Finance Minister Nirmala Sitharaman presented the Union Budget for the 2025-26 financial year today, marking a significant milestone in her tenure as the first finance minister to deliver the budget for eight consecutive years. Ahead of her budget presentation, Sitharaman received a warm and traditional welcome from President Droupadi Murmu, who offered her the customary ‘dahi-cheeni’ (curd and sugar). This ritual, a longstanding custom, is believed to usher in good fortune and sweetness as the government prepares to unveil its financial roadmap for the year. The budget was anticipated to place a strong emphasis on fiscal discipline while introducing measures aimed at stimulating consumption, reflecting the government’s ongoing focus on economic stability and growth in the face of persistent challenges.
Read more: Government earmarks Rs 1,211 crore for publicity in 2025-26
Read more: Nikhil Kamath bets on Makhana, now FM gives the superfood a boost; reactions galore
Read more: High disposable income will boost AdEx, companies to increase ad budgets
FM Sitharaman began the Budget speech amid the opposition’s uproar. The FM highlighted that the Union Budget for 2025-26 reaffirms the government’s commitment to driving accelerated economic growth and reinforcing the foundations of inclusive development. As India continues to outpace other major economies, the budget aims to sustain this momentum, with a clear focus on empowering households, bolstering consumer sentiment, and strengthening the growing middle class. The government’s strategy remains centered on fostering broad-based prosperity, ensuring that the benefits of economic progress are felt by all sections of society.
Read more: Consumption is word of the day: Anupam Mittal, Radhika Gupta react to Budget 2025
“Our economy is the fastest-growing among all major global economies. Our development track record of 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 five years as a unique opportunity to realize ‘Sabka Vikas’, stimulating balanced growth of all regions,” says Union Finance Minister Nirmala Sitharaman during the Budget 2025 Speech.
Key Takeaways
The Finance Minister said the Budget aims at ‘transformative’ reforms in 6 areas including taxation, financial sector, power sector, urban development, mining, regulatory reforms.
New income tax bill next week: A new income tax bill is set to be introduced next week, adopting a “trust first, scrutinize later” approach.
TDS & TCS rationalisation with focus on middle class: The new income tax bill will retain nearly half of the existing provisions and introduce personal income tax reforms with a focus on the middle class. It will also rationalise the tax deducted at source (TDS) and tax collected at source (TCS) regime by reducing the number of rates and adjusting thresholds. The threshold limit for TCS on LRS remittances has been increased from ₹7 lakh to ₹10 lakh. The TDS threshold limit on rent has been raised to ₹6 lakh. It is proposed to remove TCS on education loans up to ₹10 lakh from specified financial institutions.
Timelimit to file updated tax returns extended: The deadline to file updated tax returns has been extended from 2 years to 4 years.
Personal income tax announcements bring relief: No income tax payable up to Rs 12 lakh under new income tax regime, says Finance Minister Nirmala Sitharaman. Sitharaman provided relief to individual taxpayers by raising the income tax rebate limit from Rs 7 lakh to Rs 12 lakh. This rebate applies to resident Indian taxpayers, ensuring that salaried individuals earning up to Rs 12.75 lakh will now be exempt from paying income tax. Additionally, the minister announced a revision of tax slabs under the new regime, offering a significant savings boost to the middle class.
New slabs: FM proposed to introduce the new income tax bill next week. With this revision, under the New Tax Regime (NTR) following are the revised tax slabs:
Rs0-4 lakh: NIL
Rs4-8 lakh: 5%
Rs8-12 lakh: 10%
Rs12 -16 lakh: 15%
Rs16-20 lakh: 20%
Rs20-24 lakh: 25%
Above Rs24 lakh: 30%
Benefit For Rs25 Lakh+ Salaried Persons: Persons with an annual income of Rs25 lakh will get a benefit of Rs1,10,000 in tax says Finance Minister.
Institute to be set up in Bihar for food processing: National institute of food tech to be established in Bihar to support entrepreneur, development and to enhance farmer income.
Makhana Board to be setup in Bihar: A Makhana board in Bihar will be established to improve production, processing value addition and marketing of the super food. The board will offer support and trade-related technologies while ensuring that farmers benefit from all relevant government schemes.
National Manufacturing Mission to further Make In India: Manufacturing mission to boost make in India across all industry sizes.
A new manufacturing mission under the Make in India initiative will support small, medium, and large industries through comprehensive policy backing and a detailed framework. The mission aims to create an ecosystem for solar PV cells, electrolysers, and grid-scale batteries. National Manufacturing Mission to support clean tech manufacturing to support domestic production of EV batteries, solar panels
5 National Centres of Excellence for skilling to equip youth: Five National Centres of Excellence for Skilling will be established to equip the youth with the necessary skills for global opportunities. The Finance Minister also promised global skilling partnerships to enable India to become a key player in global manufacturing. Additionally, infrastructure will be expanded in IITs set up after 2015, allowing for 6,500 more students across five IITs.
