February 1, 2025: Union Finance Minister Nirmala Sitharaman presented her 8th budget on Saturday. The Finance Bill is set to be tabled next week, according to the Finance Minister.
Nirmala Sitharaman, in the Budget 2025 announcement, proposed revised tax rates, which highlights that income up to ₹12 lakh will draw zero income tax rates under the new tax regime.
Capex: India’s capital expenditure (Capex) rises to ₹11.21 crore as per the budget estimates of FY2025-26, the budget estimates of FY2024-25 was at ₹11.11 lakh crore, according to the budget data.
Bihar Makhana: Budget 2025 announced India’s plans to create a Makhana Board, which will be established in Bihar to improve the production, processing, value addition, and marketing of Makhana.
Job Scheme: The Modi 3.0 government accounted its plans to generate 22 lakh jobs in the economy through this scheme. India aims to enhance the productivity, quality, and competitiveness of India’s footwear and leather sector.
UDAN Scheme: The government also plans to launch a modified version of the UDAN Scheme, which aims to enhance regional connectivity to 120 new destinations and carry 4 crore passengers in the coming 10 years.
To boost India’s agriculture sector, FM Sitharaman announced multiple agriculture support schemes, expanded credit limit for farmers, MSMEs, and startups. There was a focus on boosting cultivation of pulses and cotton.
Finance Minister Nirmala Sitharaman included the gig economy workers to Centre’s several employment welfare schemes. Now, gig economy workers can take the benefit of identity cards and be enrolled in a national registry to ensure their inclusion in welfare schemes
India’s Nuclear Move
According to Nirmala Sitharaman’s Budget announcement, the government plans to launch a Nuclear Energy Mission for research and development of Small Modular Reactors (SMR).
India allocated ₹20,000 crore for it to be set up and said that it will develop five SMRs, which would be operational by 2033.
Budget Speech’s hot topic ‘Bihar’
According to Nirmala Sitharaman’s announcement and the Budget speech, Bihar remained the hot topic for the government this year. Sitharaman mentioned Bihar six times in her entire speech, the Finance Minister did not name any other state during the Lok Sabha and Nation address.
Proposals ranged from Makhana Board to Greenfield Airports, as per the budget announcement.
IT and Telecom allocations dropped to ₹95,298 crore for FY2025-26.
According to the Union Budget data, the IT and Telecom sector allocations dropped to ₹95,298 crore for FY2025-26, while the FY2024-25 budget estimates were at ₹1.16 lakh crore.
These were the most important numbers for the day:
1. Total receipts (excluding borrowings) – 31.47 lakh crore
2. Net tax receipts – 25.57 lakh crore
3. Total expenditure – 47.16 lakh crore
4. Capital expenditure – 10.18 lakh crore
5. Fiscal deficit – 4.8 per cent of GDP
(As per the FY25 revised estimates)
What will become cheaper?
Union Budget 2025 Highlights: According to Nirmala Sitharaman’s Union Budget 2025 announcement, these are the following items which are meant to become cheaper after the government’s guidance.
1. Cancer and lifesaving drugs
2. Solar PV cells and lithium-ion batteries
3. Lithium-ion batteries for EVs and mobiles
4. Telecom equipment
India’s Energy allocation rose 18% YoY as per budget estimates
According to the Union Budget data, India’s allocation to Energy increased to ₹81,174 crore as per the budget estimates of FY2025-26, compared to ₹68,769 crore as per the budget estimates of FY2024-2.
What does an increase in FDI limit mean?
According to the Budget 2025 announcement, the government of India increased the foreign direct investment (FDI) limit for the insurance sector from 74% to 100%.
This move from the government comes to attract more foreign investment into the insurance sector in the Indian market. “This enhanced limit will be available for those companies which invest the entire premium in India,” according to the Budget announcement.
