Union Budget 2025 Highlights : New Scheme Launched, Updated
Union Budget 2025
The FM Nirmala Sitharaman started her 8th consecutive Union Budget presentation in the Lok Sabha at 11 am on February 1, 2025. This started after the Union Cabinet’s approval and her meeting with President Droupadi Murmu earlier in the day.
Today, on February 1, 2025, Finance Minister Nirmala Sitharaman presented the first full India Budget of Modi 3.0. It seeks to strike a balance between providing tax relief for the middle class and addressing the economic growth needs of the country.
Most Important Announcement :
No income tax payable up to ₹12 lakh under the new tax regime.
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 Union Budget 2025 – Key Highlights :
| Details | Â Union Budget 2025Â |
|---|---|
| Presented By | Finance Minister Nirmala Sitharaman |
| Occasion | First full Budget of Modi 3.0 government |
| Presentation Date & Time | February 1, 2025, at 11 AM |
| Venue | Lok Sabha, after Union Cabinet approval and meeting with President Droupadi Murmu |
| Focus Areas | Tax relief for the middle class, economic growth, land and labor reforms |
| GDP Growth Projection (FY24) | 6.4% (four-year low, near decadal average) |
| GDP Growth Projection (FY25-26) | 6.3% – 6.8% |
| Previous Growth Rate (FY23-24) | 8.2% |
| Government’s Growth Target | Maintaining an 8% annual growth rate to achieve the goal of Viksit Bharat by 2047 |
| Key Challenges | Slower growth projections compared to previous years, economic reforms needed for sustained growth |
Urban Challenge Fund :
- A ₹1 lakh crore Urban Challenge Fund will established to transform cities into growth hubs and improve infrastructure.
- This fund will support redevelopment and water and sanitation projects.
- At least 50% of funding for projects must come from bonds, bank loans, or public-private partnerships (PPPs).
- ₹10,000 crore has been allocated for the fiscal year 2025-26 to begin the initiative.
Announcements in Tax: Budget 2025Â
Income Tax Benefits :
No income tax payable up to ₹12 lakh under the new tax regime.
- A person with an annual income of ₹18 lakh will benefit by ₹70,000 in tax savings.
- Taxpayers with an annual income of ₹12 lakh will receive an ₹80,000 tax benefit.
Key Changes in Tax Slabs :
The major changes in tax slabs are announced by FM Nirmala Sitharaman :
| Income Range | Tax Rate |
|---|---|
| ₹0 – ₹4 lakh | Nil |
| ₹4 lakh – ₹5 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% |
FDI Limit for Insurance Sector:
Foreign Direct Investment (FDI) limit raised from 74% to 100% in the insurance sector, with certain restrictions.
Government Tax Relief:
- Government to forgo ₹1 lakh crore in direct taxes.
- ₹2,600 crore loss on indirect taxes due to changes in tax rates.
Tax Relief for Senior Citizens:
- Limit for tax deduction on interest income doubled to ₹1 lakh for senior citizens.
- Limit for Tax Deducted at Source (TDS) on rent increased to ₹6 lakh.
Updated Income Tax Return (ITR) Facility:
The time limit to file updated returns extended from 2 years to 4 years to encourage voluntary compliance.
Big TDS Announcements:
- Rationalization of TDS by reducing the number of rates and thresholds.
- Raising the threshold for TDS on rent from ₹2.4 lakh to ₹6 lakh to benefit small taxpayers.
- Increasing the threshold for TCS on remittances under the RBI’s Liberalized Remittance Scheme (LRS) from ₹7 lakh to ₹10 lakh.
Medical Sectors & Budget Highlights :
Daycare Cancer Centres in District Hospitals:
- Daycare cancer centres to set up in all district hospitals over the next three years.
- 200 centres will established in FY 2025-26.
- This aims to improve cancer care accessibility.
Expanding Medical Education:
- Over 1.1 lakh medical seats have been added in the last 10 years.
- 10,000 additional medical seats will added in the coming year.
- A goal of adding 75,000 medical seats over the next five years.
Patient Assistance Programs:
- Pharmaceutical companies’ patient assistance programs will fully exempt from Basic Customs Duty (BCD) if medicines are supplied free of cost to patients.
- 37 new medicines and 13 new patient assistance programs will included in the exemption list.
Relief for Patients:
- 36 life-saving drugs will added to the list of medicines fully exempt from Basic Customs Duty (BCD).
