Union Budget 2025-26 focus on GYAN; huge relief in income tax | Read Highlights

Finance Minister Nirmala Sitharaman presented the Union Budget 2025-26 with a strong focus on the Gareeb (poor), Youth, Annadata (farmers), and Naari (women). The budget introduces sweeping reforms in taxation, economic growth, and social welfare, targeting a future-ready, inclusive India.

The biggest relief for taxpayers comes with the announcement of no income tax on annual income up to Rs.12 lakh under the new tax regime. For incomes above Rs.12 lakh, a progressive tax structure will apply, starting from 5% for income above Rs.4 lakh and going up to 30% for income above Rs.24 lakh. The standard deduction remains unchanged at Rs.75,000, providing continuity amidst major tax changes.

On the economic front, the government doubled the credit guarantee for MSME startups from Rs.10 crore to rs.20 crore, aiming to boost entrepreneurship and job creation. Recognizing the rapid growth of technology, the budget focuses on getting India ready for the AI age, with significant investments in digital infrastructure and innovation.

To tackle urban challenges, the government allocated Rs.1 lakh crore for the Urban Challenge Fund, alongside Rs.20,000 crore each for the maritime industry and small nuclear reactors. Healthcare received a major boost with the announcement of 75,000 new medical seats to be added over the next five years, addressing the growing demand for medical professionals. Additionally, Rs.20,000 crore has been set aside to promote R&D, reinforcing India’s position as a hub for innovation.

Key reforms include raising the FDI limit in the insurance sector from 74% to 100%, encouraging foreign investments. The budget also exempts 36 life-saving drugs from basic customs duty, making critical healthcare more affordable. On the other hand, the custom duty on LED panels has been increased from 10% to 20%, likely impacting the cost of consumer electronics.

Fiscal discipline remains a priority, with the fiscal deficit target revised to 4.8% of GDP for FY 2024-25 and 4.4% for FY 2025-26. The revised total expenditure is pegged at ₹47.16 lakh crore, while the capital expenditure estimate for FY 2024-25 stands at Rs.10.18 lakh crore. Other notable changes include higher TDS limits for senior citizens (Rs.1 lakh), rent (Rs.6 lakh annually), and LRS transactions (Rs.10 lakh), along with higher TDS rates for non-PAN transactions.