Union Finance Minister Nirmala Sitharaman on Saturday made history with her eighth consecutive budget presentation, set against the backdrop of a slowing economy.
A key highlight of the 2025-26 Union Budget was the long-awaited personal income tax relief, with Sitharaman announcing that individuals earning up to Rs 12 lakh annually will be exempt from tax under the new tax regime, offering much-needed relief to the middle class through higher exemption limits and a reshuffling of tax slabs. She announced that a new income tax bill will be introduced in Parliament in this regard.
The finance minister also outlined 10 major development initiatives aimed at addressing poverty, youth, women, agriculture, manufacturing, MSMEs, employment, and inclusive growth.
In a bid to drive long-term growth, she announced that the government plans transformative reforms in six key sectors: taxation, power, urban development, mining, financial services, and regulatory frameworks.
Sitharaman also projected a fiscal deficit of 4.8% of GDP for FY25 and 4.4% for FY26, with net market borrowings estimated at Rs 11.54 lakh crore for the upcoming fiscal year.
The ambitious phase three of the e-Courts project, which seeks to establish digital, online and paperless lower courts in the country, has been allocated Rs 1,500 crore in the Union Budget.
The funds for the project have been allocated under the National Mission for Justice Delivery and Legal Reforms.
Congress president Mallikarjun Kharge on Saturday said the government is busy garnering praises for the Union Budget when the entire country is struggling with problems of inflation and unemployment, and asserted that the Budget is an attempt to "dupe" the people.
In a post on X in Hindi, Kharge said that in the last 10 years, the Narendra Modi government has collected Rs 54.18 lakh crore of income tax from the middle class, and now the exemption is being given to those earning up to Rs 12 lakh.
एक मुहावरा इस बजट पर बिलकुल सटीक बैठता है - नौ सौ चूहे खाकर बिल्ली हज को चली !
— Mallikarjun Kharge (@kharge) February 1, 2025
पिछले 10 वर्षों में मोदी सरकार ने Middle Class से ₹54.18 लाख करोड़ का Income Tax वसूला है, और अब वह 12 लाख तक का जो exemption दे रहें हैं, उसके हिसाब से वित्त मंत्री खुद कह रहीं हैं कि साल में… pic.twitter.com/ONgQElyCB0
It’s not just your tax liability that gets lighter for those opting for the new income tax regime to the tune of Rs 1 trillion collectively in taxes foregone, there are some life-saving drugs, critical minerals, and components for electric vehicles that will also become cheaper.
But some goods like flat panel displays are set to be dearer with the budget proposing to jack up import duties on them.
This is because Finance Minister Nirmala Sitharam has made some key changes in customs duties and exemptions in the budget, impacting various sectors.
Addressing a press conference hours after presenting the Union Budget at the Parliament, Union Finance Minister Nirmala Sitharaman said that the income tax system has been simplified in the budget and the Bill in regards to it will be brought in next week.
She said the budget prioritised healthcare and education and focused both on rural prosperity and urban development.
#WATCH | Delhi: Union Finance Minister Nirmala Sitharaman says, "There is no reduction in the public spending on capital expenditure. We continue to place emphasis on the multiplier effect that capital expenditure done by government has shown has sustained us. We continue on… pic.twitter.com/aJ4ZvwRd7N
— ANI (@ANI) February 1, 2025
The government's flagship Khelo India programme to scout and nurture athletes at the grassroots level was the biggest beneficiary as the allocation for sports and youth affairs was hiked substantially by Rs 351.98 crore in the Union Budget presented by Union Finance Minister Nirmala Sitharaman.
The ambitious scheme has been allocated Rs 1,000 crore for the financial year 2025-26. This is Rs 200 crore more than the grant of Rs 800 crore in 2024-25.
Overall, the Ministry for Youth Affairs and Sports was designated Rs 3,794.30 crore.
Leader of Opposition in Lok Sabha and Congress leader Rahul Gandhi slammed the Union Budget as a "band-aid for bullet wounds," saying that the Centre was "bankrupt of ideas."
"A band-aid for bullet wounds! Amid global uncertainty, solving our economic crisis demanded a paradigm shift," Gandhi said in a post on X.
A band-aid for bullet wounds!
— Rahul Gandhi (@RahulGandhi) February 1, 2025
Amid global uncertainty, solving our economic crisis demanded a paradigm shift.
But this government is bankrupt of ideas.
The government has reduced its borrowings estimate for next financial year to Rs 11.54 lakh crore on net basis as it expects an improvement in tax collection. The government has to borrow by issuing dated securities to meet its fiscal deficit target. However, gross market borrowings have now been revised upward to Rs 14.82 lakh crore from Rs 14.01 lakh crore estimated for the current financial year.
"Coming to 2025-26, the total receipts other than borrowings and the total expenditure are estimated at Rs 34.96 lakh crore and Rs 50.65 lakh crore respectively. The net tax receipts are estimated at Rs 28. 37 lakh crore," Finance Minister Nirmala Sitharaman said in her Budget speech.
In absolute terms, fiscal deficit is pegged at Rs 15,68,936 crore for financial year 2025-26. "To finance the fiscal deficit, the net market borrowings from dated securities are estimated at Rs 11.54 lakh crore. The balance financing is expected to come from small savings and other sources. The gross market borrowings are estimated at Rs 14.82 lakh crore," she said.
Finance Minister Nirmala Sitharaman on Saturday announced a Rs 20,000-crore nuclear mission and duty exemptions for crucial minerals and capital goods for electric vehicles to step up energy transition.
Boosting nuclear energy at this time is important as it can replace coal as the base load for the power sector in India.
Presenting her eighth straight budget in the Lok Sabha on Saturday, the minister announced the Nuclear Energy Mission for Viksit Bharat for development of at least 100 GW of nuclear energy by 2047.
She said that the mission is essential for energy transition efforts.
For an active partnership with the private sector towards this goal, amendments to the Atomic Energy Act and the Civil Liability for Nuclear Damage Act will be taken up, she informed the House.
A Nuclear Energy Mission for research & development of Small Modular Reactors (SMR) with an outlay of Rs 20,000 crore will be set up. At least five indigenously developed SMRs will be operationalized by 2033.
