Union Budget 2025-26 Highlights, No Income Tax Up To ₹12 Lakh

Union Budget 2025-26 highlights were released by the Press Information Bureau (PIB). Finance Minister Nirmala Sitharaman presented the budget for 2025-26 on Feb 1, 2025, and made major announcements. Check below.

Union Budget 2025-26 Highlights: The Union Budget 2025-26 was presented by Finance Minister Nirmala Sitharaman on February 1, 2025. This budget includes several key announcements designed to promote economic growth and national development. Major highlights often include investments in infrastructure, healthcare, education, and agriculture.

Furthermore, the budget includes tax reforms, which may include changes to personal income tax exemptions and adjustments to customs duties aimed at rationalising taxes. These measures are typically designed to strengthen the economy, increase employment opportunities, and improve the financial security of the citizens.

The Union Budget 2025-26 is an essential financial roadmap, that influences various sectors of the economy. Check below for more details on the Union Budget 2025-26 highlights to better understand the government’s key proposals.

Table of Contents

Highlights of Union Budget 2025-26

Union Finance Minister Nirmala Sitharaman presented the Union Budget 2025-26 on February 1, 2025. The budget introduced several key proposals aimed at shaping India’s economic future. One of the major announcements was the no income tax up to ₹12 lakh, which provides significant relief to the middle class.

Union Budget 2025-26 Highlights also focus on important areas like tax reforms, investment in infrastructure, and boosting digitalisation and social welfare. These changes aim to promote growth, inclusivity, and sustainability in India’s economy.

Key budget figures include

Total Receipts: ₹34.96 lakh crore (excluding borrowings).
Total Expenditure: ₹50.65 lakh crore (estimated).
Net Tax Receipts: ₹28.37 lakh crore (projected).
Fiscal Deficit: Estimated at 4.4% of GDP (estimated).
Capital Expenditure (Capex): ₹11.21 lakh crore (3.1% of GDP) allocated for FY 2025-26.

Union Budget 2025-26 Highlights PDF Download

Union Budget 2025-26 Highlights include important plans to help the economy grow, simplify taxes, and support various industries. It focuses on giving tax relief to individuals, making tax rules easier to understand, and helping key sectors like infrastructure and exports. There are also new measures to help small businesses and create more jobs. To learn more about the details, you can download the full Union Budget 2025-26 Highlights PDF released by the government

Click Here to Download Union Budget 2025-26 Highlights PDF Download

Union Budget 2025-26 Highlights Released

Union Budget 2025-26 highlights were released by the Press Information Bureau (PIB) Delhi on the official website pib.gov.in. The budget is divided into two parts, outlining comprehensive plans for development across key sectors. Here are the key points in Union Budget 2025-26 Highlights:

Union Budget 2025-26 Highlights- PART A

Part A of the Union Budget 2025-26 highlights focuses on key areas that are expected to drive India’s growth, with a particular emphasis on agriculture, MSMEs, and rural prosperity. These measures aim to enhance productivity, ensure sustainability, and improve the livelihoods of millions of Indians.

Agriculture as the 1st Engine of Development

The government continues to prioritise agriculture as a central pillar of India’s development. This section highlights the government’s focus on increasing agricultural productivity, ensuring farmers’ welfare, and strengthening rural economies.

Prime Minister Dhan-Dhaanya Krishi Yojana – Developing Agri Districts Programme
A new initiative will focus on 100 districts with low agricultural productivity, aiming to improve farming conditions and benefit 1.7 crore farmers. This program will be launched in partnership with states.
Building Rural Prosperity and Resilience
A multi-sectoral approach will address under-employment in agriculture by focusing on skills, investments, technology, and rural economic revival, beginning with 100 agri-districts.
Aatmanirbharta in Pulses
The government will launch a 6-year mission to increase domestic production of pulses, focusing on Tur, Urad, and Masoor, with procurement support from NAFED and NCCF.
Comprehensive Programme for Vegetables & Fruits
A partnership with states to improve the production, processing, and marketing of vegetables and fruits will ensure better prices for farmers.
Makhana Board in Bihar
A dedicated Makhana Board will be set up to enhance production and market reach for Makhana in Bihar.
National Mission on High-Yielding Seeds
A mission to boost high-yield seed varieties, strengthen research ecosystems, and ensure the availability of over 100 types of seeds will be launched.
Fisheries and Cotton Productivity Missions
Sustainable fisheries practices will be introduced, with a special focus on Andaman & Nicobar and Lakshadweep. Additionally, a 5-year mission will enhance cotton farming productivity.
Enhanced Credit through KCC
The Kisan Credit Card (KCC) scheme will now offer loan limits of up to ₹5 lakh, up from ₹3 lakh, enabling farmers to access higher credit for agricultural needs.
Urea Plant in Assam: A plant with an annual capacity of 12.7 lakh metric tons is to be set up at Namrup, Assam.

