New Regime Tax Slabs
Rs. 0-4 lakh	Nil
Rs. 8-12 lakh	10 percent
Rs.  16-20 lakh	20 percent
Rs.  20-24 lakh	25 percent
Above Rs.  24 lakh	30 percent

New Delhi: Union Finance Minister Nirmala Sitharaman presented the Union Budget 2025, her eighth consecutive one in Parliament this morning. This accomplishment has set a new benchmark for continuity in India’s financial planning.

This is also the Narendra Modi Government’s first full-year Budget in the third term and was presented against the backdrop of geopolitical uncertainties and slowing of the economic growth rate to a four-year low.

In her Budget speech, Nirmala Sitharaman raised the limit of income tax rebate from Rs. 7 lakh to Rs. 12 lakh, which essentially means that if an individual has an income of up to Rs. 12 lakh, the individual will have zero tax liability. Add to it the standard deduction of Rs. 75,000 and taxpayers with up to Rs. 12.75 lakh annual income will have to pay zero tax.

The rebate is only applicable to those earning up to Rs. 12 lakh. If your taxable income is even a rupee more than Rs. 12 lakh, you will have to pay taxes as per the slab rates under the new tax regime. Earlier, those earning up to Rs. 12 lakh paid a tax of Rs. 80,000 under the new tax regime.

This means that if your taxable income is, say, Rs. 12.1 lakh, your tax liability would be Rs. 61,500. This is because, if your income is above Rs. 12 lakh you will have to pay a tax of 5 percent on income between Rs. 4 lakh to 8 lakh; 10 percent on income between Rs. 8 lakh to Rs. 12 lakh and 15 percent between Rs. 12 lakh to Rs. 16 lakh.

The Finance Minister said that the middle class provides strength for India’s growth. “This Government under the leadership of Prime Minister Narendra Modi has always believed in the admirable energy and ability of the middle class in nation-building. In recognition of their contribution, we have periodically reduced their tax burden,” Nirmala Sitharaman said.

Cut from 2014 to 2025

Nirmala Sitharaman said that right after 2014 the Nil tax slab was raised to Rs 2.5 lakh which was further raised to Rs. 5 lakh in 2019 and to Rs. 7 lakh in 2023. “This is reflective of our Government’s trust in middle-class taxpayers,” Sitharaman said. The Government will forgo Rs. 1 lakh crore in direct taxes, Rs. 2,600 crore in indirect taxes on account of changes in tax rates.

The new structure will substantially reduce taxes on the middle class and leave more money in their hands, boosting household consumption, savings and investment, the Government said. This announcement was accompanied by loud cheers and enthusiastic thumping of desks by BJP MPs, led by Prime Minister Narendra Modi.

Besides this, there were 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.

The Finance Minister said this Budget continues the Government’s efforts to accelerate growth and secure inclusive development. It aims to invigorate private sector investments, uplift household sentiments and bolster the power of India’s rising middle class, she said.

New Income Tax Bill

A new Income Tax Bill – a direct tax code meant to simplify compliance for individual taxpayers – will be introduced next week, Nirmala Sitharaman said. The new law, she said, would be “simple to understand” and also lead to lower tax litigation.

The new Income Tax Bill is crafted with clarity and simplicity in mind, ensuring it is easy to understand for both taxpayers and tax administrators. By using direct language, it aims to reduce confusion and make the tax process more accessible and user-friendly for everyone involved, she added.

The Government will provide Rs. 20,000 crore for promoting innovation in partnership with the private sector. Nirmala Sitharaman also said the Government will launch an export promotion mission with the specified target for easy credit access and a national framework for promoting global capability centres in emerging Tier-II cities

Fiscal deficit

The Finance Minister stated that the Government aims to maintain the fiscal deficit each year in a manner that ensures Central Government debt remains on a declining trajectory as a percentage of GDP.

The revised estimate for total expenditure is Rs. 47.16 lakh crore, including a capital expenditure of Rs. 10.1 lakh crore.

Budget 2025 – highlights

• Benefits to startups to continue for 5 years since inception.
• Limit for tax deduction for senior citizens to be doubled to Rs. 1 lakh.
• India Post to be turned into large logistic body with 1.5 lakh rural post offices.
• Udan scheme to connect 120 more destinations.
• Annual limit of Rs 2.4 lakh for TDS on rent raised to Rs. 6 lakh.
• Centre for Excellence in AI for education with an outlay of Rs. 500 cr.
• 6 life-saving drugs to have 5 percent duty.
• 36 life-saving drugs and medicines fully exempted from basic custom duty.
• 5 national centres for skilling to boost Make In India.
• Credit guarantee cover to be enhanced for MSMEs and start-ups.
• New scheme for 5 lakh SC/ST women entrepreneurs.
• New central KYC registry.
• FDI limit for the insurance sector to be raised to 100 percent.
• Over 100 new places to get regional airports in the next 10 years.
• ‘Nuclear Energy Mission For R&D’
• Rs. 15,000 cr. funds for quick completion of 1 lakh housing units.
• 10,000 seats to be added in medical colleges.
• Jal Jeevan Mission to be extended till 2028.
• Additional infrastructure in IITs to increase number of students.
• Term loan of Rs 2 crore for women, first-time entrepreneurs from SC/ST, backward classes
• Loan limit raised to Rs 5 lakh from Rs 3 lakh in Kisan Credit Card.
• 6-year mission to achieve “Atmanirbharta” in oil seeds.
• Day Care Cancer Centres in all District Hospitals
• Internet connectivity for all Govt. Schools, Hospitals
• 10,000 additional seats to be added in Medical Colleges
• ‘Heal in India’ campaign will be launched

WHAT IS cheaper

• Mobile phones, chargers, PCB circuits
• 36 Lifesaving drugs and medicines
• EV batteries
• Frozen Fish Paste
• Wet Blue leather             
• Carrier-grade ethernet switches
• 12 critical minerals
• Open Cells of LCD/LED TVs
• Marine products
• Cobalt products
• Scrap of lithium-ion battery, Lead, Zinc and 12 more critical minerals.

WHAT IS COSTLIER

• Flat panel display
• Knitted fabrics