Union Budget for the fiscal year 2025-2026, presented by Finance Minister Nirmala Sitharaman, outlines a comprehensive strategy aimed at stimulating economic growth, enhancing the financial well-being of the middle class, and promoting inclusive development across various sectors. Below are the key highlights of the budget:
1. Taxation Reforms
- Income Tax Relief: The budget introduces significant relief for taxpayers under the new tax regime. Individuals with an annual income up to ₹12 lakh are now exempt from paying income tax. The revised tax slabs are as follows:
- ₹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 and TCS Adjustments: The threshold for Tax Deducted at Source (TDS) on interest income for senior citizens has been increased from ₹50,000 to ₹1 lakh. Additionally, the annual limit for TDS on rent has been raised from ₹2.4 lakh to ₹6 lakh.
- Tax Exemptions: Withdrawals from the National Savings Scheme made on or after August 29, 2024, are now exempt from taxation.
2. Agricultural Initiatives
- Prime Minister Dhan-Dhaanya Krishi Yojana: A new scheme aimed at enhancing agricultural productivity and farmers’ income.
- 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 achieving self-reliance in pulses production, with special emphasis on Tur, Urad, and Masoor varieties.
- Makhana Board Establishment: A dedicated Makhana Board will be set up in Bihar to promote the cultivation and marketing of makhana.
3. Investment in Research and Innovation
- Research, Development, and Innovation Initiative: An allocation of ₹20,000 crore has been made to implement a private sector-driven initiative aimed at fostering research and innovation.
- PM Research Fellowship: The government will provide 10,000 fellowships for technological research in premier institutions like IITs and IISc to encourage innovation.
- Gene Bank for Crop Germplasm: A second gene bank, housing 10 lakh germplasm lines, will be established to ensure future food and nutritional security.
4. Export Promotion Measures
- Incentives for Electronics and Electric Vehicles (EVs): The budget proposes exemptions for components such as open cells used in LED/LCD TVs, looms for textiles, and capital goods for lithium-ion batteries used in mobile phones and electric vehicles.
- Maintenance, Repair, and Overhaul (MRO) Promotion: A 10-year exemption will be granted on goods used for shipbuilding and ships meant for breaking. Additionally, the time limit for the export of railway goods imported for repairs will be extended.
- Trade Facilitation: The budget sets a time limit for the finalization of provisional assessments and introduces a provision allowing for the voluntary declaration of material facts after clearance and duty payment, with interest but without penalty. The Import General Customs Rules (IGCR) have been amended to extend the time limit to one year and allow for the filing of quarterly statements instead of monthly ones.
- Leather Goods: Wet blue leather will be fully exempted from basic customs duties to promote domestic consumption and enhance exports.
5. Fiscal Estimates
- Total Receipts and Expenditure: The total receipts, excluding borrowings, are estimated at ₹34.96 lakh crore, while the total expenditure is projected at ₹50.65 lakh crore.
- Fiscal Deficit: The fiscal deficit is estimated to be 4.4% of GDP, aligning with the government’s commitment to fiscal prudence.
- Capital Expenditure: A capital expenditure of ₹11.21 lakh crore, accounting for 3.1% of GDP, has been earmarked for the fiscal year 2025-26 to boost infrastructure development.
This budget reflects the government’s focus on stimulating economic growth, supporting the middle class, and promoting sustainable development across various sectors.
