The Union Budget for the fiscal year 2025-26, presented by Finance Minister Nirmala Sitharaman on February 1, 2025, introduces several significant measures aimed at stimulating economic growth, providing tax relief, and promoting various sectors.
Key Highlights:
Taxation Reforms:
Income Tax Relief: Under the new tax regime, individuals with annual incomes up to ₹12 lakh are exempt from income tax. For salaried individuals, the inclusion of the standard deduction increases this exemption limit to ₹12.75 lakh.
TDS and TCS Adjustments: The threshold for Tax Deducted at Source (TDS) on interest for senior citizens has been raised from ₹50,000 to ₹1 lakh. Additionally, the annual limit for TDS on rent has been increased from ₹2.4 lakh to ₹6 lakh.
Extended Filing Period: Taxpayers now have up to 48 months from the end of the assessment year to file updated income tax returns, providing greater flexibility.
Agriculture and Rural Development:
Prime Minister Dhan-Dhaanya Krishi Yojana: A new initiative aimed at enhancing agricultural productivity and farmer welfare.
Enhanced Credit Access: The budget proposes facilitating short-term loans of up to ₹5 lakh for approximately 7.7 crore farmers, fishermen, and dairy farmers through the Kisan Credit Card (KCC) scheme.
Pulses Self-Reliance Mission: A six-year mission focusing on increasing the production of pulses, particularly Tur, Urad, and Masoor, to achieve self-sufficiency.
Science, Technology, and Innovation:
Research and Development Allocation: An allocation of ₹20,000 crore has been made to implement a private sector-driven research, development, and innovation initiative.
PM Research Fellowship: The government will provide 10,000 fellowships for technological research in premier institutions like IITs and IISc to foster innovation.
Gene Bank for Crop Germplasm: Establishment of a second gene bank housing 10 lakh germplasm lines to ensure future food and nutritional security.
Export Promotion and Industry Support:
Incentives for Electronics and EVs: Exemptions will be granted for open cells used in LED/LCD TVs, looms for textiles, and capital goods for lithium-ion batteries used in mobile phones and electric vehicles.
Support for Shipbuilding: A 10-year exemption will be granted on goods used for shipbuilding and ships meant for breaking, aiming to boost the maritime industry.
Leather Industry Boost: Wet blue leather will be fully exempted from basic customs duties to promote domestic consumption and enhance exports.
Fiscal Estimates:
Total Expenditure: The government plans to spend ₹50.65 lakh crore in 2025-26, marking a 7.4% increase over the revised estimate of 2024-25.
Fiscal Deficit: The fiscal deficit is estimated to be 4.4% of GDP, aligning with the government's commitment to fiscal prudence.
These measures reflect the government's focus on stimulating economic growth, providing tax relief to individuals, and promoting key sectors such as agriculture, technology, and manufacturing.
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