For promoting electric vehicles (EVS), she said that 35 additional capital goods for EV battery manufacturing, and 28 additional capital goods for mobile phone battery manufacturing have been exempted from duties.
This will boost domestic manufacture of lithium-ion batteries, both for mobile phones and electric vehicles, she opined.
Having missed the target for the current financial year, Finance Minister Nirmala Sitharaman on Saturday proposed to spend Rs 11.21 lakh crore towards capital expenditure (capex) for FY26.
However, the capex target is going to be missed by about 93,000 crore for the current financial year. Against the Budget estimates of Rs 11.11 lakh crore for capex, the government is expected to spend Rs 10.18 lakh crore in Revised Estimates for FY25.
"The Revised Estimate of the total receipts other than borrowings is Rs 31.47 lakh crore, of which the net tax receipts are Rs 25.57 lakh crore. The Revised Estimate of the total expenditure is Rs 47.16 lakh crore, of which the capital expenditure is about Rs 10.18 lakh crore (FY25)," she said while presenting the Union Budget for FY26.
The shortfall in capex is attributed to 2024 being an election year resulting in no activity for 2-3 months.
The government on Saturday allocated Rs 2,873,33.16 crore for the road transport and highways ministry for 2025-26, about 2.41% up from the outlay of Rs 2,805,18.80 crore in the current financial year.
Finance Minister Nirmala Sitharaman on Saturday also increased the allocation to state-owned National Highways Authority of India (NHAI) to Rs 1,878,03 crore from last year's Rs 1,693,71 crore.
The NHAI's total debt at the beginning of the current fiscal year was pegged at Rs 3.35 lakh crore, which stood about Rs 2.76 lakh crore at the end of third quarter of FY25.
The Budget for 2025-26 makes no provision for borrowings by the NHAI for the next financial year, to reduce the highway developer's debt.
The government on Saturday announced the enhancement of investment and turnover limits for the classification of all Micro, Small and Medium Enterprises (MSMEs).
Finance Minister Nirmala Sitharaman said to help them achieve higher efficiencies of scale, technological upgradation and better access to capital, the investment and turnover limits for classification of all MSMEs will be enhanced to "2.5 and 2 times, respectively."
This will give them the confidence to grow and generate employment for youth, the minister said.
Currently, over 1 crore registered MSMEs, employing 7.5 crore people, and generating 36 per cent of our manufacturing, have come together to position India as a global manufacturing hub.
The MSMEs are responsible for 45 per cent of the country's exports.
As per the announcements, any firm with investment up to Rs 2.5 crore and turnover under Rs 10 crore will be classified as "micro."
A company with investment up to Rs 25 crore and turnover up to Rs 100 crore will be classified as "small" and a firm with investment up to Rs 125 crore and turnover under Rs 500 crore will be classified as "medium."
Prime Minister Narendra Modi called the Union Budget 2025-26 a "people's budget," stating it aims to boost savings and increase disposable income.
"Usually, Budget's focus is on how the government treasury will be filled... But this Budget is exactly opposite; it lays a strong foundation of how the pocket of common man be filled, on how savings of people will increase, and people will become a partner in development," he said.
#WATCH | On Union Budget 2025, Prime Minister Narendra Modi says "Usually the focus of the budget is on how the government treasury will be filled, but this budget is exactly the opposite of that. How will this budget fill the pockets of the citizens of the country, how will the… pic.twitter.com/txWkpFOocG
— ANI (@ANI) February 1, 2025
The Union Budget 2025-26 has allocated Rs 26,889.69 crore to the Ministry of Women and Child Development (WCD), an increase from the revised estimate of Rs 23,182.98 crore in 2024-25.
Saksham Anganwadi & POSHAN 2.0:
Rs 21,960 crore allocated to combat malnutrition and strengthen early childhood care.
Tribal Welfare Initiatives:
Rs 120 crore for Pradhan Mantri Janjati Adivasi Nyaya Maha Abhiyan (PM JANMAN) for the socio-economic development of 75 Particularly Vulnerable Tribal Groups. Rs 75 crore for Dharti Aba Janjatiya Gram Utkarsh Abhiyan.
Mission Vatsalya (Child Protection):
Budget increased to Rs 1,500 crore from Rs 1,391 crore last year. Focus on creating a safe environment for vulnerable children, including institutional and family-based care.
Women's Empowerment (Mission Shakti): Rs 3,150 crore allocated for Mission Shakti, with major components Sambal and Samarthya schemes receiving significant funding. Sambal Scheme: Rs 629 crore for Beti Bachao Beti Padhao, One Stop Centres, etc. Samarthya Scheme: Rs 2,521 crore for schemes like Swadhar Greh, PMMVY, and Working Women’s Hostels. Rs 30 crore for Nirbhaya Fund.
Autonomous Bodies: National Commission for Women (NCW): Rs 28 crore. National Commission for Protection of Child Rights (NCPCR): Rs 25 crore. National Institute of Public Cooperation and Child Development (NIPCCD): Rs 90 crore (slight increase). Central Adoption Resource Agency (CARA): Rs 14.49 crore.
Regional Allocations: Rs 2,615.38 crore for schemes in the Northeast (increase from Rs 2,300 crore last year). Rs 22,195.95 crore in grants to state governments. Rs 897.40 crore in grants to Union Territory governments for WCD programmes.
The central government has allotted Rs 3,412.82 crore to the Union Environment Ministry in the 2025-26 Union Budget, an increase of 9 per cent from 3,125.96 crore in 2024-25. The Budget allocates more funds for ecosystem conservation, wildlife protection and expanding forest cover.
The National Mission for a Green India, which works to expand forest cover, protect existing forests and prevent wildfires, will receive Rs 220 crore in 2025-26, an increase from Rs 160 crore last year.
Funding for natural resource and ecosystem conservation has also gone up from Rs 30 crore to Rs 50 crore. Under this component, the budget for biodiversity conservation has been nearly tripled from Rs 3.5 crore to Rs 10 crore.
The government has allocated Rs 35 crore for conserving aquatic ecosystems, up from Rs 23.5 crore in 2024-25. Funding for Project Tiger and Project Elephant which focus on protecting these animals and their habitats has been increased from Rs 245 crore to Rs 290 crore.