MSMEs as the 2nd Engine of Development

Micro, Small, and Medium Enterprises (MSMEs) play a crucial role in driving India’s economic growth. The government aims to strengthen the MSME sector by increasing access to finance, simplifying regulations, and fostering entrepreneurship.

Revision in Classification Criteria for MSMEs
The classification limits for MSMEs will be enhanced, doubling the investment and turnover thresholds.
Credit Cards for Micro Enterprises
Micro-enterprises registered on the Udyam portal will be issued customised credit cards with a ₹5 lakh limit, starting with 10 lakh cards in the first year.
Fund of Funds for Startups
A new Fund of Funds will be set up with ₹10,000 crore to support startup growth and innovation.
Scheme for First-time Entrepreneurs
A scheme to offer loans up to ₹2 crore to women, SC/ST entrepreneurs starting their businesses will support 5 lakh first-time entrepreneurs over 5 years.
Focus on Product Scheme for Footwear & Leather Sectors
A new scheme will focus on improving India’s footwear and leather industries, creating jobs for 22 lakh people and boosting exports.
Measures for the Toy Sector

A scheme to create high-quality, unique, innovative, and sustainable toys, making India a global hub for toys, has been announced.

Support for Food Processing
A National Institute of Food Technology, Entrepreneurship, and Management will be set up in Bihar to support food processing ventures.
Manufacturing Mission
A National Manufacturing Mission will be launched to strengthen India’s manufacturing sectors, furthering the “Make in India” initiative.

Investment as the 3rd Engine of Development

A major emphasis has been placed on investment, both in people and in the economy. The government is prioritising education, healthcare, infrastructure, and innovation to propel India’s economic transformation.

Investing in People

Investing in people by enhancing education, healthcare, and skill development is a key strategy to drive growth.

Saksham Anganwadi and Poshan 2.0: Cost norms for nutritional support will be enhanced to improve nutrition in rural areas.
Atal Tinkering Labs: 50,000 Atal Tinkering Labs will be established in government schools over the next 5 years to promote innovation and creativity.
Centre of Excellence in AI for Education: A ₹500 crore Centre of Excellence in AI for Education will be created.
Broadband Connectivity to Government Schools and PHCs: Broadband will be provided to all government secondary schools and primary health centers in rural areas under the BharatNet project.
Day Care Cancer Centres in District Hospitals: Day Care Cancer Centres will be set up in all district hospitals, with 200 centres operational by 2025-26.
Bharatiya Bhasha Pustak Scheme: Indian language digital books will be provided for school and higher education to make learning more accessible.
Expansion of Capacity in IITs: Infrastructure will be expanded in five IITs to accommodate 6,500 additional students.
Expansion of Medical Education: 10,000 additional medical seats will be added, increasing the total number by 75,000 over the next 5 years.
National Centres of Excellence for Skilling: Five National Centres of Excellence will be established to skill youth for India’s manufacturing sector.
Strengthening Urban Livelihoods: A scheme will support socio-economic upliftment of urban workers for improved incomes and sustainable livelihoods.
PM SVANidhi: The PM SVANidhi scheme will be revamped with enhanced loans, UPI-linked credit cards with a ₹30,000 limit, and capacity building for street vendors.
Social Security Scheme for Online Platform Workers: Gig workers will receive identity cards, registration on the e-Shram portal, and healthcare under PM Jan Arogya Yojana.

Investing in the Economy

Strategic investments in infrastructure, public-private partnerships, and sectoral reforms will accelerate India’s economic growth.

Public Private Partnership in Infrastructure: Infrastructure ministries will develop a 3-year project pipeline under a public-private partnership model, with states encouraged to participate.
Asset Monetisation Plan 2025-30: A second asset monetisation plan aims to generate ₹10 lakh crore for new projects from 2025 to 2030.
Support to States for Infrastructure: ₹1.5 lakh crore has been allocated for interest-free loans to states for capital expenditure.
Nuclear Energy Mission for Viksit Bharat: Amendments to the Atomic Energy Act will set up a mission for Small Modular Reactors with a ₹20,000 crore outlay
UDAN – Regional Connectivity Scheme: The UDAN scheme will be expanded to enhance regional connectivity to 120 new destinations.
Mining Sector Reforms: A policy to recover critical minerals from tailings will be introduced to improve mining efficiency.
Jal Jeevan Mission: The Jal Jeevan Mission will be extended until 2028 with additional funding to provide water to rural households.
Urban Challenge Fund: A ₹1 lakh crore Urban Challenge Fund will be established to transform cities into growth hubs.
Shipbuilding and Maritime Development: The Shipbuilding Financial Assistance Policy will be revamped, and a ₹25,000 crore Maritime Development Fund will be created.
Greenfield Airport in Bihar: A Greenfield airport will be built in Bihar, along with the expansion of Patna and Bihta airports.
Tourism for Employment-led Growth: The government will develop the top 50 tourist destinations in collaboration with states to boost employment.
SWAMIH Fund 2: A ₹15,000 crore fund will support the completion of 1 lakh dwelling units over the next 5 years.

