Union Budget 2025 Highlights: No Income Tax upto 12 Lakh Rupees

Sakshi Education

Union Budget 2025 Live Updates: FM Nirmala Sitharaman arrives at Parliament to present Budget. Check below the expectations from the Budget 2025.

Nirmala Sitharaman Speech Union Budget 2025 Highlights Finance Minister Nirmala Sitharaman arrives at Parliament for Budget 2025 presentation

Union Budget Live Updates 2025

FM Nirmal Sitharaman's speech is as follows

Going Forward with Viksit Bharat: Aiming for 0% Poverty & Inclusive Growth
The Union Budget focuses on important areas like taxation, power, urban development, mining, the financial sector, and regulatory reforms. These key sectors aim to boost economic growth, improve infrastructure, strengthen governance, and promote sustainable development across the country.

Rupee Comes From

Source of Revenue	Percentage (%)
Borrowing and Other Liabilities	24%
Income Tax	22%
GST & Other Taxes	18%
Corporation Tax	17%
Union Excise Duties	5%
Customs	4%
Non-Tax Receipts	9%
Non-Debt Capital Receipts	1%

Rupee Goes To

Expenditure Category	Percentage (%)
States' Share of Taxes and Duties	22%
Interest Payments	20%
Central Sector Scheme (excluding Defence & Subsidy)	16%
Defence	8%
Major Subsidies	6%
Pensions	4%
Centrally Sponsored Scheme	8%
Finance Commission and Other Transfers	8%
Other Expenditure	8%

Expenditure of Major Items (in ₹ Crore)

Sector	Expenditure (₹ Crore)
Defence	4,91,732
Rural Development	2,66,817
Home Affairs	2,33,211
Agriculture & Allied Activities	1,71,437
Education	1,28,650
Health	98,311
Urban Development	96,777
IT and Telecom	95,298
Energy	81,174
Commerce & Industry	65,553
Social Welfare	60,052
Scientific Departments	55,679

Agriculture Sector

New Agricultural District Programme to Boost Farm Productivity

Launch of Agricultural District Programme: A reform under the Prime Minister Krishi Yojana, modeled after the Aspirational District Programme.
Targeted Districts: 100 districts with low productivity, moderate crop intensity, and below-average credit availability.

Key Objectives:

🌾 Crop Diversification: Enhancing yield and resilience of crops.
🚜 Sustainable Farming Practices: Ensuring long-term soil health.
🏡 Post-Harvest Storage Improvements: At Panchayat and block levels.
💧 Irrigation Expansion: Ensuring water availability for crops.
💰 Easier Access to Credit: Both long-term and short-term credit for farmers.
Expected Impact: Benefiting 1.7 crore farmers, boosting agricultural productivity and rural economy.

Additional Announcements:

Self-Reliance in Pulses: A 6-year mission to make India self-reliant in pulses, focusing on tur and masoor.
Procurement Support: NAFED and NCCF to procure pulses from registered farmers through agreements.
Kisan Credit Card (KCC) Limit: Increased from ₹3 lakh to ₹5 lakh for better financial support to farmers.
Other Initiatives:
- Establishment of Makhana Board in Bihar
- Procurement of Pigeon Peas, Black Gram, and Lentils by the Central Government.
- New Scheme for Fruit and Vegetable Production.
- Special National Mission for High-Yielding Varieties
- Launch of Over 100 High-Yielding Varieties: Starting from July 2024
- National Mission to Enhance Cotton Productivity: Aimed at increasing cotton production across the country
- National Cotton Mission: Focused on long-term goals to benefit cotton farmers and improve production.
- Increased Funding: Additional funds allocated to the Jal Jeevan Mission.
- Impact: The scheme has successfully provided safe drinking water to 15 crore people.

Focus on MSMEs: The Second Engine of Growth

Targeting 5.7 Crore MSMEs: Includes over 1 crore registered businesses, employing 7.5 crore people, and contributing 36% to India's manufacturing sector.
Key Role in India's Global Positioning: MSMEs are crucial in positioning India as a global manufacturing hub, accounting for 45% of the nation's exports.
Government Measures to Boost MSME Growth:
- Investment and Turnover Limits Increased: Limits will be raised by 2.5 times for investment and 2 times for turnover.
- Impact: These changes will empower MSMEs to scale up, innovate, and create more employment opportunities, especially for the youth.