- Six life-saving medicines will added to a list with a concessional 5% customs duty.
- Full exemption and concessional duty will apply to bulk drugs used for manufacturing these medicines.
Other Sector: Budget Key HighlightsÂ
Atal Tinkering Labs and Digital Learning:
- 50,000 Atal Tinkering Labs will established in government schools in five years.
- Broadband connectivity will extended to all government secondary and primary schools for better digital learning access.
Investing in People:
- Focus on Sashakt Anganwadi and Poshan 2.0 programs for over 8 crore children, pregnant women, lactating mothers, and 20 lakh adolescent girls.
- Cost norms for these programs will enhanced.
Support for Bihar’s Food Processing:
- National Institute of Food Technology, Entrepreneurship, and Management will set up in Bihar.
- This initiative will enhance farmers’ incomes, create skilling and employment opportunities for youth in the region.
Boost for Footwear and Leather Sector:
- Measures will introduced to increase productivity, quality, and competitiveness in the footwear and leather sector.
- A scheme to support design capacity, component manufacturing, and machinery for non-leather and leather footwear will launched.
- This is expected to create 22 lakh jobs, generate ₹400 crore, and achieve ₹1.1 lakh crore in exports.
India as a Global Toy Hub :
- A new scheme will focus on building clusters, skills, and a manufacturing ecosystem for toys.
- The goal is to establish India as a global hub for high-quality, innovative, and sustainable toys under the “Made in India” brand.
Sectors & Details :
| Announcement | Details |
|---|---|
| Tax Returns | Time to file tax returns extended. |
| SC/ST Women Entrepreneurs | New scheme to launched for 5 lakh SC/ST women entrepreneurs. |
| Education Sector | Rs 20,000 crore allocated to support private sector-driven research. |
| Tourism Sector | Rs 20,000 crore infusion to boost tourism-led employment. |
| MISS Loan Limit | Loan limit under MISS increased from Rs 3 lakh to Rs 5 lakh. |
| FDI in Insurance Sector | FDI limit increased from 74% to 100%, paving the way for foreign giants and inflows. |
| Export Support Mission | Government to launch Export Support Mission with sectoral and ministerial targets. |
Critical Minerals Support :
Full exemption of Basic Customs Duty (BCD) on cobalt powder, lithium-ion battery waste, scrap, and 12 other critical minerals.
This move aimed at ensuring the availability of materials for manufacturing in India and creating job opportunities for youth.
Boosting Domestic Electronics Industry :
- The government committed to supporting the domestic electronics industry, creating opportunities for youth.
- A national framework will guide states in promoting Global Capability Centers (GCCs) in emerging Tier-2 cities.
- Focus areas will include talent availability, infrastructure upgrades, bylaw reforms, and industry collaboration.
Enhancing Air Cargo Infrastructure :
The government will improve infrastructure and warehousing for air cargo, especially for high-value perishable horticultural produce.
Cargo screening and customs protocols will streamlined to increase efficiency.
Modified UDAAN Scheme :
The UDAAN scheme will modified to include 120 new destinations and an additional 4 crore passengers, aiming to make air travel more accessible.
Power Sector Reforms :
- Key reforms in the power sector will focus on improving electricity distribution and transmission.
- States will incentivized to reform electricity distribution, and intrastate transmission capacity will enhanced.
- An additional borrowing allowance of 0.5% of GSDP will given to states that make progress in these areas.
SWAMIH Fund: Overview
- Special Window for Affordable, Mid-Income Housing (SWAMIH) aims to support middle-class families.
- Assists those paying EMIs on home loans and rent for current accommodations.
Introduction of SWAMIH Fund 2 :
- SWAMIH Fund 2 announced as a blended finance facility.
- Funded through contributions from the Indian government, banks, and private investors.
Financial Allocation & Target :
- Rs 15,000 crore allocated for rapid project completion.
- Aims to finish 1 lakh additional housing units efficiently.
- Union Budget 2025
- Â Union Budget 2025 – Key Highlights :
- Urban Challenge Fund :
- Announcements in Tax: Budget 2025Â
- Income Tax Benefits :
- Key Changes in Tax Slabs :
- Medical Sectors & Budget Highlights :
- Other Sector: Budget Key HighlightsÂ
- Sectors & Details :
- Critical Minerals Support :
- Enhancing Air Cargo Infrastructure :
- Modified UDAAN Scheme :
- Power Sector Reforms :
- SWAMIH Fund: Overview