Budget 2025 – A Detailed Analysis and Its Impact on the Common People
Finance Minister Nirmala Sitharaman presented the Union Budget 2025-26, focusing on India's long-term economic growth, in line with the "Viksit Bharat (Developed India) 2047" vision. This budget brings income tax relief for the middle class, support for MSMEs and agriculture, investment in infrastructure, and export growth initiatives.
The 2025-26 budget revolves around four key economic drivers:
- Agriculture & Rural Development – Strengthening farmers and rural communities through financial and infrastructure support.
- MSMEs & Manufacturing – Empowering small businesses with credit access and incentives.
- Investment & Infrastructure – Encouraging capital expenditure for long-term economic growth.
- Exports & Global Trade – Boosting India’s position in the global market.
1. Income Tax Relief – A Big Announcement for the Middle Class
To provide relief to the middle class, the government has increased the tax-free income limit to ₹12 lakh (₹12.75 lakh for salaried individuals).
New Income Tax Slab for FY 2025-26
Annual Income (₹) | Tax Rate (%) |
0 - 4,00,000 | 0% (Tax-Free) |
4,00,001 - 8,00,000 | 5% |
8,00,001 - 12,00,000 | 10% |
12,00,001 - 16,00,000 | 15% |
16,00,001 - 20,00,000 | 20% |
20,00,001 - 24,00,000 | 25% |
Above 24,00,001 | 30% |
This tax relief is only applicable to taxpayers opting for the New Tax Regime, gradually phasing out the old regime.
2. Tax Reforms and TDS/TCS Changes
TDS/TCS Modifications:
- TDS Exemption:
- TDS deduction limit on rental income increased from ₹2.4 lakh to ₹6 lakh.
- Senior citizens’ interest income tax-free limit raised from ₹50,000 to ₹1 lakh.
- RBI's Liberalized Remittance Scheme (LRS):
- TCS exemption increased from ₹7 lakh to ₹10 lakh on foreign remittances.
Corporate and Investment Tax Reforms
- Increase in Foreign Direct Investment (FDI) in the Insurance Sector from 74% to 100%.
- Tax exemptions for startups and MSMEs.
- Tax-free investment schemes for infrastructure extended till 2030.
3. Fiscal Policy and Budget Estimates
Fiscal Deficit Targets
- 2024-25 (Revised Estimate) – 4.8% of GDP
- 2025-26 (Budget Estimate) – 4.4% of GDP
Government Revenue and Expenditure
- 2024-25 total tax revenue: ₹31.47 lakh crore
- 2025-26 estimated tax revenue: ₹34.96 lakh crore (11% growth)
- 2025-26 total government expenditure: ₹50.65 lakh crore (7% growth)
4. Agriculture & Rural Development
The government has introduced new schemes to support farmers and improve rural infrastructure:
- PM Dhan-Dhanya Agriculture Scheme – Focus on irrigation, storage, and financing for 100 low-productivity districts.
- Self-Reliant Pulses Production Mission – Increase domestic production of tur, urad, and masoor dal over the next six years.
- Cotton Productivity Mission – A five-year initiative to improve high-quality cotton production.
- Kisan Credit Card (KCC) loan limit increased from ₹3 lakh to ₹5 lakh.
5. MSMEs and Startup Support
The MSME sector, a key driver of India's economy, has received strong financial backing:
- Micro and Small Enterprise credit limit raised to ₹10 crore.
- MSMEs to receive term loans up to ₹20 crore for export growth.
- Startups to benefit from ₹10,000 crore Fund of Funds.
6. Investment & Infrastructure Development
- PPP (Public-Private Partnership) Infrastructure Projects – Ministries must plan 3-year PPP projects for better implementation.
- Nuclear Energy Mission – 100 GW capacity target by 2047.
- Jal Jeevan Mission – 100% rural household water supply by 2028.
7. Boosting Exports & Global Trade
The government has introduced new initiatives to increase India’s global trade footprint:
- BharatTradeNet (BTN): A digital infrastructure for trade financing & documentation.
- Global Supply Chain Integration: Focus on boosting electronics, semiconductors, and advanced manufacturing.
Impact of Budget 2025 on the Common People
1. Relief for the Middle Class
Increasing the tax-free income limit to ₹12 lakh will boost disposable income and improve purchasing power.
2. Growth in MSMEs & Small Businesses
Higher credit limits and tax relief will empower MSMEs and startups to expand operations.
3. Investment Opportunities for Individuals
Tax exemptions and infrastructure investments will encourage long-term investment in high-growth sectors.
4. Rural & Farmer Welfare
Increased financial assistance and irrigation projects will enhance agricultural productivity and rural employment.
Conclusion
The Union Budget 2025-26 is a progressive and growth-driven budget, focusing on tax relief, MSME expansion, investment incentives, and rural development. These measures are expected to strengthen India’s economic foundation and pave the way for sustainable growth.
How Yash Capital Can Help You?
At Yash Capital, we offer expert guidance in:
✅ Tax Planning – Maximizing tax savings under the new regime.
✅ Investment Strategy – Building long-term wealth through smart investing.
✅ Business Financial Planning – Helping MSMEs and startups leverage tax benefits.
✅ Retirement & Insurance Planning – Ensuring financial security for you and your family.
📞 Contact Us Today!
📞 Phone: +91-9910235514 📧 Email: info@yashcapital.com 🌐 Website: www.yashcapital.com
Let’s plan your financial future with expert guidance from Yash Capital! 🚀
