.
New Tax Slabs FY 2025-26 (Under the New Regime)
| Income Range (₹) | 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% |
✅ Key Tax Benefits:
- Income up to ₹12 lakh is tax-free.
- TDS Limit on rent increased from ₹2.4 lakh to ₹6 lakh per year.
- Tax deduction for seniors doubled to ₹1 lakh.
- Two self-occupied properties can now claim tax benefits.
- Tax benefits for startups extended for another five years.
Budget 2025 for Indirect Tax & GST
The government has introduced important GST and indirect tax updates to boost local businesses and exports.
GST & Customs Duty Changes
- Customs Duty Simplified: Fewer tariff rates for easier compliance.
- Make in India Boost: Duty exemptions for LED TVs, textiles, and EV batteries.
- Healthcare Relief: 36 life-saving drugs exempted from customs duty.
- GST Compliance Eased: Simplified return filing for small businesses.
Where Does the Government’s Money Come From & Go?
Revenue Sources
- Income Tax: 22%
- Borrowing and Other Liabilities: 24%
- GST: 18%
- Corporation Tax: 17%
- Non-Tax Receipts : 9%
- Union Excise Duties: 5%
- Excise & Customs: 4%
- Non-Debt Capital Receipts: 1%
Major Expenditures
- Defence: ₹4.9 lakh Crore
- Rural Development: ₹2.6 lakh Crore
- Healthcare: ₹98,311 Crore
- Education: ₹1,28,650 Crore
Fiscal Deficit Target: Reduced to 4.4% of GDP (indicating better financial management).
FAQs: Budget 2025
1. What are the key tax changes in Budget 2025?
The budget introduces new income tax slabs, increasing tax-free income to ₹12 lakh and doubling the tax deduction for seniors.
2. How does Budget 2025 impact businesses?
- MSMEs get higher credit limits and easier loans.
- Startups receive extended tax benefits and compliance simplifications.
- Labour-intensive sectors (leather, textiles, etc.) will create new jobs.
3. What are the major GST updates in Budget 2025?
- Customs duty simplified with fewer tax brackets.
- GST return filing is easier for small businesses.
- Duty exemptions on key manufacturing materials support Make in India.
4. Is there any benefit for salaried employees?
Yes! Salaried individuals get:
- Higher tax-free income up to ₹12 lakh
- Increased TDS limit on rent
- Two self-occupied properties can claim tax benefits
5. How will this budget impact the Indian economy?
- Boosts infrastructure, agriculture, and MSMEs.
- Encourages foreign investment and startup growth.
- Aims for a stronger rupee and reduced fiscal deficit.
Conclusion
Budget 2025 focuses on tax relief, economic growth, and job creation. The government’s vision of "Viksit Bharat" is reflected in its investment in infrastructure, MSMEs, and digital innovation.
For individuals, the new tax structure provides significant savings, while businesses benefit from simplified GST and loan schemes.
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