A Centre of Excellence for AI in Education will be established with an outlay of Rs 500 crore.
FoF contribution of ₹10,000 crore to be set up: New Fund of Funds (FoF) with fresh expanded scope & fresh contribution of ₹10,000 crore to be set up. FoF for startups received commitments for over ₹9 lakh crore.
New scheme announced for SC/ST women offering 5-year term loans: A new scheme has been launched to offer term loans with a five-year tenure, benefiting 5 lakh women from SC/ST communities.
India to become global hub for toys: Scheme to focus on manufacture of sustainable toys with a Made in India brand
For the toys sector, the government will implement a scheme to make India a global manufacturing hub.
MSMEs is the 2nd engine of growth, says FM. MSMEs responsible for 45% of our exports. Classification limit of MSMEs enhanced for them to boost their growth. For micro enterprises, customised credit cards to be issued: Credit guarantee cover will be enhanced from ₹5 crore to ₹10 crore for micro-enterprises leading to additional ₹1.5 lakh crore credit in next 5 years. To help achieve higher tech upgradation and better access to capital, investment and turnover limit for all MSMEs enhanced to 2.5 & 2X respectively.
Support to be given to MSMEs to tackle non-tariff barriers in exports: Export promotion mission to be jointly driven by Commerce Ministry, MSMEs. Bharat Trade Net to be set up as digital public infrastructure for trade facilitation and financing.
Government to establish Rs1 lakh crore urban challenge fund for growth hubs: The government will create a ₹1 lakh crore Urban Challenge Fund aimed at transforming cities into growth hubs. The fund will finance 25% of the cost of bankable projects, with an allocation of ₹10,000 crore for 2025-26. The remaining 50% will be funded through bonds, bank loans, and public-private partnerships (PPPs).
Gig workers to get social security scheme: Gig workers to be provided healthcare and will assist 1 crore gig workers. In a move aimed at formalising the gig economy, Sitharaman announced that the government will provide identity cards and registration for gig workers. The initiative is expected to enhance social security and streamline benefits for the country’s growing freelance and contractual workforce. Govt enhances support for gig workers with e-shram registration and insurance. The PM Swanidhi Scheme will be revamped with higher loan limits and the introduction of a Rs 30,000 UPI-linked credit card. The government will also facilitate identity card issuance and registration on the e-Shram portal for gig workers, providing insurance coverage for nearly 1 crore workers.
The modified UDAN scheme will be launched to connect 120 new destinations and cater to 4 crore passengers over the next 10 years. Additionally, greenfield airports will be facilitated in Bihar to support this expansion.
50,000 ATLs & broadband connectivity for government schools: 50.000 Atal Tinkering Laboratories (ATLs) will be set up in government schools in the next 5 years to foster scientific temper in young minds. Broadband connectivity is to be provided to all secondary school
Centre to provide guidance framework for states to boost GCCs: The government will offer a national guidance framework to help states promote Global Capability Centres (GCCs) and enhance their growth.
Deeptech fund of funds to be explored: A Deeptech Fund of Funds will be explored to support technological advancements, while 10,000 fellowships will be provided for tech research at IITs and IISc under the PM Research Fellowship Scheme. Over the next 5 years, the scheme will offer 10,000 scholarships to further tech innovation and research.
PM Gati Shakti data to be made available for private sector: PM Gati Shakti data will be made accessible to the private sector, and the development of the top 50 tourist destinations will be carried out in partnership with state governments. Hotels will also be included in the harmonised scheme for enhanced tourism infrastructure.
Mudra loans to be provided to homestays: Mudra loans to be provided to homestays, says FM. Medical tourism and ‘heal in India’ to be promoted in partnership with private sector.
Reactions
“The AI center of excellence for Education is a strong signal for integrating AI for both the educators and learners. This will unlock learning and raise the quality of education thereby improving employability,” Jaideep Kewalramani, COO and Head of Employability Business at TeamLease Edtech.
“An important step toward social security and financial empowerment in the unorganized sector has been taken with the redesign of the PM Swanidhi Scheme and the incorporation of gig workers into the e-Shram portal. By raising loan limits and offering a ₹30,000 UPI-linked credit card, the government is helping gig workers and independent contractors grow their businesses and add jobs. Additionally, providing nearly 1 crore workers with identity registration and insurance coverage will bring much-needed stability, encouraging more people to work as gig workers and promoting greater workforce formalization. By increasing the accessibility and sustainability of work opportunities, these policies will encourage entrepreneurship, accelerate the growth of MSME’s, and fortify India’s gig economy,” Sonal Arora, Country Manager, GI Group Holding