Boosting India's Footwear, Leather, and Toy Sectors

Footwear and Leather Sector Enhancement:
- Policy and Facilitation Measures: To improve productivity, quality, and competitiveness.
- Focused Products Scheme: Supporting design capacity, component manufacturing, and machinery for non-leather quality footwear, alongside leather footwear and products.
- Impact: Expected to create 22 lakh jobs, generate over ₹400 crore, and achieve exports of over ₹1.1 lakh crore.
Toy Sector Growth:
- National Action Plan for Toys: Measures to strengthen the toy sector.
- New Scheme for Global Hub: Aimed at establishing India as a global toy manufacturing hub.
- Focus Areas: Developing clusters, skills, and a manufacturing ecosystem for high-quality, innovative, and sustainable toys, reflecting the "Made in India" brand.

Gig Workers' Health Insurance and Recognition

Recognition Cards for Gig Workers: Issuance of recognition cards for gig workers.
Registration under e-Shram Portal: Gig workers to be registered under the e-Shram portal for better tracking and support.
Health Insurance Coverage: Under the PM Jan Arogya Yojana, health insurance will be provided to gig workers.
Benefit for 1 Crore Gig Workers: The initiative is expected to benefit 1 crore gig workers with health insurance and recognition.

Bihar: Food Processing Initiative

National Institute of Food Technology, Entrepreneurship, and Management: To be established in Bihar to promote food processing activities in the eastern region.
Key Outcomes:
- Enhanced Farmers' Incomes: By adding value to their produce.
- Skilling and Employment: Creating opportunities for youth in entrepreneurship, skill development, and employment.
Focus on Empowering the Poor: Aimed at improving livelihoods and boosting the regional economy.

Loans for States: ₹1.5 Lakh Crore for Capital Expenditure

Interest-Free Loans: ₹1.5 lakh crore allocated for states, with interest-free loans for a period of 50 years.
Purpose: To fund capital expenditure for states.
Incentives for Reforms: States will receive additional incentives if they implement reforms successfully.

Investment as the Third Engine of Growth

Focus on Investing in People: Emphasizing the importance of investing in people, the economy, and innovation.
Sashakt Anganwadi and Poshan 2.0 Programs: Aimed at providing nutritional support to over 8 crore children, pregnant women, lactating mothers, and 20 lakh adolescent girls in aspirational districts and the Northeast region.
Enhanced Cost Norms: The cost norms for these programs will be increased to further strengthen their impact.
Expansion to 120 Additional Routes: The UDAN (Ude Desh ka Aam Naagrik) scheme will be implemented on 120 more routes.
Goal: To provide air travel to 4 crore people over the next 10 years.
Saksham Anganwadi & Poshan 2.0: Strengthening nutrition and early childhood care.
Expansion of IIT Capacity: Increasing seats and research facilities in IITs.
Day Care Cancer Centres: To be established in all district hospitals.
Bharatiya Bhasha Pustak Scheme: Providing Indian language books in digital format for school and higher education.
National Centres of Excellence for Skilling: 5 centres to be set up with global expertise and partnerships.
Atal Tinkering Labs: 50,000 labs to be set up in government schools over the next 5 years.
Centre of Excellence in Artificial Intelligence for Education: ₹500 crore allocated for AI-driven education initiatives.
Broadband Connectivity: To be provided to all government secondary schools and primary health centres in rural areas.
Expansion of Medical Education: 10,000 additional seats planned, with a goal of adding 75,000 seats in the next 5 years.
PM SVANidhi Scheme: To be revamped with enhanced bank loans, UPI-linked credit cards, and capacity-building support.
Welfare of Online Platform Workers: Registration on the e-Shram portal & healthcare under PM Jan Arogya Yojana.