India pegs Defence Budget at ₹4.91 lakh crore for FY2025-26
The Indian government pegged its Defence spending budget estimates at ₹4.91 lakh crore for FY2025-26. The government spent ₹4.56 lakh crore in the FY2024-25, as per the revised estimates.
New tax regime advantageous for younger taxpayers?
According to the new tax proposals laid out by Nirmala Sitharaman, the new tax regime aims to ensure that individuals have more disposable income to spend and invest in the manner they want.
The old tax regime makes individuals invest in tax-saving investment options like ELSS, provident funds, pension funds, life insurance among other things. It also made people buy houses with bank loans to reduce the tax outgo.
A young taxpayer is not required to make forced investments which people in the old tax regime used to make to save taxes. The new regime has brought the tax slabs down for the middle-income and low-income earners.
What is Section 87A rebate?
Union Budget 2025 Highlights: According to the Income Tax Act of 1961, eligible taxpayers get a total waiver of income tax if their total income for the year is below ₹5 lakh.
As per the proposal of the Budget 2025, Section 87A has been revised for resident individuals, the rebate limit has been increased from ₹7 lakh to ₹12 lakh and the maximum rebate from ₹25,000 to ₹60,000.
However, the rebate will not apply to income taxed at special rates if the individual stays in the default tax regime, according to the data.
The ‘dream budget’ for middle class?
Union Budget 2025 Highlights: Nirmala Sitharaman’s Budget 2025 announcement is being termed as the “dream budget” for the middle class as the Union Finance Minister proposed no tax till the income of ₹12 lakh per year.
Key tax points you need to look out for:
1. Taxpayers with a normal income (excluding special rate income like capital gains) of up to ₹12 lakh will have no tax liability due to a rebate and reduced slab rates.
2. Those earning ₹12 lakh will receive a tax benefit of ₹80,000, which covers 100% of their tax payable under existing rates. For an income of ₹18 lakh, the benefit is ₹70,000, covering 30% of the tax payable.
3. Similarly, a person earning ₹25 lakh will get a benefit of ₹1,10,000, which accounts for 25% of their tax liability under the current rates.
Where is Govt earning from?
Union Budget 2025 Highlights: The Indian government expenditures are diversified in terms of supporting national security, public good, and economic development.
According to the budget 2025 data, the biggest share goes to the state’s taxes and duties at 22%. Interest payments that result from previous borrowings are at 20%. Central sector schemes at 16% of the total spending, 8% goes to Finance Commission transfers and other grants, are among many other costs which the nation has to expend and estimate for its budget every year.
Where does money come from?
Union Budget 2025 Highlights: The government of India earns from the collection of tax revenues and non-tax revenues.
According to the Union Budget 2025, the government earned 39% of the total receipts from income and corporate taxes compared to the previous year. The GST collection trends show a consistent consumption pattern unchanged at 18%.
The government earned 5% from union excise duties and 4% from customs duties, according to the budget data.
India to launch a modified UDAN Scheme.
The Indian government plans to launch a modified version of the UDAN Scheme, which aims to boost regional connectivity in India. The scheme aims to connect 120 new destinations and carry four crore passengers in the coming 10 years, according to the Budget announcement.
Budget proposes to lift restrictions on claiming two properties as self-occupied.
In the Budget announcement, Union Finance Minister Nirmala Sitharaman proposed that India plans to lift restrictions on claiming two properties as self-occupied to streamline the process for taxpayers.
India’s Capex target drops in FY2025-26.
India’s capital expenditure (Capex) target drops to ₹11.21 crore as per the budget estimates of FY2025-26, compared to the budget estimates of FY2024-25 at ₹11.11 lakh crore, according to the budget data.
Fiscal Deficit estimated to be 4.4% of GDP for FY2025-26.
India’s Fiscal Deficit is estimated to be 4.4 per cent of GDP at ₹15.68 lakh crore as per the budget estimates for FY2025-26.
India’s market borrowings estimates at ₹11.53 lakh crore as per the FY2025-26 budget estimates.