The budgetary allocation for the civil aviation ministry has been cut by nearly 10 per cent to Rs 2,400.31 crore for the next financial year, with the regional air connectivity scheme UDAN set to get a lower amount of Rs 540 crore.
The allocation in the Union Budget 2025-26, presented by the Finance Minister Nirmala Sitharaman in Parliament on Saturday, is less compared to Rs 2,658.68 crore in the revised 2024-25 Budget.
Out of the total allocation for the next fiscal starting from April 1, 2025, UDAN will get Rs 540 crore, which is 32% lower compared to Rs 800 crore in the year-ago period.
Direct Tax:
No personal income tax for income up to Rs 12 lakh under new regime.
Rs 12.75 lakh limit for salaried taxpayers due to Rs 75,000 standard deduction.
Rs 1 lakh crore in direct tax revenue foregone.
New Income Tax Bill to be introduced next week; will be simple and clear.
Indirect Tax:
Seven tariff rates removed.
Social Welfare Surcharge on 82 tariff lines exempted.
Insurance Sector:
FDI in insurance sector raised to 100% from 74%.
Govt Receipts:
Total receipts (excluding borrowings) at Rs 34.96 lakh crore; total expenditure at Rs 50.65 lakh crore.
Net tax receipts at Rs 28.37 lakh crore.
Fiscal deficit at 4.4% of GDP.
Gross market borrowings at Rs 14.82 lakh crore.
Capex expenditure at Rs 11.21 lakh crore (3.1% of GDP).
Agriculture Sector:
PM Dhan-Dhaanya Krishi Yojana to benefit 1.7 crore farmers across 100 districts.
6-year 'Mission for Aatmanirbharta in Pulses' for Tur, Urad, and Masoor.
NAFED and NCCF to procure pulses from farmers over 4 years.
Makhana Board to improve production and marketing in Bihar.
Urea plant with 12.7 lakh metric tonnes annual capacity at Namrup, Assam.
MSME Sector:
Investment and turnover limits for MSMEs to be raised 2.5x and 2x, respectively.
Rs 5 lakh limit customized credit cards for micro-enterprises on Udyam portal, 10 lakh cards in first year.
New Rs 10,000 crore Fund of Funds for MSMEs.
Term-loans up to Rs 2 crore for 5 lakh women, SC, and ST entrepreneurs over 5 years.
Focus product scheme to create 22 lakh jobs, generate Rs 4 lakh crore turnover, and Rs 1.1 lakh crore exports.
Scheme to make India a global hub for toys.
Investment:
50,000 Atal Tinkering Labs in government schools in 5 years.
Additional infrastructure for 5 IITs to accommodate 6,500 more students.
Rs 500 crore Centre of Excellence in Artificial Intelligence for education.
3-year pipeline of infrastructure projects in PPP mode, with states encouraged.
Rs 1.5 lakh crore outlay for interest-free loans to states for capital expenditure.
Asset Monetisation Plan for Rs 10 lakh crore in new projects (2025-30).
Rs 20,000 crore Nuclear Energy Mission for research on Small Modular Reactors (SMRs).
Modified UDAN scheme to enhance regional connectivity to 120 new destinations.
SWAMIH Fund 2 to complete 1 lakh dwelling units.
BharatTradeNet platform for international trade documentation and financing.
Benchmark indices Sensex and Nifty remained volatile on Saturday after the Union Budget presentation as investors saw little coming in from the Finance Minister Nirmala Sitharaman for retail investors and the overall markets.
Stock indices opened with gains and traded in the positive territory during the Budget presentation. However, soon after Sitharaman completed her Budget speech in Parliament, the 30-share BSE benchmark Sensex declined 494.1 points to 77,006.47 in the late afternoon trade.
The NSE Nifty went lower by 162.35 points to 23,346.05. Later, Sensex pared losses to trade sideways at 77,509.90 while Nifty was at 23,495.30.
Both benchmarks had rallied for the past four trading days. The markets were open on Saturday due to the presentation of the Union Budget.
66 paise of every rupee in government revenue will come from direct and indirect taxes, according to the Union Budget 2025-26 documents.
24 paise will be sourced from borrowings and other liabilities.
9 paise will come from non-tax revenue, including disinvestment.
1 paise will be generated from non-debt capital receipts.
Direct Taxes: 39 paise will come from direct taxes; 22 paise from income tax; 17 paise from corporate tax.
Indirect Taxes: 18 paise from Goods and Services Tax (GST); 5 paise from excise duty; 4 paise from customs duty.
Expenditure Breakdown:
20 paise for interest payments.
22 paise for states' share of taxes and duties.
8 paise for defence allocation.
16 paise for central sector schemes.
8 paise for centrally-sponsored schemes.
8 paise for Finance Commission and other transfers.
6 paise for subsidies.
4 paise for pensions.
8 paise for other expenditures.
The Budget on Saturday pegged gross tax receipts of Rs 42.70 lakh crore for the next fiscal, an 11% growth over the revised estimates for the current year.
The revised estimates for the current fiscal has pegged gross tax revenues at Rs 38.44 lakh crore, higher than Rs 38.40 lakh crore provided in the Budget Estimates (BE).
In the current fiscal, income from corporate taxes will lag budget estimates, while that from personal tax is projected to be higher than BE. Personal income tax is projected at Rs 12.57 lakh crore, while corporate tax is at Rs 9.80 lakh crore.
As per Budget data, personal income tax collections are projected to grow by 14.4% to Rs 14.38 lakh crore in the 2025-26 fiscal beginning April 1. Corporate taxes are projected to grow by 10.4% to Rs 10.82 lakh crore in FY26. GST revenue is estimated to increase 11% to Rs 11.78 lakh crore (including Central GST and compensation cess).
The FY26 Budget pegged miscellaneous capital receipts (including disinvestment and asset monetisation) of Rs 47,000 crore, higher than Rs 33,000 crore in the revised estimates for the current fiscal.
The government on Saturday allocated Rs 6,81,210 crore for the defence budget for 2025-26, up from last year's outlay of Rs 6,21,940 crore.
The total capital outlay has been pegged at Rs 1,92,387 crore.
