Union Budget 2025-26: Summary of Union Budget 2025 Major Tax Reliefs and Key Announcements

New Delhi, Feb 1, 2025 – Union Finance Minister Nirmala Sitharaman presented the much-awaited Union Budget 2025-26 in Parliament on Saturday, bringing significant tax relief for the middle class while boosting investments in infrastructure, agriculture, and digital transformation.

One of the most striking announcements was the expansion of the tax exemption limit, which is set to benefit around one crore more taxpayers, ensuring that individuals earning up to ₹12 lakh annually will pay no income tax. The finance minister also announced a new Income Tax Bi jill to replace the existing Income Tax Act of 1961, signaling major structural reforms in India’s taxation system.

The total expenditure for 2025-26 is estimated at ₹50.65 lakh crore, reflecting a 7.4% increase compared to the 2024-25 revised estimate of ₹47.16 lakh crore.

Prime Minister Narendra Modi called it a “people’s budget”, stating that it will enhance disposable income, fuel consumption, and drive economic growth.

The total expenditure for 2025-26 is estimated at ₹50.65 lakh crore, reflecting a 7.4% increase compared to the 2024-25 revised estimate of ₹47.16 lakh crore.Prime Minister Narendra Modi called it a “people’s budget”, stating that it will enhance disposable income, fuel consumption, and drive economic growth.

2. Growth in Public Expenditure and Fiscal Management

Total government expenditure set at ₹50.65 lakh crore, a 7.4% increase over the previous year.

Revised fiscal deficit target: 5.3% of GDP, with a commitment to reduce it below 4.5% by FY27.

3. Infrastructure and Development

₹12 lakh crore allocated for infrastructure development, focusing on roads, railways, and urban expansion.

Expansion of high-speed rail networks and additional investments in Metro projects across multiple cities.

₹2 lakh crore investment in affordable housing projects, benefiting millions of middle and lower-income families.

4. Boost to Agriculture and Rural Development PM Kisan Samman Nidhi Yojana revised, increasing annual benefits to ₹8,000 per farmer.

₹3.5 lakh crore allocated for rural infrastructure and ₹1 lakh crore for irrigation projects to strengthen agricultural productivity.

Zero-interest loans for small farmers and expanded crop insurance coverage

5. Digital and AI Revolution

₹50,000 crore allocated for AI research and the promotion of Made-in-India AI innovations.

Establishment of a National AI Research Center to drive technology-led economic growth.

Enhanced digital payment infrastructure with tax benefits for MSMEs using digital transactions.

6. Healthcare and Social Welfare

₹1.8 lakh crore allocated for healthcare, including expansion of Ayushman Bharat to cover more beneficiaries.

₹25,000 crore for building new AIIMS-like hospitals and modernizing public healthcare centres.

Increased budget for women’s welfare schemes, with a ₹75,000 crore allocation for maternal and child health.

7. Green Energy and Sustainability

₹4 lakh crore investment in green energy projects, including solar, wind, and hydrogen energy production.

Incentives for EV manufacturers and subsidies for consumers buying electric vehicles (EVs).

50% reduction in import duties on components used for solar panels and storage battery systems.

8. Employment and MSME Support

₹3 lakh crore credit guarantee scheme to support MSMEs and encourage job creation.

Special incentives for startups, with tax breaks and reduced compliance requirements.

Government to hire 10 lakh new employees under various schemes in FY26.

9. Defense and National Security

₹6.5 lakh crore allocated for defence, with a focus on modernization of the armed forces.

Increased investment in indigenous defense production under Atmanirbhar Bharat initiative.

10. Education and Skill Development

₹1.25 lakh crore for education, including the launch of 500 new model schools under PM Schools for Excellence.

Expansion of National Skill Development programs, with ₹30,000 crore dedicated to vocational training and employment.

Government’s Vision for Economic Growth The government aims to boost economic growth while maintaining fiscal prudence. The new tax benefits are expected to increase disposable income, leading to higher consumer spending and investment in financial markets.

By focusing on infrastructure, digital economy, green energy, and employment, the budget positions India as a global economic powerhouse in the coming years.

Reactions to the Budget
PM Narendra Modi: “A budget that strengthens India’s economic resilience and empowers every citizen.”
Industry Experts: Positive reactions from business leaders and economists, calling it a growth-oriented and inclusive budget.
Opposition Parties: Criticized the government for not reducing fuel taxes and not increasing spending on social welfare programs.

Conclusion: The Union Budget 2025-26 strikes a balance between fiscal discipline and economic expansion, providing much-needed tax relief to individuals while boosting infrastructure, healthcare, and digital transformation. With a focus on sustainable growth, employment, and innovation, this budget lays a strong foundation for India’s economic future.

Disclaimer: This article is for informational purposes only and is based on publicly available data from the Union Budget 2025-26. The information provided herein does not constitute financial, tax, or investment advice. Readers are advised to consult professional financial advisors or government sources for specific guidance related to taxation, investments, or policy impacts. While every effort has been made to ensure accuracy, we do not guarantee the completeness or reliability of the information presented. The views and reactions mentioned in the article are based on publicly reported statements and may not reflect the opinions of all stakeholders.