Investing in Innovation

A robust innovation ecosystem is being nurtured to drive India’s future growth.

Research, Development, and Innovation: ₹20,000 crore will be allocated to private sector-driven research initiatives.
Deep Tech Fund of Funds: The government will explore a fund to catalyze next-generation startups in deep technology.
PM Research Fellowship: 10,000 fellowships will be provided for research in IITs and IISc, with enhanced financial support.
Gene Bank for Crops Germplasm: A second Gene Bank will be set up for crop germplasm preservation, ensuring food and nutritional security.
National Geospatial Mission: A National Geospatial Mission will be launched to develop foundational geospatial infrastructure.
Gyan Bharatam Mission: A mission to document and conserve India’s manuscript heritage will be undertaken, covering over 1 crore manuscripts.

EXPORTS AS THE 4TH ENGINE OF DEVELOPMENT

To further propel economic growth, exports are being focused on as a key engine for development.

BharatTradeNet (BTN): A unified platform, BharatTradeNet, will be established to streamline trade documentation and financing solutions for international trade.
Export Promotion Mission: A new mission will be set up to promote exports with specific sectoral and ministerial targets, driven by the Ministries of Commerce, MSME, and Finance.
National Framework for GCC: A national framework will be developed to guide states in promoting Global Capability Centres (GCC) in emerging Tier 2 cities.

REFORMS AS FUEL: FINANCIAL SECTOR REFORMS AND DEVELOPMENT

Financial sector reforms are critical for sustained development, ensuring growth, competitiveness, and better access to capital.

FDI in Insurance Sector: The FDI limit for the insurance sector will be increased from 74% to 100% for companies that invest the entire premium in India.
Credit Enhancement Facility by NaBFID: NaBFID will set up a “Partial Credit Enhancement Facility” to enhance corporate bonds for infrastructure projects.
Grameen Credit Score: Public Sector Banks will develop a “Grameen Credit Score” to meet the credit needs of SHG members and people in rural areas.
Pension Sector: A forum will be created for regulatory coordination and the development of pension products.
High-Level Committee for Regulatory Reforms: A High-Level Committee will be formed to review all non-financial sector regulations, certifications, licenses, and permissions.
Investment Friendliness Index of States: A new “Investment Friendliness Index” will be launched in 2025 to enhance competitive cooperative federalism.
Jan Vishwas Bill 2.0: The Jan Vishwas Bill 2.0 will decriminalize over 100 provisions across various laws.

Union Budget 2025-26 Highlights- PART B

Part B of the Union Budget 2025-26 highlights focuses on key tax reforms and measures that are aimed at simplifying the tax structure, enhancing investment, and fostering economic growth. This includes changes to direct taxes, indirect taxes, and measures for ease of doing business.

Direct Tax

The direct tax proposals in the budget are designed to provide relief to taxpayers, simplify the taxation system, and boost economic activity.

Income Tax Relief for Individuals

No personal income tax payable up to an income of ₹12 lakh (i.e., average income of ₹1 lakh per month), excluding special rate income such as capital gains, under the new regime.
The limit will be ₹12.75 lakh for salaried taxpayers due to the standard deduction of ₹75,000.
This new structure substantially reduces taxes for the middle class and increases disposable income, which is expected to boost household consumption, savings, and investments.
A new Income Tax Bill will be introduced, making the tax code simpler and more understandable, ensuring clarity for taxpayers and the tax administration, and reducing litigation.
The revenue foregone from these changes is approximately ₹1 lakh crore in direct taxes.

Revised Tax Rate Structure
The revised tax rate structure under the new regime will be as follows:

Revised Tax Rate Structure
Income Range	Tax Rate
₹0 – ₹4 lakh	Nil
₹4 lakh – ₹8 lakh	5%
₹8 lakh – ₹12 lakh	10%
₹12 lakh – ₹16 lakh	15%
₹16 lakh – ₹20 lakh	20%
₹20 lakh – ₹24 lakh	25%
Above ₹24 lakh	30%

TDS/TCS Rationalisation for Easing Difficulties:

The number of TDS rates and thresholds will be reduced to simplify compliance.
TDS limit on interest for senior citizens will be increased from ₹50,000 to ₹1 lakh.
TDS threshold on rent payments will rise from ₹2.40 lakh to ₹6 lakh.
TCS threshold on remittances under RBI’s Liberalised Remittance Scheme (LRS) will increase from ₹7 lakh to ₹10 lakh.
Higher TDS deductions will apply only in non-PAN cases.
Delays in TCS payments up to the due date will be decriminalised.