The revenue expenditure has been put at Rs 4,88,822 crore, including Rs 1,60,795 crore for pensions.
Under capital expenditure, Rs 48,614 crore has been set aside for aircraft and aero engines while Rs 24,390 crore has been allocated for the naval fleet. An amount of Rs 63,099 crore has been set aside for other equipment.
In 2024-25, the government allocated Rs 6,21,940 crore for the defence budget. The capital outlay was pegged at Rs 1,72,000 crore.
More than Rs 334 crore has been allocated to the personnel ministry for the next fiscal to train government employees, both in the country and abroad, and augment necessary training related to infrastructure, according to the Union Budget 2025-26 presented by Finance Minister Nirmala Sitharaman on Saturday.
A sum of Rs 100 crore has been earmarked for administrative reforms.
The provision is meant for modernisation of government offices, pilot projects on administrative reforms, which comprises promotion of e-governance, fostering of good governance and also comprehensive system for redressal of public grievances, among others.
Out of the total allocation of Rs 334.45 crore for the 2025-26 fiscal, Rs 105.99 crore is to meet establishment-related expenditure for the "Training Division, Institute of Secretariat Training and Management (ISTM) and Lal Bahadur Shastri National Academy of Administration (LBSNAA)", Rs 118.46 for "Training Schemes" and Rs 110 crore for "National Programme for Civil Services Capacity Building" or "Mission Karmayogi".
Mission Karmayogi, dubbed as the biggest bureaucratic reform initiative, is aimed at making government employees more "creative, proactive, professional and technology-enabled."
The government on Saturday announced a revamp of the current model Bilateral Investment Treaty (BIT) to make it more investor-friendly and attract foreign players.
Finance Minister Nirmala Sitharaman said that as proposed in the Interim Budget, the country signed Bilateral Investment Treaties (BIT) with two countries last year. "To encourage sustained foreign investment and in the spirit of 'first develop India', the current model BIT will be revamped and made more investor-friendly," she said.
The announcement assumes significance as only a few countries have accepted the existing model tax treaty, and most of the developed nations have expressed their reservations on the tax with regard to provisions like resolution of disputes. These investment treaties help in protecting and promoting investments in each other's countries.
These pacts are important as India has earlier lost two international arbitration cases against British telecom giant Vodafone and Cairn Energy plc of the UK over the retrospective levy of taxes. Last year, the centre had announced implementation of these treaties with UAE and Uzbekistan. Presently, India is negotiating this treaty with countries such as the UK, Saudi Arabia, Qatar, and the European Union (EU).
The Budget 2025 has nothing to offer to the common people and the middle class, and the government has brought the document with upcoming Bihar elections in mind, Opposition leaders on Saturday said.
Trinamool Congress national general secretary and Lok Sabha MP Abhishek Banerjee said there was nothing for West Bengal in the Budget.
"There is nothing for common people in the Budget. They have presented the Budget with the upcoming Bihar elections in mind. Last time as well, all announcements were for Andhra Pradesh and Bihar. Andhra Pradesh elections are over, Bihar polls are upcoming, so the state is in focus," Banerjee told reporters in the Parliament complex.
DMK Lok Sabha MP Dayanidhi Maran called the Budget a "big letdown" for the country. "It is a big letdown for the country, especially for the middle class. The Finance Minister claims she is giving tax exemption up to Rs 12 lakh, but the very next line was there is 10 per cent tax slab for Rs 8 to Rs 10 lakh income," he said.
"Since Bihar elections are coming there are a lot of announcements for Bihar, again fooling the people of Bihar," he added.
The government will facilitate 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, Union Finance Minister Nirmala Sitharaman announced on Saturday.
Presenting the 2025-26 Union Budget, her record eighth, Sitharaman said 10,000 additional seats will be added in medical colleges and hospitals next year towards the goal of adding 75,000 seats in the next five years.
The government will facilitate setting up of daycare cancer centres in all district hospitals in the next three years, Sitharaman said.
She said, "200 centres will be established in 2025-26 itself."
On adding seats in medical colleges and hospitals, Sitharaman said, "Our government has added almost 1.1 lakh undergraduate and postgraduate medical education seats in 10 years, an increase of 130%"
"In the next year, 10,000 additional seats will be added in medical colleges and hospitals towards the goal of adding 75,000 seats in the next five years," she said.
The government on Saturday announced that taxpayers can claim annual value of two self-occupied properties as "nil" without any condition.
In her Budget speech, Finance Minister Nirmala Sitharaman said, "Presently taxpayers can claim the annual value of self-occupied properties as nil only on the fulfilment of certain conditions. Considering the difficulties faced by taxpayers, it is proposed to allow the benefit of two such self-occupied properties without any condition."
As per the Budget memorandum, the government has proposed amendment to Sub-Section 2 of Section 23 of Income Tax Act, which relates to determination of annual value of house properties.
"Sub-section (2) of the said section provides that where house property is in the occupation of the owner for the purposes of his residence or owner cannot actually occupy it due to his employment, business or profession carried on at any other place, in such cases, the annual value of such house property shall be taken to be nil," the document said.
Further, sub-section (4) provides that provisions of sub-section (2) will be applicable in respect of two house properties only, which are to be specified by the owner.
"With a view to simplifying the provisions, it is proposed to amend the sub-section (2) so as to provide that the annual value of the property consisting of a house or any part thereof shall be taken as nil, if the owner occupies it for his own residence or cannot actually occupy it due to any reason," the Budget memorandum said.
The provision of sub-section (4), which allows this benefit only in respect of two of such houses, will continue to apply as earlier. The amendment will take effect from April 1, 2025 and will accordingly apply for assessment year 2025-26 onwards.
Finance Minister Nirmala Sitharaman on Saturday announced the removal of import duties on 12 critical minerals, lithium-ion batteries scrap, cobalt products, led and zinc.
"I propose to fully exempt customs duties on 25 critical minerals and reduce BCD on two of them. This will provide a major fillip to the processing and refining of such minerals and help secure their availability for these strategic and important sectors," Sitharaman said.
"Now I propose to fully exempt Cobalt power and waste, the scrap of litium-ion battery, lead, zinc and 12 more critical minerals. This will help secure availability for manufacturing in India and promote more jobs our youth," the finance minister added.
