Standing up to the general expectation, the Union Budget has raised the income tax exemption limit to Rs 12 lakh per annum under the New Tax Regime.
In a significant move to ease the tax burden on the middle class, the Finance Minster unveiled a major overhaul of the new tax regime, introducing a zero-income tax slab for taxpayers earning up to Rs 12 lakh annually under the new tax regime. This new structure is designed to benefit a large section of the population, especially salaried individuals, by reducing their overall tax liabilities.
Under the revamped regime, taxpayers will not have to pay any income tax on earnings up to Rs 12 lakh per annum. The new rule provides additional relief for salaried individuals, who will benefit from an enhanced Rs 12.75 lakh exemption when considering the standard deduction of Rs 75,000. This shift is expected to have a transformative impact on household incomes, providing a significant boost to savings, consumption, and investments.
The Finance Minister also announced a slew of schemes in her Union Budget 2025 speech to propel economic growth. She started with the announcement that PM Dhan Dhanya Krishi Yojana will be extended to 100 districts.
Additionally, she said that a Makhana Board will be established in Bihar, and a National Mission on high-yield seeds will be launched. A Mission for cotton productivity will also be set in motion, alongside a focus on seafood exports, which are projected to reach Rs 60,000 crore.
The Finance Minister also announced on Saturday a scheme offering Rs 2 crore for first-time women entrepreneurs, Scheduled Castes, and Scheduled Tribes.
For Bihar, the FM announced that the capacity of the Indian Institute of Technology in Patna will be expanded as part of a broader initiative to enhance IITs.
For gig workers, the government will arrange for identity cards and registration of online platform workers on the eshram portal (eshram.gov.in).
While presenting the Union Budget 2025, she also announced the government’s plan to introduce the Income Tax Bill along with multiple tax reforms aimed at maximising returns for all taxpayers. She confirmed that the new Income Tax Bill will be unveiled next week.
Nirmala Sitharaman outlined the core priorities of Budget 2025, emphasizing five key objectives:
a) Driving economic growth
b) Ensuring inclusive development
c) Boosting private sector investment
d) Strengthening household consumption
e) Enhancing the spending power of India's expanding middle class
Finance Minister says Budget aims at 'transformative' reforms in 6 areas including taxation, financial sector, power sector, urban development, mining, regulatory reforms. These domains remain central to the government’s agenda, aiming to stimulate economic expansion, enhance infrastructure, improve governance, and promote sustainable development across multiple sectors.
"This budget is dedicated to accelerating growth, driven by our aspirations for a 'Viksit Bharat.' Our economy remains the fastest growing among all major economies. The Budget 2025-26 continues our government's efforts to secure inclusive development, uplift household sentiment and enhance the power of India's middle class," she added.