Budget 2025 Highlights: From Tax Exemption Upto Rs. 12 Lakh to Growth Boost; 10 Key Announcement By FM

The Union Budget 2025 presentation Ended with Finance Minister Nirmala Sitharaman providing significant relief to the middle class by increasing the income tax exemption limit to Rs. 12 lakh per year. This major announcement will ease the financial burden on taxpayers, and stimulate economic growth by enhancing consumer spending.

With this new exemption limit, individuals earning up to Rs. 12 lakh annually will no longer have to pay income tax. This announcement has been welcomed by the common man of India , salaried individuals, small business owners, and professionals, as it provides more breathing room for financial planning and investments.

Apart from this tax relief, the Union Budget 2025 included several other key announcements spanning various sectors. Here are the 10 Major Highlights from Union Budget 2025

1. Income Tax Relief

• No income tax for individuals earning up to Rs.12 lakh per annum, benefiting millions of taxpayers.
• For the salaried class, no tax is applicable on annual income up to Rs.12.75 lakh, thanks to the Rs.75,000 standard deduction.
• A taxpayer earning Rs.12 lakh in the new tax regime will save Rs.80,000 in tax, as the entire amount is now exempt.

2. Higher Capital Expenditure (Capex) Allocation

The capital expenditure budget for FY25 has been set at Rs.11.1 lakh crore, with a strong focus on infrastructure, roads, railways, and urban development projects.

3. Relief for Senior Citizens

• No tax on withdrawals from the National Savings Scheme (NSS) for senior citizens, ensuring greater financial security.
• The tax deduction limit on interest income for senior citizens has been doubled from ₹50,000 to ₹1 lakh.

4. Boost to MSMEs & Startups

• Special tax benefits and credit support for MSMEs and startups to encourage innovation and job creation.
• Credit Guarantee Cover for Micro and Small Enterprises raised from ₹5 crore to ₹10 crore, unlocking ₹1.5 lakh crore in additional credit over the next 5 years.
• Startups to benefit from enhanced credit guarantee cover, raised from ₹10 crore to ₹20 crore, with the guarantee fee reduced to 1% for key sectors under Atmanirbhar Bharat.

5. Healthcare Expansion

• Daycare cancer centers to be established in all district hospitals, improving access to critical treatments.
• 36 new life-saving medicines to be fully exempted from GST and customs duty, making essential treatments more affordable.

6. Agriculture & Rural Development

• Kisan Credit Cards (KCC) will now cover 7.7 crore farmers, fishermen, and dairy farmers.
• Loan limit for KCC increased from ₹3 lakh to ₹5 lakh under the Modified Interest Subvention Scheme.
• 'Prime Minister Dhan-Dhaanya Krishi Yojana' launched to support 100 districts with low crop productivity, benefiting 1.7 crore farmers.
• Mission for Aatmanirbharta in Pulses introduced to increase domestic production of Tur, Urad, and Masoor dal, with a focus on climate-resilient seeds.
• Makhana Board to be established in Bihar for improving production, processing, and marketing of makhana.
• National Mission on High Yielding Seeds and Mission for Cotton Productivity launched to benefit lakhs of cotton farmers.

7. Credit & Loan Reforms for MSMEs and Exporters

Micro & Small Enterprises:

• Credit Guarantee Cover increased from ₹5 crore to ₹10 crore, unlocking ₹1.5 lakh crore in additional credit over the next five years.

Startups:

• Credit guarantee cover raised from ₹10 crore to ₹20 crore, with reduced 1% guarantee fees for loans in 27 key focus sectors.

Exporters (MSMEs):

• Term loan limit for exporter MSMEs increased to ₹20 crore to support international trade.

8. Direct & Indirect Taxation Reforms

Indirect Taxation:

Customs Duty Simplification:

• 7 tariff rates removed to simplify the tax structure.
• Social Welfare Surcharge exemption on 82 tariff lines to reduce tax burden on key industries.

Healthcare Relief:

• 36 life-saving medicines added to the GST exemption list.
• 6 additional medicines to be taxed at a concessional 5% customs duty.

Direct Taxation:

New Income Tax Bill to be introduced, reducing complexity by cutting 50% of existing text. The bill aims to simplify tax compliance and reduce litigation.

9. Introduction of New Income Tax Bill

• A new income tax bill will be introduced during the Budget Session.
• The bill will be simplified, with 50% fewer chapters and words, making it easier to understand for taxpayers and administrators.
• The objective is to increase tax certainty and reduce litigation.

10. Boost For the Tourism Sector

The Finance minister announced that the government will collaborate with states to develop the top 50 tourist destinations Additionally, intensive skill-building programs will be organized for the youth, including at Institutes of Hospitality Management, to enhance employment opportunities in the tourism and hospitality sectors. Furthermore e-visa facilities have been introduced to make it easier for international tourists to visit India which will help make India a global tourism hub.