Union Budget 2025: Key Highlights And Takeaways (Image: X/Bihar_se_hai)

The Union Budget for the financial year 2025-26 was presented by Finance Minister Nirmala Sitharaman, marking her eighth budget and the first one of Prime Minister Narendra Modi-led government’s third term.

The budget aims at “transformative” reforms in six key areas, including taxation, financial sector, power sector, urban development, mining, and regulatory reforms announced in Union Budget 2025.

Taxation Reforms

The main announcement was that no income tax is payable up to Rs 12 lakh under the new regime. A new income tax bill will be announced next week, which will change tax slabs across the board.

Salaried individuals with a salary over Rs 24 lakh will pay 30 per cent tax. The tax return filing limit will also be increased to four years from two years.

• Tax Threshold for Senior Citizens: The tax threshold on interest for senior citizens has been increased to ₹1 lakh, providing relief to this demographic.
•  TDS on Rent: The TDS threshold on rent has been increased from ₹2.4 lakh to ₹6 lakh, reducing the tax burden on renters.
• TCS Exemption for Education Remittances: Tax Collected at Source (TCS) has been exempted for remittances related to education, provided the remittance is funded through a loan from a specified financial institution.
• Higher TDS in Non-PAN Cases: A higher TDS rate will apply only in cases where the taxpayer doesn’t have a Permanent Account Number (PAN).
•  Increased Threshold for TCS under LRS: The threshold for TCS on remittances under the Liberalized Remittance Scheme (LRS) has been increased from ₹7 lakh to ₹10 lakh.

Tariffs and Cess

The government has also proposed to simplify and streamline the customs tariff structure to address duty inversion and promote domestic manufacturing, value addition, and exports.

The customs duty on certain items, such as cobalt powder, lithium-ion battery waste, and critical minerals, has been exempted. Additionally, 37 new medicines and 13 new patient assistance programs will be included in the exemption list.

•  Seven more tariff rates will be eliminated, leaving only eight rates, including a zero rate.
•  Full exemption of Basic Customs Duty (BCD) on cobalt powder, lithium-ion battery waste, scrap, and 12 other critical minerals
• 37 new medicines and 13 new patient assistance programs added to the exemption list
•  Six life-saving medicines to have a concessional customs duty of 5%
• Frozen fish paste from 30% to 5%.
•  Fish hydrolycates from 15% to 5%.
• Open cell and other components for LCDs and LEDs to 5%.
•  No more than one cess or surcharge will be levied, and the social welfare surcharge will be exempt on 82 tariff lines.
•  BCD on wet blue leather will be fully extended.
• Crust leather will be exempt from 20% duty.
•  BCD on interactive flat panel displays will increase from 10% to 20%.

Infrastructure

In the infrastructure sector, the government has announced the creation of a ₹1 lakh crore Urban Challenge Fund to transform cities into growth hubs, support innovative redevelopment, and improve water and sanitation infrastructure.

Each infrastructure ministry will present a three-year list of Public-Private Partnership (PPP) projects, with a focus on three PPP proposals per ministry.

The budget has also allocated ₹1.5 lakh crore in interest-free loans for capital expenditure and offered incentives to encourage reforms. Affordable housing has been given a boost, with another 40,000 units to be completed in FY26. The SWAMI Fund 2 will be established with ₹15,000 crore.

Also, read| Union Budget 2025 Live Updates: No Income Tax Upto Rs 12 Lakh, Says FM Nirmala Sitharaman

Nuclear Energy 

In the nuclear energy sector, the government has introduced a Nuclear Energy Mission to accelerate India’s shift towards clean energy, aiming to develop at least 100 GW of nuclear power by 2047.

Amendments to the Atomic Energy Act and the Civil Liability for Nuclear Damage Act will be made to encourage private sector involvement.

Key Financial Reforms

• FDI in Insurance: Increased from 74% to 100% for firms investing the entire premium in India.
• Central KYC Registry: A revamped registry will be rolled out to improve regulations and keep pace with technological innovations.
•   The government will ensure faster approvals and expand related regulations.
•  A modern, people-friendly, and trust-based regulatory framework will be developed.
• To be introduced in 2025 to encourage competitive cooperative federalism among states.
•  A mechanism will be set up under the Financial Stability and Development Council (FSDC) to evaluate current financial regulations and boost responsiveness and growth in the financial sector.

