01/02/2026
The Union Budget 2025-2026, presented by Finance Minister Nirmala Sitharaman on February 1, 2025, focuses heavily on middle-class relief, MSME support, and agricultural productivity.
Here are the key highlights and takeaways:
1. Direct Tax Reforms (Personal Income Tax)
The major news for individual taxpayers is the revision of the New Tax Regime:
Exemption Limit: No income tax for individuals earning up to ₹12 lakh (the rebate was increased significantly). Combined with standard deductions, effective tax-free income can go up to ₹12.75 lakh.
Revised Tax Slabs (New Regime):
Up to ₹4 Lakh: NIL
₹4 Lakh – ₹8 Lakh: 5%
₹8 Lakh – ₹12 Lakh: 10%
₹12 Lakh – ₹16 Lakh: 15%
₹16 Lakh – ₹20 Lakh: 20%
₹20 Lakh – ₹24 Lakh: 25%
Above ₹24 Lakh: 30%
Standard Deduction: Increased for salaried employees and pensioners.
Other Reliefs: TDS on rent increased from ₹2.4 lakh to ₹6 lakh, and the TDS threshold on interest for senior citizens doubled to ₹1 lakh.
2. Support for MSMEs and Startups
Credit Guarantee: The credit guarantee cover for Micro and Small Enterprises was doubled from ₹5 crore to ₹10 crore.
Startup Incentives: Income tax exemptions for startups were extended to those incorporated until March 31, 2030.
MSME Classification: Investment and turnover limits for MSME classification have been significantly increased (up to 2.5x) to allow businesses to grow without losing benefits.
3. Agriculture and Rural Development
Prime Minister Dhan-Dhaanya Krishi Yojana: Focused on developing "Agri Districts" and enhancing agricultural productivity.
Kisan Credit Card (KCC): The loan limit under the interest subvention scheme was increased from ₹3 lakh to ₹5 lakh.
Storage: Plan to build post-harvest storage at the panchayat and block levels to reduce wastage.
4. Infrastructure and Urban Development
Capital Expenditure (Capex): Earmarked at ₹11.21 lakh crore (3.1% of GDP) to continue the push for world-class infrastructure.
Urban Challenge Fund: A ₹1 lakh crore fund announced to transform cities into "Growth Hubs."
Regional Connectivity: A modified UDAN scheme to connect 120 new destinations, including helipads in hilly and North-Eastern regions.
5. Economy and Strategic Sectors
Fiscal Deficit: Targeted at 4.4% of GDP for FY26 (down from 4.8% in FY25).
Insurance Sector: The FDI limit for insurance companies was raised from 74% to 100%, provided the entire premium is invested in India.
Nuclear Energy: A "Nuclear Energy Mission for Viksit Bharat" was launched with a focus on small modular reactors.
Customs Duty: Duties were reduced on 36 lifesaving drugs (cancer, chronic diseases) and critical minerals (lithium, cobalt) to boost manufacturing
