01 February,2025 01:40 PM IST | New Delhi | mid-day online correspondent
Pic/PTI
In a relief to the middle class, Finance Minister Nirmala Sitharaman on Saturday exempted annual income of up to Rs 12 lakh from income tax and rejigged tax slabs as part of her reformist Budget.
Presenting her eighth straight Budget in the Lok Sabha, Sitharaman laid out a blueprint for next-generation reforms including raising the FDI limit in the insurance sector, simplification of tax laws, and cutting duties on intermediaries while providing enhanced fiscal support for welfare measures.
This she did while sticking to the fiscal consolidation roadmap that projected the fiscal deficit to come down to 4.4 per cent of the GDP in the financial year 2025-26. For the current financial year fiscal deficit has been pegged at 4.8 per cent of GDP.
To bridge the fiscal deficit gap, the government is set to raise resources from the market to the tune of Rs 11.54 lakh crore on a net basis for the next fiscal year.
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Here are major announcements made by FM Nirmala Sitharaman in Budget 2025:
No income tax will be payable on income up to Rs 12 lakh, providing significant relief to taxpayers, especially the middle class. This limit will be Rs 12.75 lakh rupees for salaried taxpayers counting Rs 75,000 of the standard deduction. Sitharaman also stated that the new income tax regime will be simpler, with a special focus on benefiting the middle class.
Following are the revised slabs and rates under the new tax regime announced in the FY26 Budget:
Income up to Rs 4 lakh (per annum) ----- Nil
Between Rs 4 and 8 lakh ---------------- 5 per cent (tax)
Between Rs 8 and 12 lakh --------------- 10 per cent
Between Rs 12 and 16 lakh -------------- 15 per cent
Between Rs16 and 20 lakh --------------- 20 per cent
Between Rs 20 and 24 lakh -------------- 25 per cent
Above Rs 24 lakh ------------------------- 30 per cent
The government will facilitate the setting up of daycare cancer centres in all district hospitals over the next three years and 200 of these will be established in 2025-26. Sitharaman said gig workers will be provided healthcare facilities under the PM Jan Aarogya Yojana (PM-JAY).
Finance Minister Nirmala Sitharaman proposed to fully exempt customs duty on 36 drugs used in the treatment of cancer, rare diseases and other severe chronic diseases. The government had earlier cut customs duties on Trastuzumab Deruxtecan, Osimertinib and Durvalumab from 10 per cent to nil. "To provide relief to patients, particularly those suffering from cancer, rare diseases and other severe chronic diseases, I propose to add 36 lifesaving drugs and medicines to the list of medicines fully exempted from Basic Customs Duty (BCD)," Sitharaman said while presenting 8th consecutive Budget. She also proposed to add six life-saving medicines to the list attracting concessional customs duty of 5 per cent. "Full exemption and concessional duty will also respectively apply on the bulk drugs for the manufacture of the above," Sitharaman stated.
Rs 1.5 lakh crore will be provided towards 50-year interest-free loans to states, for infrastructure development. Presenting Union Budget 2025-26, Sitharaman further said building on the success of the first asset monetization plan announced in 2021, the second plan for 2025-30 will be launched to plough back capital of Rs 10 lakh crore in new projects.
A Maritime Development Fund with a corpus of Rs 25,000 crore will be set up for long-term financing for the maritime industry. Presenting the Budget for 2025-26, Sitharaman said the amount will be used to support and promote competition. This will have up to 49 per cent contribution by the government, while the balance will be mobilised from ports and the private sector.
The Union government on Saturday unveiled several big-ticket plans for poll-bound Bihar in the FY26 Budget, which include setting up of a makahana board, a greenfield airport as well as financial support for Western Koshi Canal Project in the Mithilanchal region of the state. In the Union Budget 2025-26, Finance Minister Nirmala Sitharaman also announced the establishment of a National Institute of Food Technology, Entrepreneurship and Management in Bihar and the expansion of hostel and other infrastructure capacity at IIT Patna.
Finance Minister Nirmala Sitharaman proposed to extend duty exemptions on capital goods used in the production of lithium-ion batteries. The move is aimed at aiding domestic manufacturing of lithium-ion batteries, a key component in electric vehicles and mobile phones. "To the list of exempted capital goods, I propose to add 35 additional capital goods for EV battery manufacturing, and 28 additional capital goods for mobile phone battery manufacturing," she said. This will boost domestic manufacture of lithium-ion batteries, both for mobile phones and electric vehicles, the finance minister said while presenting her record 8th straight Budget.
A fresh Rs 15,000 crore 'SWAMIH Fund' for completion of 1 lakh units in stalled housing projects, a move aimed at providing relief to homebuyers whose investments are stuck.
The top 50 tourist destinations in the country will be developed in partnership with states in a "challenge mode", as she emphasised tourism as a driver of employment-led growth and unveiled a series of initiatives aimed at bolstering infrastructure, skill development and ease of travel. Presenting her eighth straight Union Budget, Sitharaman said the government will promote homestays by extending Mudra loans, and improve connectivity to tourist spots to enhance accessibility.
To boost regional connectivity, the government on Saturday announced a modified UDAN scheme to connect 120 new destinations that will help carry 4 crore passengers in the next 10 years. Presenting the Union Budget for 2025-26, Finance Minister Nirmala Sitharaman also said greenfield airports will be facilitated in Bihar. Ude Desh ka Aam Nagrik (UDAN) -- the regional air connectivity scheme -- has so far connected 88 airports and has helped operationalise 619 routes.
Finance Minister Nirmala Sitharaman announced the rationalisation of TDS (Tax Deduction at Source) regime to ease the compliance burden. Presenting the Budget for 2025-26, she said tax proposals are guided by income tax reforms for the middle class, TDS rationalisation, and easing compliance burden. The government will also be introducing a new Income Tax (I-T) bill in Parliament next week.
The government announced the extension of the time limit for filing updated returns for any assessment year. The time limit is proposed to be extended from the current two years to four years.
The government will create additional infrastructure in five Indian Institutes of Technology (IITs) and expand IIT Patna. Sitharaman said the government will launch the 'Bharatiya Bhasha Pushtak' scheme to provide digital forms of Indian language books for schools and higher education.
To further strengthen agricultural financing, the government has announced enhancing the loan limit under the modified interest subvention (MIS) scheme from Rs 3 lakh to Rs 5 lakh for loans taken through Kisan Credit Card (KCC).
Presenting the Union Budget, Finance Minister Nirmala Sitharaman on Saturday pegged the fiscal deficit target at 4.4 per cent of GDP for the financial year 2025-26. For 2024-25, the fiscal deficit target has been revised from 4.9 per cent of gross domestic product (GDP) to 4.8 per cent. In the Interim Budget tabled on February 1 last year, the Finance Minister had pegged it at 5.1 per cent of GDP.
