Union Budget 2025-26: Detailed Breakdown of Key Proposals and Allocations
Finance Minister Nirmala Sitharaman presented the Union Budget 2025-26, outlining a total expenditure of Rs 50,65,345 crore, a 7.4% increase over the revised estimate of Rs 47.16 lakh crore for 2024-25. The budget focused on tax relief for the middle class, infrastructure development, and support for key sectors.
Tax Relief for the Middle Class:
Significant changes were made to the income tax regime. Individuals with an annual income of Rs 24 lakh or more can now save up to Rs 1.10 lakh in income tax. Those earning up to Rs 12 lakh will have no tax liability under the new regime. The standard deduction of Rs 75,000 for salaried individuals raises the no-tax limit to Rs 12.75 lakh. A new Income Tax Bill, replacing the 1961 act, will be introduced in Parliament.
The new tax regime slabs are as follows:
* Up to Rs 4 lakh: 0%
* Rs 4-8 lakh: 5%
* Rs 8-12 lakh: 10%
* Rs 12-16 lakh: 15%
* Rs 16-20 lakh: 20%
* Rs 20-24 lakh: 25%
* Above Rs 24 lakh: 30%
Benefits for Senior Citizens:
* TDS limit on interest income doubled from Rs 50,000 to Rs 1 lakh.
* TDS limit on rent increased from Rs 2.40 lakh to Rs 6 lakh.
* Withdrawals from National Savings Scheme (NSS) accounts on or after August 29, 2024, will be tax-exempt.
* The Atal Vayo Abhyuday Yojana (AVYAY) for senior citizen welfare received Rs 289.69 crore.
Key Sectoral Announcements and Allocations:
* Insurance: FDI limit increased from 74% to 100% for companies investing the entire premium in India. Existing regulations will be reviewed and simplified.
* Infrastructure: A maritime development fund with Rs 25,000 crore will be established. NABFID will set up a partial credit enhancement facility for infrastructure bonds.
* Tourism: Top 50 tourist destinations will be developed with PLI-linked incentives for states. MUDRA loans will be provided for homestays. Medical tourism and "Heal in India" will be promoted through public-private partnerships.
* Research & Development: Rs 20,000 crore allocated to implement private sector R&D and innovation. A new Deeptech fund-of-funds is being explored.
* Nuclear Energy: Plans to develop at least 100 GW of nuclear capacity by 2047. A Nuclear Energy Mission for small modular reactors (SMRs) will be set up with a Rs 20,000 crore outlay. Five SMRs are targeted for operation by 2033. Amendments to the Atomic Energy Act and Civil Liability to Nuclear Energy Act will be made to facilitate private sector partnerships.
* Aviation: The UDAN scheme will be modified to connect 120 new destinations over the next 10 years, potentially benefiting four crore additional passengers. The scheme will cover helipad operations in hilly regions and the North East, and greenfield operations in Bihar.
* Manufacturing: A National Manufacturing Mission will be established, covering small, medium, and large industries, and supporting clean tech. This includes building an ecosystem for solar cells, EV batteries, and high-voltage transmission equipment. The Make in India initiative will be expanded. Basic customs duty (BCD) lowered on open cells and carrier-grade Ethernet switches, while BCD on flat panel displays doubled. 25 additional capital goods for EV battery manufacturing and 28 goods for mobile phone battery manufacturing proposed to be added. Time limit for foreign origin railway goods imported for repairs extended.
* MSMEs: Over 1 crore MSMEs currently employ 7.5 crore people. Credit cover will be enhanced, with loan limits increased from Rs 5 crore to Rs 10 crore for micro and small enterprises, and up to Rs 20 crore for well-run exporter MSMEs. For startups, the limit will be Rs 10 crore. A new scheme will provide term loans of up to Rs 2 crore for 5 lakh SC/ST and women first-time entrepreneurs.
* Agriculture: Kisan Credit Card loan limit increased from Rs 3 lakh to Rs 5 lakh. Framework for sustainable harnessing of fisheries will be implemented.
* Education: 50,000 Atal Tinkering Labs will be established. The Bharatiya Bhasha Pustak scheme will be implemented. Broadband connectivity will be provided to all government secondary schools. Capacity expansion in IITs will add 6,500 seats. A Centre of Excellence in Artificial Intelligence will be set up with Rs 100 crore. 100% seats increased in UG and PG medical, aiming to add 75,000 more seats in 5 years and 10,000 more next year. Five National Centres of Excellence for skilling will be established.
* Healthcare: Daycare cancer centers will be established in all district hospitals in the next three years, with 200 centers in 2025-26. Exemption of Basic Customs Duty on 36 life-saving drugs, 37 more medicines, and 13 new patient assistance programs.
* Drinking Water & Sanitation: Rs 74,226 crore allocated, primarily for the Jal Jeevan Mission, which will be extended to 2028 with an enhanced outlay.
* Social Justice: Increased budget allocation for the Department of Social Justice and Empowerment (Rs 13,611 crore) and for disability welfare (Rs 1,275 crore). Saksham Anganvadi and Poshan 2.0 program will provide nutritional support. A scheme for the socio-economic upliftment of urban workers will be set up. Social Security Scheme for welfare of online platform workers.
* Fiscal Deficit: Targeted at 4.8% of GDP in FY25 and 4.4% in FY26. FY25 total receipts at Rs 31.47 lakh crore, net tax receipts at Rs 25.5 lakh crore. FY26 total receipts at Rs 34.96 lakh crore, net tax receipts at Rs 28.37 lakh crore.
* Capital Expenditure: Remains a priority at Rs 10.18 lakh crore in FY25, with no reduction planned.
* PM Gati Shakti: Data from the initiative will be shared with the private sector.
* Bharat Trade Net: A platform will be set up for trade documentation and financing solutions.
* Land Records: The National geospatial mission will work towards modernizing land records.
* Urban Development: An Urban Challenge Fund of Rs 1 lakh crore will be set up.
The budget emphasizes growth, particularly through capital expenditure and support for manufacturing and infrastructure. The focus on tax relief and social sector schemes aims to boost consumption and improve the lives of citizens. The Budget Session will continue in two phases, with the second phase from March 10 to April 4.
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