The Union Budget 2025-26 introduces bold economic reforms, tax benefits, and growth-oriented initiatives across key sectors. From revised income tax slabs to increased infrastructure spending, the budget is designed to boost economic expansion, encourage domestic manufacturing, and enhance social welfare programs.
1. Revised Income Tax Slabs
One of the major announcements in Budget 2025-26 is the new income tax slab structure, aimed at providing relief to taxpayers and simplifying tax compliance.
New Tax Slabs (FY 2025-26)
| Income Range (₹) | Tax Rate (%) |
|---|---|
| Up to ₹4 lakh | Nil |
| ₹4 lakh – ₹8 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% |
📌 Zero Tax Liability: Individuals earning up to ₹12 lakh will not pay any income tax under exemptions. For salaried professionals, this limit extends to ₹13.7 lakh considering deductions under the National Pension System (NPS) and standard deduction benefits.
2. Sectoral Allocations and Development Initiatives
Agriculture & Rural Development
- The Kisan Credit Limit has been increased from ₹3 lakh to ₹5 lakh to enhance financial support for farmers.
- Additional investments in smart irrigation projects and agri-tech adoption will modernize farming practices.
MSME & Startup Support
- Credit Guarantee for MSMEs raised from ₹10 crore to ₹20 crore to boost small business growth.
- Export incentives for MSMEs, aiming to increase their contribution beyond 45% of India’s exports.
Healthcare & Medical Education
- 10,000 additional medical education seats to strengthen the healthcare workforce.
- Day-care cancer treatment centers to be set up in every district for affordable cancer care.
Infrastructure & Urban Development
- Launch of Indian Infrastructure Project Development Fund to support major projects.
- The Jal Jeevan Mission targets universal tap water connections by 2028.
Energy & Sustainability
- Nuclear Energy Mission set to achieve 100 GW capacity by 2047 with ₹20,000 crore allocated for small modular reactors.
- Green Hydrogen Policy incentives to promote clean energy adoption.
3. Boosting ‘Make in India’ & Digital Economy
- Strengthening the toy manufacturing sector to reduce imports and promote local production.
- ₹500 crore investment for infrastructure in five IITs and the establishment of a Centre of Excellence for Artificial Intelligence.
- Ease of doing business reforms to streamline compliance for new businesses.
4. Tax Reforms & Fiscal Policies
- Standard Deduction increased to ₹75,000, benefiting salaried taxpayers.
- TDS on rent threshold raised to ₹6 lakh, reducing tax burdens on landlords.
- TCS exemption on education loans up to ₹10 lakh for higher studies abroad.
📊 Fiscal Deficit Target:
- Projected at 4.4% of GDP for FY 2025-26.
- Revised capital expenditure stands at ₹10.18 lakh crore to support economic expansion.
5. Impact on Investors & Economy
✔️ Stock Market & Investments: Higher capital allocation in infrastructure, MSMEs, and energy will drive economic growth and create new investment opportunities.
✔️ Job Creation: Increased spending on manufacturing and startups will open up employment opportunities in multiple sectors.
✔️ FDI & Global Trade: With liberalized trade policies, India aims to attract higher foreign direct investments (FDI).
The Union Budget 2025-26 lays a strong foundation for economic growth, taxpayer relief, and sectoral development. By boosting infrastructure, strengthening MSMEs, and enhancing social security, the budget aims to create a prosperous and self-reliant India.