Union Budget 2025-26: Key Highlights

Today, the Union Bedget was presented by the Finance Minister Nirmala Sitharaman.

Here are the key highlights of Union Budget 2025-26:

Fiscal Deficit Targets

The government has set a fiscal deficit target of 4.8% for FY25, a step towards fiscal consolidation. For FY26, the fiscal deficit is projected to reduce further to 4.4%, reflecting the government’s commitment to improving fiscal health while balancing growth priorities. This signals a path towards reduced government borrowing and better economic stability in the long term.

Jan Vishwas Bill 2.0

A major legal reform announced in Budget 2025 is the Jan Vishwas Bill 2.0, which aims to decriminalize over 100 provisions across various sectors, making India more investment-friendly and efficient in its regulatory framework. The Bill aligns with the government’s vision of improving ease of doing business and reducing litigation in India. Additionally, an Investment Friendly Index of States is set to be launched in 2025, further enhancing the business environment and encouraging states to compete on investment attractiveness.

Revised Tariff Rates

In line with its commitment to trade liberalization and reducing import dependency, the government has proposed the removal of 7 additional tariff rates, further simplifying the customs structure. This move will bring the total number of tariff rates down to just 8 after the latest changes. The reduction in tariff rates is expected to reduce the cost of imports, promote efficiency, and improve the competitiveness of the domestic industry.

₹1.5 Lakh Crore for States’ Capex and Infrastructure

Recognizing the need for robust infrastructure to drive economic growth, Finance Minister Sitharaman announced an outlay of ₹1.5 lakh crore for 50-year interest-free loans to states, aimed at funding capital expenditure (capex) and infrastructure development. This initiative will provide states with the resources they need to invest in critical infrastructure projects, ensuring long-term economic benefits and job creation across the country.

Relief for Healthcare: Exemption on Life-Saving Drugs

In a significant move to improve healthcare access, the Budget 2025 announced that 36 life-saving drugs and medicineswill be fully exempted from basic customs duties. This measure will lower the cost of essential medications, especially for critical diseases, ensuring more affordable access to life-saving treatments for millions of people.

No income tax would be payable up to income of Rs 12 lakh

Finance Minister Nirmala Sitharaman, presenting the first full Budget of Modi 3.0, announced major changes in the income tax slabs. In major relief for the middle class, the Finance Minister said that no income tax would be payable up to income of Rs 12 lakh. Besides this, there was also big announcements on the TDS front, where the annual limit on rent was raised from Rs 2.40 lakh to Rs 6 lakh, benefiting small taxpayers receiving smaller payments.

Here’s how the new income tax slabs look like now:

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