Finance Minister Nirmala Sitharaman presented the Union Budget 2025-26 on February 1, 2025, which outlines the government’s economic strategy to foster inclusive development, support the middle class, and stimulate growth. In terms of taxes, investments in infrastructure, and social programs, this budget brings about major changes.
Key Highlights of Budget 2025-26
1. Personal Income Tax Reforms
- Increased Tax Exemption: Middle-class families would feel a great sense of comfort as the annual exemption ceiling for individual taxpayers has been increased to ₹12 lakh.
- Tax Cuts: Salaried people may now take advantage of a greater standard deduction of ₹75,000, essentially allowing them to earn up to ₹12.75 lakh tax-free.
- Revised Tax Slabs: The new tax system is designed to make it easier for taxpayers, and it includes revised tax slabs.
New Income Tax Slabs (2025-26)
| Income Bracket (₹) | New Tax Rate (%) |
| 0 – 12 lakh | 0% (Tax-free) |
| 12 – 15 lakh | 5% |
| 15 – 20 lakh | 10% |
| 20 – 30 lakh | 15% |
| 30 – 50 lakh | 20% |
| 50 lakh – 1 crore | 25% |
| Above 1 crore | 30% |
2. Agriculture and Farmers’ Welfare
- Launch of PM Dhan-Dhaanya Krishi Yojana: A new initiative targeting 100 districts with low agricultural productivity to benefit approximately 1.7 crore farmers.
- Increased Credit Support: The subsidized credit limit for farmers has been raised to ensure better access to financial resources for agriculture.
- Investment in Irrigation: New irrigation projects have been sanctioned to ensure better water management in drought-prone areas.
3. Boost for MSMEs (Micro, Small & Medium Enterprises)
- Enhanced Credit Support: Small and Medium Enterprises (SMEs) now have easier access to loans and other forms of financial assistance because to increased funding for this purpose.
- Simplified Compliance Regulations: To facilitate the expansion of minor enterprises, the government has simplified the GST filing and compliance procedures.
- Programs for Skill Development: The implementation of vocational training programs to provide MSME workers with advanced skills.
Budget 2025-26 Summary Table
| Category | Details |
| Personal Income Tax | Exemption limit raised to ₹12 lakh per annum |
| Standard Deduction | ₹75,000 for salaried individuals |
| MSME Support | Increased credit support for small businesses |
| Infrastructure Investment | High allocation for roads, railways, and energy |
| Manufacturing Boost | National Manufacturing Mission launched |
| Agriculture Support | PM Dhan-Dhaanya Krishi Yojana for 1.7 Cr farmers |
| Fiscal Deficit Target | Reduced to 4.4% of GDP |
| Social Welfare | Special funds for SC/ST, OBCs, and minorities |
4. Infrastructure Development and Investments
- National Manufacturing Mission: Providing incentives and subsidies, the National Manufacturing Mission is a significant initiative to establish India as a global manufacturing centre.
- Infrastructure Development: Significant investments in metro initiatives, railways, and national highways to enhance connectivity.
- Renewable Energy Focus: Enhanced financing for solar and wind energy initiatives to achieve sustainability objectives: Renewable Energy Focus.
5. Social Welfare and Inclusive Growth
- Allotment of Special Funds to Support Marginalized Communities: Minorities, Scheduled Castes, Scheduled Tribes, and Other Backward Classes fight for social fairness.
- Health and Education: The establishment of 200 new medical colleges and the expansion of the Ayushman Bharat scheme to include a broader range of beneficiaries.
- Universal Housing: Implementation of affordable housing programs for impoverished urban and rural populations.
6. Fiscal Management and Economic Outlook
- Fiscal Deficit Objective: For the next fiscal year, the government plans to keep the deficit below 4.4% of GDP.
- FDI (Foreign Direct Investment): Strategies to attract foreign investments in critical sectors such as pharmaceuticals, renewable energy, and information technology.
- Impact on Stock Markets: Key indexes have been trending upwards since the budget release, indicating a positive market reaction.
Reactions to Budget 2025-26
Economic experts and political leaders have expressed conflicting opinions regarding the budget. There has been a lot of praise for tax cuts and infrastructure improvements, but others say the government can’t afford some of the more ambitious plans.
Conclusion
The Union Budget 2025–26 aims to foster social development, budgetary discipline, and economic progress in a balanced manner. Improving the quality of life for all residents is the goal, along with bolstering economic confidence via infrastructure improvements, farmer-friendly policies, and substantial tax reliefs.