According to Nirmala Sitharaman, special allocation is expected in this budget for various sectors like agriculture, health, and education, which will provide relief to the general public and increase employment opportunities.
New Income-Tax Slab
If your annual income is ₹12 lakh, it comes in three different tax slabs. But due to rebate and standard deduction, your final tax liability becomes zero (₹ 0).
How did the tax reduce to zero?
Section 87A exemption: Earlier it was ₹25,000, now it has been increased to ₹60,000, which eliminates the entire tax liability.
Standard Deduction: An exemption of ₹75,000 is also available from salary income. That means, even if your income is ₹12.75 lakh from salary (₹12 lakh + ₹75,000), you will not have to pay any tax.
Budget 2025 Key Highlights Updates
The Union Cabinet had already approved Budget 2025. Finance Minister Nirmala Sitharaman said that the FDI limit in the insurance sector will be increased from 74% to 100%.
New Income-Tax Slab
Now no income tax on income up to ₹12 lakh. The Finance Minister says that the new tax slabs and rates in the new regime will be as follows, which will make income up to ₹12 lakh tax-free, if the person does not have special income (e.g. capital gains).
New Income Tax Slabs Proposed Under New Tax Regime for FY 2025-26 (AY 2026-27)
| Income Tax Slabs (In ₹) | Income Tax Rate (%) |
|---|---|
| Up to 4,00,000 | 0% |
| 4,00,001 – 8,00,000 | 5% |
| 8,00,001 – 12,00,000 | 10% |
| 12,00,001 – 16,00,000 | 15% |
| 16,00,001 – 20,00,000 | 20% |
| 20,00,001 – 24,00,000 | 25% |
| 24,00,001 and above | 30% |
Tariff Rates
After the seven removed in Budget 2023-24, seven additional tariff rates will be phased out. This cut will result in only eight remaining tariff rates, one of which will be set to zero. Duty rates will remain largely unchanged, with only minor cuts for a few select items.
Cess and Surcharges
Cess and Surcharge Amendment: The government plans to impose a maximum of one cess or surcharge on 82 tariff lines, exempting them from social welfare surcharge.
What is Cheap and What is Expensive in the Budget?
Cheap
- 2.5 percent duty on LCD and LED has been removed. With this, phones, laptops, and tablets will become cheaper.
- Discount has been given on lithium batteries, reducing the cost of electric cars, bikes, and mobile phones.
- Custom duty on PCBA parts, camera modules, connectors, raw materials of wired headsets, microphones and receivers, USB cables, fingerprint readers, and mobile phone sensors has been abolished.
- 100 percent investment exemption in the insurance sector may also reduce the insurance premium.
- Textiles and leather products have also become cheaper.
Expensive
- Import duty on interactive display panels (complete build) has been increased from 10 percent to 20 percent. This will make premium smart displays expensive.
Let’s Take a Look at Some Specific Areas Who Have Got Prominence in This Budget
What Did the Farmers Get?
While presenting her budget, Finance Minister Nirmala Sitharaman has increased the loan limit on Kisan Credit Card from ₹3 lakh to ₹5 lakh. This will greatly benefit the farmers in completing the agricultural work on time.
What Did the Females Get?
Finance Minister Nirmala Sitharaman has introduced the Saksham Anganwadi Nutrition 2.0 scheme for women in the budget. Under this, it has been said that the budget will be allocated as per the need.
She has said that 8 crore children will get direct benefits under this scheme. Additionally, more than one crore pregnant women will benefit. Special care has been taken for the nutrition of girls in this scheme.
What Did the Senior Citizens Get?
Finance Minister Nirmala Sitharaman has taken special care of the financial independence of senior citizens in the budget. Under this, tax exemption on interest has been increased to ₹1 lakh. Earlier, it was ₹50,000.
What Did the Youth Get?
Finance Minister Nirmala Sitharaman has also paid attention to the youth working in the unorganized sector. Under this, youth working as gig workers (this includes people doing delivery work) will be given identity cards after registering on the labour portal.