Education & Research

PM Research Fellowship: 10,000 fellowships for technological research in IITs and IISc.
Gene Bank for Crops Germplasm: Second Gene Bank to store 10 lakh germplasm lines for food and nutritional security.
Gyan Bharatam Mission:
- Documentation and conservation of over 1 crore manuscripts.
- Establishment of a National Digital Repository of Indian Knowledge Systems for knowledge sharing.
Research, Development & Innovation: ₹20,000 crore allocated for private sector-driven research and innovation.

Infrastructure & Technology

National Geospatial Mission:
- Development of foundational geospatial infrastructure and data.
- Modernization of land records, urban planning, and infrastructure projects using PM Gati Shakti.

Trade & Export Promotion

Export Promotion Mission:
- Sectoral and ministerial targets for boosting exports.
- Easy access to export credit and cross-border factoring support.
- MSME support to tackle non-tariff measures in overseas markets.
BharatTradeNet (BTN):
- A digital public infrastructure for international trade.
- Unified platform for trade documentation and financing solutions.
- Support for integration with global supply chains.
National Framework for GCC:
- Guidance for states to promote Global Capability Centres (GCCs) in Tier-2 cities.
Warehousing for Air Cargo:
- Upgradation of air cargo infrastructure and warehousing facilities.
- Special focus on high-value perishable horticulture produce.

Sector-Specific Proposals in Budget 2025-26

Make in India & Manufacturing

Tax Exemptions for Key Sectors:
- LED/LCD TV: Exemption on open cell components.
- Textile Industry: Exemption on looms.
- Electronics & EV Industry: Exemption on capital goods for lithium-ion battery production for mobile phones & EVs.

Promotion of MRO (Maintenance, Repair, Overhaul)

Shipbuilding & Shipbreaking: 10-year exemption on goods for shipbuilding and ships used for breaking.
Railway Exports: Extended time limit for exporting railway goods imported for repairs.

Export Promotion & Trade Facilitation

Duty-Free Inputs for Handicraft & Leather Sectors to boost exports.
Provisional Assessment Reforms:
- Fixed time limit for finalization.
- New voluntary declaration system for post-clearance duty payment with interest but without penalty.
IGCR (Import of Goods at Concessional Rate) Rules Amended:
- Time limit extended to 1 year (earlier monthly).
- Quarterly statements instead of monthly filings.

Improved Access to Lifesaving Medicines

Essential Drugs Exemptions:
- 36 lifesaving medicines added to the exempted list.
- 6 medicines added to the 5% concessional duty list.
- 37 additional medicines & 13 new patient assistance programs added to the exemption list.

Atal Tinkering Labs and Digital Learning Initiatives
Establishment of Atal Tinkering Labs: 50,000 government schools will set up Atal Tinkering Labs over the next five years to foster curiosity, innovation, and scientific temper among students.
Broadband Connectivity for Schools: Broadband will be extended to all government secondary and primary schools, ensuring better access to digital learning resources.
Support for Solar, EV, and Battery Industries: Under the CleanTech Mission, there will be incentives for solar, electric vehicle (EV), and battery industries.
National Manufacturing Mission: Aimed at promoting industrial growth by providing incentives and support for various manufacturing sectors.

Expansion of Medical Education and Healthcare Infrastructure

Increase in Medical Seats: Over the past 10 years, nearly 1.1 lakh undergraduate and postgraduate medical seats have been added, marking a 130% increase.
Future Plans:
- Additional 10,000 Seats: 10,000 new seats will be introduced in medical colleges and hospitals in the coming year.
- 75,000 Seats in Five Years: A broader plan to add 75,000 medical seats over the next five years to strengthen healthcare infrastructure.
Relief for Cancer Patients and Those with Rare Diseases
Exemption from Basic Customs Duty: 36 life-saving drugs will be added to the list of medicines fully exempt from basic customs duty to provide relief for cancer patients, those suffering from rare diseases, and chronic conditions.
Concessional Customs Duty: Six life-saving medicines will be added to the list with a concessional customs duty of 5%.
Bulk Drugs Exemption: Full exemption and concessional duty will also apply to bulk drugs used in the manufacturing of these medicines.
Exemption from Basic Customs Duty (BCD): Patient assistance programs run by pharmaceutical companies will be fully exempt from Basic Customs Duty (BCD), provided the medicines are supplied free of cost to the patients.
Inclusion in Exemption List: 37 new medicines and 13 new patient assistance programs will be added to the exemption list.