Finance Minister Nirmala Sitharaman on Saturday 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.
The Budget has addressed a long-standing demand from states, particularly those with high debt, by increasing their borrowing limits from the current 3% of GSDP to 3.5% starting from the next fiscal year.
Finance Minister Nirmala Sitharaman on Saturday announced 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.
Presenting the 14th consecutive Budget under the Narendra Modi government since 2014, Sitharaman also proposed the exemption of TCS (tax collected at source) for remittances for education purposes in cases where education loan is taken from specified financial institutions.
She added that 33,000 taxpayers have availed Vivad Se Vishwas 2.0 scheme to settle direct tax disputes.
The limit for tax deduction on interest income would be doubled to Rs 1 lakh for senior citizens, and the limit for TDS on rent is proposed to be increased to Rs 6 lakh.
Besides, the budget extends the period of incorporation by five years for startups to avail of tax benefits.
The fiscal deficit for FY25 has been pegged at 4.8% of GDP and at 4.4% for FY26, Finance Minister Nirmala Sitharaman said on Saturday.
Presenting the Budget 2025-26, she said net market borrowings are estimated at Rs 11.54 lakh crore for next fiscal year.
The finance minister also said the government will set up a high-level committee for regulatory reforms on all non-financial sectors. She also said NaBFID (National Bank for Financing Infrastructure and Development) will set up partial credit enhancement facility for corporate bonds.
Investment friendliness index of states will be launched this year, Sitharaman further said.
Union Finance Minister Nirmala Sitharaman on Saturday announced the rationalisation of TDS (Tax Deduction at Source) regime to ease compliance burden.
Presenting the Budget for 2025-26, she said tax proposals are guided by income tax reforms for 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.
Meanwhile, the government will increase the limit of TCS on remittances under RBI's liberalised remittance scheme from Rs 7 lakh to Rs 10 lakh.
Also, Sitharaman said that 35 additional goods for EV battery, 28 additional goods for mobile phone battery production will be included in the list of exempted capital goods.
#BudgetWithTNIE | The tax slabs announced in the #budget. Income up to Rs 12 lakh will turn tax free only by availing rebates:@santwana99 pic.twitter.com/csHXaMV8Bt
— The New Indian Express (@NewIndianXpress) February 1, 2025
In another major reform move, FM Nirmala Sitharaman announced that the Foreign Direct Investment (FDI) in the insurance sector will be increased to 100% to 74%
Finance Minister Nirmala Sitharaman on Saturday announced 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.
Presenting the 14th consecutive Budget under the Narendra Modi government since 2014, Sitharaman also proposed the exemption of TCS (tax collected at source) for remittances for education purposes in cases where education loan is taken from specified financial institutions.
She added that 33,000 taxpayers have availed Vivad Se Vishwas 2.0 scheme to settle direct tax disputes.
The limit for tax deduction on interest income would be doubled to Rs 1 lakh for senior citizens, and the limit for TDS on rent is proposed to be increased to Rs 6 lakh.
Besides, the budget extends the period of incorporation by five years for startups to avail of tax benefits.
In an aggressive bid to overhaul tax reform, Finance Minister Nirmala Sitharaman announced no personal income tax on incomes up to Rs 12 lakh, responding to growing calls to ease the middle class tax burden.
For salaried employees, this nil tax limit will be Rs 12. 75 lakh per annum, after taking into account a standard deduction of Rs 75,000.
As per the rejig, for people earning more than Rs 12 lakh per annum, there will be nil tax for income up to Rs 4 lakh, 5% for income between Rs 4 and 8 lakh, 10% for Rs 8-12 lakh, 15% for Rs 12-16 lakh. A 20% income tax will be levied on income between Rs 16 and 20 lakh, 25% on Rs 20-24 lakh and 30% above Rs 24 lakh per annum.
A peson in the new regime with an income of Rs 12 lakh will get a benefit of Rs 80,000 in tax.
A person with an income of Rs 18 lakh gets a benefit of Rs 70,000 .
A person with an income of Rs 25 lakh gets a benefit of Rs 1.10 lakh.
With the government set to introduce a new income tax bill next week, Union Finance Minister Nirmala Sitharaman emphasised that taxation is a key reform for Viksit Bharat.
She said personal income tax reforms will have a special focus on easing the burden for the middle class. She added that the new Income Tax Bill will simplify laws, retain close to half of the present laws, be clear and direct, and reduce the complexity for taxpayers.
Union Finance Minister Nirmala Sitharaman announced that the annual TDS (Tax Deducted at Source) limit on rent has been increased to Rs 6 lakh from Rs 2.4 lakh.
She also proposed raising the threshold for collecting TDS on remittances under the Liberalised Remittance Scheme (LRS) to Rs 10 lakh, up from the current Rs 7 lakh. Additionally, TDS threshold for senior citizens has raised from Rs 50,000 to Rs 1 lakh.
Previously, the TDS on rent, under Section 194-I, was capped at Rs 2.4 lakh for FY 2024-25. The threshold had been Rs 1.8 lakh until FY 2018-19. Notably, TDS on rent does not attract any education cess or secondary and higher education cess.
The government will develop top 50 tourist sites in partnership with states and also extend mudra loans to homestays, Finance Minister Nirmala Sitharaman said on Saturday.
In efforts to boost tourism in the country, Sitharaman said medical tourism will be promoted in partnership with the private sector and the government will also give special focus to destinations related to life and times of Lord Buddha.
Presenting the Budget for 2025-26, the minister also said financial support will be provided for Western Kosi Canal, benefiting 50,000 hectare in Mithilanchal region in Bihar.
Cost norms for nutritional support programmes like Saksham Anganwadi and Poshan 2.0 will be enhanced in the Union Budget 2025-26, Finance Minister Nirmala Sitharaman said on Saturday.
Sitharaman said Saksham Anganwadi and Poshan 2.0 programmes provide nutritional support to over 8 crore children, 1 crore pregnant and lactating women, and 20 lakh adolescent girls in aspirational districts and the northeast region. "The cost norms for these nutritional support (programmes) will be enhanced accordingly," she said.