MSME sector (Micro, Small and Medium Enterprises)

The MSME sector has been given a boost with the introduction of customised credit cards, a fund of funds for startups, and expanded fund-of-funds with a wider scope.

The investment and turnover limits for MSMEs will be enhanced, increasing them by 2.5 times and 2 times, respectively.

Agricultural Sector

Agriculture has been highlighted as a key priority in Budget 2025 with the introduction of a new initiative under the Prime Minister.

The Han Dhanya Krishi Yojana initiative will focus on 100 districts with low productivity, moderate crop intensity, and below-average credit access. An estimated 1.7 crore farmers are expected to benefit from these measures.

The government has also announced a 6-year mission aimed at achieving self-reliance in pulses, with a special focus on tur and masoor. A Makhana Board will be established in Bihar, and the National Mission for Edible Oil & Seeds will be strengthened to reduce dependence on imports.

Also, read| Union Budget 2025 Live: President Murmu Offers ‘Dahi-Cheeni’ To FM Sitharaman

Kisan Credit Cards will continue to support 7.7 crore farmers, fishermen, and dairy farmers with short-term credit access. The loan limit for KCC-backed borrowing will be raised from ₹3,000 to ₹5,000, offering enhanced financial support for agricultural activities.

Healthcare and Social Welfare

37 new medicines and 13 new patient assistance programs to be included in the exemption list. Sashakt Anganwadi and Poshan 2.0 programs provide nutritional support to over 8 crore children and women.

The Finance Minister has announced the addition of 36 life-saving drugs to the list of medicines exempt from customs duty.

Furthermore, the government plans to develop daycare cancer centers in every district, providing easier access to treatment for cancer.

Leather and Footwear Sector

A new scheme will support design, component manufacturing, and machinery for non-leather footwear, alongside leather footwear.

This initiative is expected to create 22 lakh jobs, generate ₹400 crore, and boost exports to over ₹1.1 lakh crore.

The toy sector will also see a new scheme aimed at establishing India as a global hub for toys, focusing on developing clusters, skills, and a sustainable manufacturing ecosystem for high-quality, innovative toys.

Education

• Expansion of IITs: Infrastructure will be expanded in 5 IITs established after 2014 to accommodate 6,500 more students.
•  Atal Tinkering Labs: 50,000 labs will be set up in the next 5 years to cultivate scientific temper in young minds.
• Broadband Connectivity: All government secondary schools and primary healthcare centres will be provided with broadband connectivity.
•  Additional infrastructure will be created in 5 IITs, and IIT Patna will be expanded.
• Bharatiya Bhasha Pushtak Scheme: A digital form of Indian language books will be provided for schools and higher education.
• National Centers for Skilling: 5 centers of excellence for skilling will be set up with global expertise and partnerships.
• Artificial Intelligence Center: A center for excellence in artificial intelligence for education will be set up with a total outlay of ₹500 crores.
• Increase in Medical Seats: 10,000 additional seats will be added in medical colleges and hospitals next year, with 75,000 seats to be added in the next 5 years.

Power
The government wants to improve electricity distribution and transmission. To support states in implementing power sector reforms, the government is offering an additional borrowing allowance of 0.5% of the Gross State Domestic Product (GSDP).

Investing in Common People
The government is focusing on investing in people to boost growth. Prioritising programs that provide nutritional support to children, women, and adolescent girls. Additionally, the government will issue identity cards to gig workers to help them.

Aviation
The UDAN scheme has connected many people to airports and routes. A new version of UDAN will be launched, adding more destinations and accommodating more passengers. New airports will also be developed in Bihar.

Some important numbers:
1. Revised fiscal deficit for FY25: 4.8%
2. Fiscal deficit target for FY26: 4.4%
3. Total receipts for 2024-25: ₹31.47 lakh crore
4. Total expenditure for 2024-25: ₹47.16 lakh crore