Enhancing Cancer Care and Urban Livelihoods

Daycare Cancer Centres: The establishment of daycare cancer centres in all district hospitals over the next three years, with 200 centres set to be established in FY 2025-26.
Focus on Urban Livelihoods: Strengthening urban livelihoods by supporting the urban poor and vulnerable groups, with initiatives focused on providing economic stability and employment opportunities.

₹1 Lakh Crore Urban Challenge Fund

Purpose: To drive the transformation of cities into growth hubs, support creative redevelopment, and enhance water and sanitation infrastructure.
Funding Structure:
- The fund will finance up to 25% of the cost of bankable projects.
- At least 50% of the funding must come from bonds, bank loans, or public-private partnerships (PPPs).
Initial Allocation: ₹10,000 crore has been proposed for the fiscal year 2025-26 to kickstart the initiative.

Power Sector Reforms

Focus on Electricity Distribution and Transmission: Key reforms aimed at strengthening electricity distribution and transmission networks.
State Incentives: States will be incentivized to undertake reforms in electricity distribution and enhance intrastate transmission capacity.
Improved Financial Health and Efficiency: The reforms will improve the financial health and operational efficiency of power companies.
Additional Borrowing Allowance: States will be granted an additional borrowing allowance of 0.5% of GSDP, based on their progress in implementing these reforms.

Nuclear Energy Mission for Clean Energy Transition

Goal: Develop at least 100 GW of nuclear power by 2047 to drive India’s clean energy transition.
Private Sector Participation: Amendments will be introduced to the Atomic Energy Act and the Civil Liability for Nuclear Damage Act to facilitate greater private sector involvement.
Research and Development Initiative: A dedicated ₹20,000 crore initiative for Small Modular Reactors (SMRs) will be launched.
Operational SMRs: At least five indigenously developed SMRs are expected to be operational by 2033 as part of this mission.

Increase in FDI in Insurance Sector

FDI Limit Raised to 100%: The Foreign Direct Investment (FDI) limit in the insurance sector will be increased from the current 74% to 100%.
Announcement: Made by Finance Minister Nirmala Sitharaman.

Income Tax Bill to be Introduced Next Week

The Income Tax Bill is scheduled to be introduced in the coming week.

Changes in Cess and Surcharge Structure

One Cess or Surcharge: The government proposes to levy no more than one cess or surcharge on imports.
Exemption on Social Welfare Surcharge: A social welfare surcharge will be exempted on 82 tariff lines, reducing the burden on these items.

Customs Tariff Rate Changes

Removal of Seven Tariff Rates: In addition to the seven rates removed in the 2023-24 Budget, seven more tariff rates will be eliminated.
Remaining Tariff Rates: Only eight tariff rates will remain, including a zero rate.
Duty Incidents: The overall duty incidents will largely be maintained, with only a few items seeing marginal reductions.

Customs Tariff Structure Simplification and Rationalisation

Objective: The government aims to simplify and streamline the customs tariff structure to address duty inversion and promote domestic manufacturing, value addition, and exports.
Comprehensive Review: This rationalisation is part of a broader review of the customs rate structure, as announced in the July 2024 Budget.

Government’s Fiscal Deficit and Budget Estimates

Fiscal Deficit Management: The government aims to manage the fiscal deficit each year to ensure that central government debt remains on a declining trajectory as a percentage of GDP.
Roadmap for the Next Six Years: The fiscal trajectory for the next six years has been outlined in the FRBM (Fiscal Responsibility and Budget Management) statement.

Revised Estimates for 2024-25:

Total Receipts: ₹31.47 lakh crore (excluding borrowings).
Net Tax Receipts: ₹25.57 lakh crore.
Total Expenditure: ₹47.16 lakh crore, which includes ₹10.1 lakh crore for capital expenditure.
Fiscal Deficit: The fiscal deficit for 2024-25 is pegged at 4.8% of GDP.