Finance Minister Nirmala Sitharaman on Saturday 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% 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%. "Full exemption and concessional duty will also respectively apply on the bulk drugs for the manufacture of the above," Sitharaman stated.
Finance Minister Nirmala Sitharaman on Saturday said Rs 1.5 lakh crore will be provided towards 50-year interest free loans to states, for infrastructure development.
Also, an asset monetisation plan will be launched for 2025-30 period to infuse Rs 10 lakh crore capital in new projects.
Presenting the Budget for 2025-26, she also announced an outlay of Rs 500 crore for setting up a centre of excellence in artificial intelligence for education.
Further, the Budget outlay for Jal Jeevan Mission is being enhanced to achieve 100 per cent coverage, she added.
Sitharaman also said that urban sector reforms relating to governance, urban land and planning will be incentivised.
Finance Minister Nirmala Sitharaman announced that the government plans to introduce a new Income Tax Bill next week "to take forward 'trust first, scrutinise later' concept."
It is good to see additional capacity being created in IITs and Medical Colleges.
A lot of reliance on credit-card-based short-term loans for farmers and MSMEs. It may not help, as a lot of people in these sectors need capital support and long-term credit.
The union government support for urban sector and state infrastructure projects may not get realised on ground, as it is contingent on reforms.
The Budget has announced many national missions. We will need to see the details to assess the amount of resources that are being committed by the government to these missions and the expectations that the government has from the private sector.
Finance Minister Nirmala Sitharaman on Saturday announced another round of Fund of Funds for Startups scheme with a corpus of Rs 10,000 crore to promote growth of budding entrepreneurs.
The announcement assumes significance as the government is focusing on promoting innovation through startups.
Department for Promotion of Industry and Internal Trade (DPIIT) has recognised over 1.5 lakh startups so far.
An action plan for Startup India was unveiled on January 16, 2016.
In the same year, Fund of Funds for Startups (FFS) scheme was launched with a corpus of Rs 10,000 crore, to meet the funding needs of startups.
DPIIT is the monitoring agency and Small Industries Development Bank of India (SIDBI) is the operating agency for FFS.
The total corpus of Rs 10,000 crore was envisaged to be provided over the 14th and 15th Finance Commission cycles based on progress of the scheme and availability of funds.
It has not only made capital available for startups at early stage, seed stage and growth stage but also played a catalytic role in terms of facilitating raising domestic capital, reducing dependence on foreign capital and encouraging home- grown and new venture capital funds.
Finance Minister Nirmala Sitharaman on Saturday announced the government's plan to transform India into a large logistics organisation with 1.5 lakh rural post offices.
Sitaraman said India Post will be transformed into a large public logistic organisation with 1.5 lakh rural post offices to become a catalyst for the rural economy. She also announced the government's plan to set up a urea plant with a 12.7 lakh tonne capacity in Assam.
The government will set up an Urban Challenge Fund of Rs 1 lakh crore to finance up to 25% of bankable projects and allocated Rs 10,000 crore for 2025-26, Finance Minister Nirmala Sitharaman said on Saturday.
She said the fund will be used to implement the proposals for cities as growth hubs, and creative redevelopment.
Sitharaman also announced measures for electricity distribution and improving the financial health of DISCOMS (distribution companies).
Additional borrowing of 0.5% of state GDP to be allowed to strengthen electricity distribution and transmission companies, the finance minister said, adding that with a corpus of Rs 25,000 crore, a Maritime Development fund would be set up for distributing support and promoting competition.
Finance Minister Nirmala Sitharaman on Saturday said a focused scheme will be launched for the footwear and leather sectors while steps will be initiated to make India a global toy manufacturing hub.
The government will also launch a mission to support clean technology manufacturing activities, she said while presenting the Union Budget for 2025-26.
She said investment as third engine encompasses investing in people, innovation, and economy.
Broadband connectivity will be provided to all government secondary schools and primary healthcare centres, Sitharaman said.
The government will launch a Rs 2-crore term loan for 5 lakh first-time women, SC and ST entrepreneurs, Finance Minister Nirmala Sitharaman said on Saturday.
Presenting the Union Budget for 2025-26, the finance minister also said a manufacturing mission will be set up for SME and large industries.
Besides, the government will undertake facilitation measures to enhance productivity of labour-intensive sectors, Sitharaman said.
The credit guarantee cover will be doubled to Rs 20 crore, guarantee fee moderated to 1 per cent, she added.
She also said a national institute of food technology, entrepreneurship and management will be established in Bihar.
Finance Minister Nirmala Sitharaman on Saturday announced enhancing the limit for interest subvention scheme for Kisan Credit Cards from Rs 3 lakh to Rs 5 lakh.
Sitharaman also said the government will enhance credit guarantee cover for MSMEs to improve their credit access. Besides, the government will introduce customised credit cards with Rs 5 lakh limit for micro-enterprises.
She said the Kisan Credit Cards would facilitate short-term loans for 7.7 crore farmers, fishermen, and dairy farmers. She added that term loan of up to Rs 20 crore will be provided to well-run export-oriented MSMEs.
India will launch a national mission on high-yielding seeds, Finance Minister Nirmala Sitharaman said on Saturday.
Presenting her 8th straight Budget, she also said a 'Makhana Board' will be established in Bihar to improve production and processing of fox nut.
The finance minister also said the government will bring enabling framework for sustaining harvest of fisheries sector in exclusive economic zones and high seas. She also announced a 5-year mission to promote cotton production.
Finance Minister Nirmala Sitharaman on Saturday said the Union Budget 2025-26 will initiate reforms in six areas of taxation, urban development, mining, financial sector, power and regulatory framework.
Presenting her eighth consecutive budget, she said the government's development track record of the past 10 years and structural reforms have drawn global attention.
A Viksit Bharat will have zero poverty, quality education, high-quality, affordable and comprehensive healthcare, she said and added that the budget's focus is to take everyone together on inclusive growth path.
Finance Minister Nirmala Sitharaman on Saturday made history as she presented a record eighth consecutive budget, which comes in the backdrop of slowdown in economy.
Presenting the budget, the finance minister outlined 10 key development measures in Budget 2025-26, focusing on poverty, youth, women, agriculture, manufacturing, MSMEs, employment, and inclusive growth.