Union Finance Minister Sitharaman said the gross market borrowings through bonds and other dated securities are estimated to be ₹11.53 lakh crore as per the budget estimates of 2025-26, according to the budget announcement.
The gross market borrowings via bonds, as per the budget estimates of FY2024-25, were at ₹14.01 lakh crore, as per the July Budget data.
India’s capital receipts borrowings estimated to be at ₹15.68 lakh crore for FY2025-26
India’s estimate for capital receipt borrowings is ₹15.68 lakh crore for FY2025-26, according to the budget data.
According to the July Budget 2024 data, India’s borrowings and other liabilities under capital receipts for the FY2024-25 budget estimates were ₹16.13 lakh crore.
Capital receipts are money inflows that the government receives from non-recurring activities and are used to create long-term investments, pay off debts, and plan expansion.
India’s manufacturing aims
The Indian government aims to support “Clean Tech Manufacturing” to improve domestic value addition, jobs and build an ecosystem for solar PV cells, EV batteries, motors and controllers, electrolyzers, wind turbines, very high voltage transmission equipment and grid-scale batteries, according to the budget announcement.
India exempted basic customs duty on Wet Blue Leather.
The government announced that it has decided to fully exempt the basic customs duty on Wet Blue Leather. India aims to help imports for domestic value addition and employment.
Govt to launch ‘Customized Credit Card’ with ₹5 lakh limit for Micro Enterprises.
The government will launch a ‘Customized Credit Card’ with ₹5 lakh limit for Micro Enterprises, registered on the Udyam portal. According to the budget announcment, the government plans to launch 10 lakh cards in the first year.
FM Sitharaman on New Income Tax says, ‘Everyone is getting benefits…’
Union Finance Minister Nirmala Sitharaman said that every salaried individual is getting benefits from this new system, as overall tax rates have also been brought down.
“Across the board, everyone is getting benefits, as all the groups are getting benefits,” said Sitharaman.
FM Sitharaman on the new Finance Bill.
Union Finance Minister Nirmala Sitharaman says she hopes the upcoming Finance Bill gets past without any “difficulties.”
“I hope it gets passed without any difficulties…,” said Sitharaman.
Centre announced new Urea plant plans in Assam.
According to the Budget announcement, a new Urea plant is to be set up in Namrup, Assam. The plant is set to have an annual capacity of 12.7 lakh metric tonnes.
Centre will create ‘Makhana Board’ in Bihar.
Nirmala Sitharaman announced that the central government would create a “Makhana Board” in Bihar to improve the production, processing, value addition, and marketing of Makhana.
India to create 22 lakh jobs
According to the budget announcement, India aims to generate 22 lakh jobs in the economy through a newly launched “Focus Product Scheme” in the footwear and leather industry.
What will the new Income Tax bill have?
According to the Budget announcement, the New Income Tax Bill, which is set to be tabled next week, will be 50% less in text compared to the present law. With this move, the government aims to simplify the topic of taxation for taxpayers and the tax administration. They also aim to create tax certainty and reduce litigation.
Govt exempted 36 lifesaving drugs and medicines from the basic customs duty.
FM Nirmala Sitharaman announced the exemption of 36 lifesaving drugs and medicines from the basic customs duty (BCDs) on Saturday, February 1.
Centre hikes MSME investment and turnover limits
Budget 2025 Key Highlights: The government hiked the MSME investment and turnover limits 2.5 and 2 times, respectively, in the Union Budget 2025 announcement.
Govt’s plan to boost India’s tourism
India plans to boost tourism in the nation, as Union Finance Minister announced the plans to develop the top 50 tourist sites in partnership with the State.
The Centre announced the introduction of an intensive skill-development programme for the youth. Sitharaman announced that the government will provide MUDRA loans for homestays. They also provide performance-linked incentives to states. They also announced e-visa facilities in the Budget announcement.