Reducing Compliance Burden:

The registration period for small charitable trusts will be extended from 5 years to 10 years.
The benefit for claiming the annual value of self-occupied properties as nil will be extended to two self-occupied properties without conditions.

Ease of Doing Business:

A scheme will be introduced for determining arm’s length prices for international transactions over a block period of three years.
Safe harbor rules will be expanded to reduce litigation and provide certainty in international taxation.
Withdrawals from the National Savings Scheme (NSS) after 29th August 2024 will be tax-exempt.
NPS Vatsalya accounts will receive similar tax treatment as regular NPS accounts.

Employment and Investment:

Electronics Manufacturing: A presumptive taxation regime will be introduced for non-residents providing services to electronics manufacturing facilities.
Tonnage Tax for Inland Vessels: The tonnage tax scheme will be extended to inland vessels under the Indian Vessels Act, 2021.
Start-Up Benefits: The period for incorporating start-ups to avail tax benefits will be extended by 5 years (until 1st April 2030).
Alternate Investment Funds (AIFs): Tax certainty will be introduced for Category I and II AIFs investing in infrastructure sectors.
Sovereign and Pension Funds: The investment deadline for Sovereign Wealth Funds and Pension Funds in the infrastructure sector is extended to 31st March 2030.

Indirect Tax

Indirect tax measures in the Union Budget focus on rationalising the customs tariff structure, providing relief to key sectors, and promoting exports.

Rationalisation of Customs Tariff Structure for Industrial Goods:

Seven tariff rates will be removed, reducing the total to eight rates, including the zero rate.
Cess will be applied to maintain duty incidence, with some reductions on certain items.
Social Welfare Surcharge on 82 tariff lines subject to a cess will be exempted.
Revenue loss due to these changes is estimated at ₹2,600 crore.

Relief on Import of Drugs/Medicines:

36 lifesaving drugs and medicines will be fully exempt from Basic Customs Duty (BCD).
6 lifesaving medicines will have a concessional BCD of 5%.
Medicines under Patient Assistance Programmes will be fully exempt, with 37 more medicines added.

Support to Domestic Manufacturing and Value Addition:

Critical Minerals: Cobalt powder, lithium-ion battery scrap, lead, zinc, and other critical minerals will be fully exempt from BCD.
Textiles: Two more types of shuttle-less looms will be exempt from BCD; BCD on knitted fabrics revised.
Electronic Goods: BCD on Interactive Flat Panel Displays will rise from 10% to 20%, while BCD on Open Cells will be reduced to 5%, and parts will be exempt.
Lithium Ion Battery: 35 capital goods for EV battery manufacturing and 28 for mobile phone battery manufacturing will be exempt from BCD.
Shipping Sector: BCD exemption on raw materials and components for ship manufacturing extended for another 10 years; shipbreaking to benefit similarly.
Telecommunication: BCD on Carrier Grade Ethernet switches will be reduced from 20% to 10%.

Export Promotion:

Handicraft Goods: Export time extended from six months to one year, with a further extension of three months; nine items added to the duty-free input list.
Leather Sector: BCD on Wet Blue leather fully exempted; Crust leather exempt from 20% export duty.
Marine Products: BCD on Frozen Fish Paste (Surimi) reduced from 30% to 5%, and on fish hydrolysate for shrimp and fish feeds reduced from 15% to 5%.
Domestic MROs for Railway Goods: Railway MROs will benefit from the same import repair item dispensation as aircraft and ship MROs.

Trade Facilitation:

Provisional Assessment: Time limit for finalising provisional assessments set at two years, extendable by one year.
Voluntary Compliance: Importers/exporters can voluntarily declare material facts, pay duties with interest, but no penalty.
Extended Time for End Use: The time limit for the end-use of imported inputs is extended from six months to one year; quarterly statements are allowed instead of monthly.

Union Budget 2025-26 Highlights FAQs

What is the new tax slab for 2025-26?

The new tax slab introduces no income tax for income up to ₹12 lakh, with progressive rates from 5% to 30% for higher income ranges.

What are the highlights of the Union Budget?

The budget prioritizes growth in agriculture, MSMEs, and innovation, with major reforms in tax, healthcare, education, and infrastructure to promote economic development.

How does the Union Budget impact the economy?

The budget aims to boost economic growth by enhancing tax relief, investing in infrastructure, and promoting innovation, which is expected to create jobs, increase consumption, and support sustainable development.

What is the total budget of India in 2025?

The total budget of India for 2025-26 includes total receipts of ₹34.96 lakh crore and total expenditure of ₹50.65 lakh crore, with a projected fiscal deficit of 4.4% of GDP.