All eyes are on potential income tax cuts or tweaks to ease the burden on the middle class, struggling with high prices and stagnant wages. Consumers hope for measures to lower household costs, while job seekers look for policies to spur employment.
The Budget for the fiscal year starting April 1 is expected to balance growth-boosting measures with fiscal prudence, focusing on consumption while narrowing the fiscal deficit.
Finance Minister Nirmala Sitharaman on Saturday announced PM Dhan Dhyan Krishi Yojana, covering 100 districts with low yields, modern crop intensity and below-average credit parameters.
Presenting her record eighth consecutive budget, she also said that the scheme would benefit 1.7 crore farmers.
She added the government will launch rural prosperity, and resilience programme focusing on youth, women and farmers.
Nafed (National Agricultural Cooperative Marketing Federation of India) and NCCF will procure pulses in the next four years.
The government will also roll out a 6-year programme for Atmanirbharta in pulses with a special focus on tur, urad, and masoor.
A comprehensive programme for raising vegetables, fruit production, and providing remunerative prices will also be launched, Sitharaman said.
President Droupadi Murmu on Friday said the government is working towards modernisation and self-reliance in the agriculture sector while focusing on boosting farmers' income.
Addressing the joint sitting of Parliament at the start of the Budget Session, Murmu highlighted that India achieved a record foodgrain production of 332 million tonnes in 2023-24.
Finance Minister Nirmala Sitharaman on Saturday said the Union Budget 2025-26 continues efforts to accelerate growth and provide inclusive development.
Presenting the 14th consecutive Budget under the Narendra Modi government since 2014, Sitharaman said, "Together we embark on journey to unlock our potential for greater prosperity."
She asserted that the Indian economy is fastest-growing among all developing economies. The finance minister said, "We see the next five years as unique opportunity to stimulate growth."
Finance Minister Nirmala Sitharaman, presenting the Union Budget 2025-26, stated that "Viksit Bharat" will encompass zero poverty, 100% quality education, and high-quality, affordable, and comprehensive healthcare.
Union Finance Minister Nirmala Sitharaman says, "Our economy is the fastest growing among all major economies. Our development track record for the past 10 years and structural reforms have drawn global attention. Confidence in India's capability and potential has only grown in this period. We see the next 5 years as a unique opportunity to realise sabka vikas, stimulating balanced growth of all regions."
VIDEO | Union Budget 2025: Finance Minister Nirmala Sitharaman (@nsitharaman) says, "Our economy is the fastest growing economy among all major economies. Our development track record for the past 10 years and structural reforms have drawn global attention."
— Press Trust of India (@PTI_News) February 1, 2025
(Source: Third… pic.twitter.com/TH2VKjDrdi
This bugdet continues efforts to accelerate growth and provide inclusive development, says FM Nirmala Sitharaman presenting Budget for FY26.
"In this Budget, the proposed development measures span 10 broad areas, focusing on poor, youth, annadata (farmer) and nari (women), spurring agricultural growth and productivity, building rural prosperity and resilience, and taking everyone together on an inclusive growth path, boosting manufacturing and further Make in India, supporting MSMEs, enabling employment-led development, investing in people, economy and innovation..." she said.
VIDEO | "In this Budget, the proposed development measures span 10 broad areas, focusing on poor, youth, annadata (farmer) and nari (women), spurring agricultural growth and productivity, building rural prosperity and resilience, and taking everyone together on an inclusive… pic.twitter.com/scVxd35iaa
— Press Trust of India (@PTI_News) February 1, 2025
Fiscal Deficit: The budgeted fiscal deficit, which is the difference between the government expenditure and income, for the current fiscal is estimated at 4.9% the GDP. As per the fiscal consolidation roadmap, the deficit is to be brought down to 4.5% of GDP in FY26.
Capital Expenditure: The government's planned capital expenditure for this fiscal year is budgeted at Rs 11.1 lakh crore. However, slower government spending in the first four months due to Lok Sabha elections delayed the capex cycle and the final numbers for the current fiscal are expected to be lower than budgeted. The capex momentum is expected to continue in the FY26 Budget as well.
Debt Roadmap: The finance minister, in her 2024-25 budget speech, had stated that from 2026-27 onwards the endeavour of fiscal policy would be to maintain the fiscal deficit in a way that the central government debt is on a declining path as a percentage of the GDP.
Markets would closely look for the debt consolidation roadmap from FY27 onwards to see when the finance minister sees general government debt-to-GDP fall to the 60% target. The general government debt-to-GDP ratio was 85% in 2024, which included central government debt of 57%.
Borrowing: The government's gross borrowing Budget was Rs 14.01 lakh crore in FY25. The government borrows from the market to fund its fiscal deficit. The borrowing number will be watched by the market, especially on the back of lower dividends from the RBI in FY26 compared to Rs 2.11 lakh crore in FY25.
Tax Revenue: The 2024-25 Budget had pegged gross tax revenue at Rs 38.40 lakh crore, an 11.72% growth over FY24. This includes Rs 22.07 lakh crore estimated to come from direct taxes (personal income tax + corporate tax), and Rs 16.33 lakh crore from indirect taxes (customs + excise duty + GST).
GST: Goods and Services Tax (GST) collection in 2024-25 is estimated to rise 11% to Rs 10.62 lakh crore. FY '26 GST revenue projections will be watched as the revenue growth has slowed over the last three months in the current fiscal.
Nominal GDP: India's nominal GDP growth (real GDP plus inflation) in FY25 is estimated to be 10.5%, while the Real GDP growth estimated by NSO is 6.4%. FY26 nominal GDP growth projections in the Budget will give an idea about the inflation trajectory in the next fiscal.
Dividend: The government estimated Rs 2.33 lakh crore from the RBI and financial institutions and Rs 56,260 crore from CPSEs as dividends in FY25. These two key non-tax revenue numbers will be looked for in FY26 Budget projections.
Disinvestment & Asset Monetisation: 'Miscellaneous Capital Receipts' -- which include proceeds from disinvestment and asset monetisation -- was pegged at Rs 50,000 crore in FY25 Budget. The FY26 Budget will give a number for next year and a broader asset monetisation roadmap.
Spotlight would also be on spending on key schemes like NREGA as well as key sectors like health and education.