Investment Friendliness Index and Financial Sector Reforms

Investment Friendliness Index: An index will be launched in 2025 to promote competitive cooperative federalism and assess states' investment climate.
Financial Stability and Development Council (FSDC): A mechanism will be established to assess the impact of existing financial regulations and subsidiary instructions, aiming to enhance the responsiveness and growth of the financial sector.

Business-Friendly Regulatory Environment

Jan Vishwas Act 2023: The Act led to the decriminalization of over 1,080 legal provisions, creating a more business-friendly regulatory environment.

National Framework for Global Capability Centers (GCCs) in Tier-2 Cities

Development of National Framework: A framework will be created to guide states in promoting Global Capability Centers (GCCs) in emerging Tier-2 cities.
Focus Areas: Talent availability, infrastructure upgrades, bylaw reforms, and industry collaboration.

Enhancement of Air Cargo Infrastructure

Improvement in Infrastructure and Warehousing: Special focus on air cargo infrastructure, particularly for high-value perishable horticultural produce.
Streamlined Cargo Screening and Customs Protocols: To improve efficiency and support smoother operations.

Driving Force of Reforms

Reforms as a Key Driver: Finance Minister Nirmala Sitharaman emphasized that reforms have been the cornerstone of the government's policies over the last decade.

TDS Relief for Senior Citizens

Interest Income: The exemption limit on income from interest will be increased from ₹50,000 to ₹1 lakh for senior citizens.
Income from Rent: The exemption limit on income from rent will be raised from ₹2.4 lakh to ₹6 lakh for senior citizens.

Increase in TDS Limit for Rent

TDS Limit on Rent: The annual limit for TDS on rent will be increased from ₹2.4 lakh to ₹6 lakh.
Benefit for Small Taxpayers: This change will reduce the number of transactions liable to TDS, benefiting small taxpayers who receive smaller rent payments.

Income Tax Relief for Salaried Individuals

Income Tax Exemption: Salaried individuals earning up to ₹12.75 lakh per annum will not have to pay income tax.
Here is how the new tax regime will now look like:

Zero to Rs 4,00,000- No Tax
Rs 4,00,000 to Rs 8,00,000---5%
Rs 8,00,0001 to Rs 12,00,000---10%
Rs 12,00,001 to 16 lakh rupees---15%
Rs 16,00,001 to 20 lakh rupees---20%
Rs 20,00,001 to 24 lakh rupees-- 25%
Above 24 lakh---30%

Exemption for Withdrawals from Old National Savings Scheme (NSS) Accounts

Exemption Announcement: Withdrawals made from National Savings Scheme (NSS) accounts by individuals on or after 29th August 2024 will be exempt from tax, particularly for senior and very senior citizens with old NSS accounts, where interest is no longer payable.

Ease of Doing Business & International Taxation

New Scheme for International Transactions:
- Introduction of a 3-year block period for determining the arm's length price in international transactions.
Expansion of Safe Harbour Rules:
- Reducing litigation and ensuring tax certainty in international taxation.

Rationalization of TDS/TCS

TDS (Tax Deducted at Source) & TCS (Tax Collected at Source) reforms to ease compliance and reduce difficulties for taxpayers.

Tax Compliance Reforms

Extended time-limit to file updated returns to 4 years (previously 2 years).
Reduced compliance for small charitable trusts/institutions:
- Registration period extended from 5 years to 10 years.
Taxpayer Relief:
- Can claim annual value for two self-occupied properties (previously only one, with conditions).

Employment & Investment Incentives

Tax Certainty for Electronics Manufacturing Schemes.
Tonnage Tax Scheme: Introduced for inland vessels.
Startups: Extension of incorporation eligibility by 5 years.
Incentives for Global Businesses in IFSC (International Financial Services Centre):
- Tax benefits for ship-leasing units, insurance offices, and treasury centers.
Category I & II AIFs (Alternative Investment Funds):
- Taxation certainty for infrastructure and other investments.