Union Budget 2025: Key takeaways in 5 Minutes!

The 8th consecutive budget meeting held on 1st February, Saturday which was chaired by Union Finance Minister, Nirmala Sitharaman witnessed key announcements for the middle class, under privileged, farmers, businesses, and more. 

Check out the key highlights! 

Indirect Tax Reforms in Union Budget 2025 

1. Simplified Tax Slabs: 

New tax slabs and rates formed the heart of union budget meetings ensuring easier tax payments for the middle class. This direct tax proposal consists of income tax reform emphasizing on the middle class, TDS/TCS rationalization, elimination of tax burden, and incentivizing employment and investment. 

Let’s check new Income tax slab: 

Tax Slabs	Tax Rates
up to ₹4,00,000	NIL
₹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%
Above ₹24,00,000	30%

The budget meeting highlighted revised tax rates for the financial year 2025-26. This catered to zero tax on income up to ₹12LPA, for taxpayers opting for a new tax regime. This is due to a rebate of Rs. 60,000, which is applicable to the new regime. Taxpayers can claim  deductions on their taxable income to exempt from paying taxes.

Here’s how it works:

TAX SLAB	TAX SLABS AND RATES		BENEFIT OF	REBATE BENEFIT	Total Benefit	TAX AFTER REBATE BENEFIT
	Present	Proposed
12LPA	80,000	60,000	20,000	60,000	80,000	0

2. Strategic Tax Incentives to Boost Green Investment

India’s commitment to green initiatives and its mission to battle climate change has raised the demand for green hydrogen projects. Union Budget 2025 pegged tax incentives on investments in green technologies, renewable energies, and electric vehicles. FM, Nirmala Sitharaman announced allocation of ₹26,549 crore to the New and Renewable Energy Ministry. This was 53.5% more than the previous allocation of ₹17,298 crore.

3. Simplified Business Taxation 

SMEs and startups are all set to leverage new tax reforms and benefit from tax credits and corporate tax rates. The Finance Minister re-evaluated business classification criteria to make India an attractive destination for global investments. 

Here’s how business entities have been classified under Union Budget 2025!

Revised Classification for Businesses Proposed Under Union Budget Meeting
Entity Size	Investment		Turnover
	Current	Revised	Current	Revised
Micro Enterprises	INR 1Cr	INR 2.5Cr	INR 5Cr	INR 10Cr
Small Enterprises	INR 10Cr	INR 25Cr	INR 50Cr	INR 100Cr
Medium Enterprises	INR 50Cr	INR 125Cr	INR 250Cr	INR 500Cr

Also, a new scheme focuses on 500,000 first-time entrepreneurs, mostly from Scheduled Castes, Scheduled Tribes, and women, who can get term loans of up to INR 20 million over the next five years. 

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4. Infrastructure Development 

The government introduced infrastructure development initiatives in the 2025 budget meeting along with new income tax slabs. This development aimed to enhance connectivity across the country and drive growth. Let’s dive in to see the highlights:

• PM Gati Shakti: The union finance minister proposed access to data and maps from the PM Gati shakti portal to improve public private partnerships (PPPs) and assist the private sector in planning projects. The government will leverage PM Gati Shakti for modernizing of land records, town planning, and design infrastructure.
• Enhance Rural Infrastructure: Budget 2025 announced initiatives and investments for roadway, sanitation, and water conservation techniques to bridge the urban-rural gap. 
• Expand the National Infrastructure Pipeline (NIP): Talking about electric mobility, sustainable development, and green infrastructure, the Indian FM disclosed the extension of NIP. 
• Urban Development and Smart Cities: The increasing urban population demands more funds for modernizing the city’s infrastructure. This involves leveraging technologies, smart utilities, and increased public transport. 

Digital Economy 

Digital technologies and innovation are cornerstones of India’s growth, and they had to form the crux of 2025 budget highlights. Here’s what it covers: 

• Incentives for Startups & Innovation: A sequence of tax reliefs, grants, and regulations are announced to boost homegrown startups catering to AI technology, biotech, and other upcoming sectors. 
• Strong Cyber security Initiatives: The growing security breaches and next-gen hackers demand an increasing investment on cyber security infrastructure. Union budget 2025 focuses on protecting sensitive data and digital assets for businesses as well as consumers. 
• Digital Literacy Campaigns: The Finance Minister announced investments in digital literacy programs to educate and prepare the next generation for future jobs and the digital economy. 

Foreign Investment and Trade

While the digital economy transforms industries and drives innovations, it plays a crucial role in attracting foreign investments. India aims to be a global economic player for foreign investment and trade. Here’s what the 2025 budget highlights: 

• Encourage FDI: The Union budget meeting aims to simplify setting up businesses in India for foreign investors. This includes relaxing compliance regulations and offering incentives to sectors like manufacturing, technology, and renewable energy. 
• Free Trade Agreements (FTAs): The Union budget 2025 also focuses on strengthening trade relations through strategic efforts with key global partners. This will help India boost its export potential. 

Social Welfare Programs 

Social Welfare campaigns play a crucial role in union budget meetings. Here’s how the government extends support to the women and children: 

• Women and Child Welfare Allocation: Finance Minister, Nirmala Sitharaman announced allocating special share of funds to promote social causes like gender equality, women’s health, and empowering women entrepreneurs financially. 
• Financial Inclusion Programs: The Indian government plans to improve financial inclusion to expand easier access to credit and banking services for rural as well as underprivileged. 

Agricultural Announcements 

Our agricultural sector forms the crux of the Indian economy. Realizing the importance of farms and farmers in India, budget 2025 addresses the need for long-term agricultural reforms. 

• Income Support to Farmers: The government leverages PM-Kisan Yojna to initiate direct cash transfers to the farmers. This will help to boost home grown agricultural income and enhance financial security. 
• Sustainable Agricultural Plans: Under budget 2025, FM announces tax incentives to the farmers who opt for  water-conservation technologies, organic farming, and other green practices. 

Wrap Up 

New income tax slabs, foreign investment, rural-urban enhancement, women empowerment, investments in green projects, and agricultural strategies form the crux of the 2025 union budget meeting. Comment your queries below and we will surely answer them. 

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FAQS

1. What do you mean by a tax rebate? 

Tax rebate refers to the refund given by the government to the taxpayer if he has paid more taxes. 

2. What is the new Tax regime for 2025-26? 

Union Budget 2025 introduced a new tax regime that raises the tax-free income limit to Rs. 12 Lakh per annum, adjusts tax brackets, and also introduces standard deductions. 

3. What is Section 80C? 

Section 80C facilitates claiming deductions on various payments like insurance premiums, provident fund, PPF, ELSS, etc. to save taxes.  

4. Can I claim section 80D in the new tax regime? 

No, you cannot claim deductions under section 80D if you plan to use the new tax regime.