The Union Cabinet headed by Prime Minister Narendra Modi on Saturday approved the Union Budget 2025-26.
Following this, Finance Minister Nirmala Sitharaman will present her eighth record budget in the Lok Sabha that comes in the backdrop of growth slowing down to four-year-low of 6.4% and clamour for tax relief amid moderation in consumption.
This is the second Budget of the BJP-led NDA government in its third term in office. Like in the past three years, this year's budget would also be in paperless form.
Finance Minister Nirmala Sitharaman on Saturday called on President Droupadi Murmu before presenting her record eighth Budget in the Lok Sabha. As per established tradition, the finance minister met the President at the Rashtrapati Bhavan before heading to Parliament.
President Murmu offered 'dahi-chini' (curd-sugar), considered auspicious, to Sitharaman before she left for Parliament to present the Union Budget.
"Union Minister for Finance and Corporate Affairs Smt Nirmala Sitharaman along with Minister of State for Finance Shri Pankaj Chaudhary and senior officials of the Ministry of Finance called on President Droupadi Murmu at Rashtrapati Bhavan before presenting the Union Budget. The President expressed best wishes to the Union Finance Minister and her team for the presentation of budget," President's office said in a post on X.
The golden era of globalisation probably disappearing amid geopolitical and policy uncertainties, resulting in the economic growth slowdown, Chief Economic Adviser V Anantha Nageswaran said on Friday.
India's economy is likely to expand by 6.3-6.8% in the coming fiscal, much lower than what is needed to become a developed country, and requires deregulation and reforms in areas like land and labour to stimulate growth, according to the government's pre-Budget Economic Survey.
"The era of globalisation is over...tailwind of globalisation is becoming more of a headwind...there is geopolitical and policy uncertainty both on the investment front and on the trade side, and the growth projections also reflect that," he told PTI in an interview.
Blaming external sector for the slowdown, Nageswaran said, "The golden era from 1980 onwards, which probably was until 2016 when you had era of globalisation where trade flow of as share of GDP went up, investment flows as percentage global GDP went up, poverty reduction happened, and there was free movement of goods and services and even people, but that is drawing to an end."
He, however, hoped that there could be other forces coming into play which could provide tailwind in the coming years. "Right now, we are in a state of flux that is what we have to take into account in our planning and in our policy framework for growth, which will take care of India's aspiration given this global environment," he said.
With a soothing sincerity, the Survey at the very outset confirms that growth is in a grim state and that it may not get any easier. Rather, we need to get stronger.
Accordingly, FY26 real GDP growth was pegged at a heart-sinking 6.3%-6.8%, barely better than FY25's projected 6.4%. One could argue that there's no need to be all grumpy. For, nothing good ever happens at zero, and India's estimated 6% plus growth should provide enough cheer.
But what actually rips a hole in the heart is that both the estimates for FY25 and FY26 make the much-needed 7-8% growth rate appear like a star so distant from Earth. This is crucial given India's ambition to emerge as a developed nation by 2047, for which we need 8% sustained growth every year for at least one full decade.
India's economy is likely to expand by 6.3-6.8% in the coming fiscal, much lower than what is needed to become a developed country, and requires deregulation and reforms in areas like land and labour to stimulate growth, according to the government's pre-Budget Economic Survey.
The state of the economy document indicated that India's world-beating growth is moderating and more needs to be done to achieve the near 8% annual rate needed to achieve the Viksit Bharat target by 2047.
The 6.3 % to 6.8% growth rate in 2025–26 compares to an estimated 6.4% growth in the current year ending March 31—the weakest since the pandemic—and 8.2% in the past 2023-24 financial year.
Analysts and experts expect some tax rationalisation, export push, better implementation of capital spending plans and clear roadmap on structural reforms. They also see some expansion in the production-linked incentives, and increased allocation to some welfare schemes while continuing focus on infrastructure creation/upgrade.
Also, tariff cuts to encourage local manufacturing are expected.
Increased allocations to boost job creation and skills, lower customs duties on intermediaries and increase in agriculture investments are also high on the list of expectations. Measures for accelerating domestic demand and private consumption are also expected.
They all agree on one thing - the government will continue on the path of fiscal consolidation, with a projected fiscal deficit of 4.5% of GDP for FY26 against 4.8% in the current fiscal ending March 31.
Finance Minister Nirmala Sitharaman on Saturday will present her eighth consecutive Budget, which she will deliver from a digital tablet enclosed in a traditional 'bahi-khata' style pouch.
This will take Sitharaman closer to the record of 10 budgets that were presented by former Prime Minister Morarji Desai over different time periods. Desai has presented a total of 6 budgets during his tenure as finance minister from 1959 to 1964, and 4 budgets between 1967 and 1969. Former finance ministers P Chidambaram and Pranab Mukherjee had presented nine and eight budgets, respectively, under different prime ministers.
Sitharaman, however, will continue to hold the record of presenting the maximum number of budgets on the trot - eight straight budgets under Prime Minister Narendra Modi.
Sitharaman, India's first full-time woman Finance Minister, broke away from the colonial tradition of carrying a Budget briefcase in July 2019, opting instead for a traditional 'bahi-khata', to carry the Union Budget papers. She continued this custom the following year, and in the pandemic-affected 2021, she replaced the traditional papers with a digital tablet to carry her speech and other Budget documents.
This tradition continues on Saturday.
Expectations of relief on income tax, particularly for lower middle class, is high after Prime Minister Narendra Modi invoked goddess of wealth for elevating poor and middle class.
"I pray to Goddess Lakshmi that the poor and the middle-class sections in the country are blessed by her," Modi said on Friday while speaking to reporters outside Parliament before the start of the Budget session.
Finance Minister Nirmala Sitharaman will present her record eighth consecutive Budget at 11 am today, as India awaits measures to revive sluggish economic growth.
All eyes are on potential income tax cuts or tweaks to ease the burden on the middle class, struggling with high prices and stagnant wages.
Consumers hope for measures to lower household costs, while job seekers look for policies to spur employment.
The Budget for the fiscal year starting April 1 is expected to balance growth-boosting measures with fiscal prudence, focusing on consumption while narrowing the fiscal deficit.