Union Budget 2025-26
05-02-2025
The Union Budget 2025, presented by Finance Minister Nirmala Sitharaman, introduces several key measures aimed at stimulating economic growth, providing tax relief to the middle class, and bolstering various sectors.
Taxation Reforms:
- Increased Tax Exemption Limit: The income tax exemption threshold has been raised to ₹12 lakh under the new tax regime, offering significant relief to middle-class taxpayers.
- Revised Tax Slabs: Income above ₹12 lakh will be taxed according to the revamped tax slabs, while the old tax regime’s rates remain unchanged.
- TDS and TCS Adjustments: The limit for Tax Deducted at Source (TDS) on interest for senior citizens has been doubled from ₹50,000 to ₹1 lakh. Additionally, the annual limit for TDS on rent has increased from ₹2.4 lakh to ₹6 lakh.
Note:–
- Threshold Increase: The exemption limit has been raised from ₹7 lakh to ₹12 lakh under the new tax regime.
- Simplification: The number of slabs has been reduced for better compliance.
- Default Regime: The new tax regime continues as the default, but taxpayers can opt for the old regime if preferred.
Agriculture and Rural Development:
- Enhanced Agricultural Spending: The government plans to increase agricultural spending by over 15%, marking the largest increase in six years. This boost aims to develop high-yielding variety seeds, improve storage and supply infrastructure, and enhance the production of pulses, oilseeds, vegetables, and dairy products.
- Prime Minister Dhan-Dhaanya Krishi Yojana: A new scheme introduced to support farmers, including enhanced credit through the Kisan Credit Card (KCC), facilitating short-term loans of up to ₹5 lakh for 7.7 crore farmers, fishermen, and dairy farmers
Science, Innovation, and Research:
- Research and Development Allocation: An allocation of ₹20,000 crore has been made to implement a private sector-driven research, development, and innovation initiative.
- PM Research Fellowship: The government will provide 10,000 fellowships for technological research in IITs and IISc to foster innovation and research excellence.
Export Promotion and Industry Support:
- Incentives for Electronics and EVs: Exemptions will be granted for open cells used in LED/LCD TVs, looms for textiles, and capital goods for lithium-ion batteries used in mobile phones and electric vehicles, aiming to boost manufacturing and exports.
- Leather Goods Promotion: Wet blue leather will be fully exempted from basic customs duties to promote domestic consumption and enhance exports.
Fiscal Management:
- Fiscal Deficit Target: The government targets a fiscal deficit of 4.4% of GDP for the fiscal year 2025-26, down from the revised 4.8% for the current year. This move aims to balance fiscal prudence with economic support.
These initiatives reflect the government’s commitment to fostering economic growth, supporting various sectors, and providing relief to taxpayers.
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