As Union Budget 2025 is unvelied today on Feb 1, 2025, all eyes are on Finance Minister Nirmala Sitharaman as she unveils key economic measures. With expectations high on education, job creation, defense, and tax reforms, stakeholders eagerly await insights into the government’s strategy for post-pandemic recovery. Stay tuned to Analytics Insight for real-time updates and expert analysis on how the budget will impact businesses and citizens across India.
Experts anticipate major income tax relief for homebuyers in Budget 2025, with expectations of affordable housing limits rising from ₹45 lakh to ₹75 lakh in metros and carpet area thresholds increasing to 90 sq. m. CBRE’s Anshuman Magazine suggests raising tax deductions on home loan interest from ₹2 lakh to ₹5 lakh. Thus, making housing more affordable and easing the burden on new homeowners.
The basic income exemption limit for people under 60 years old is Rs 2,50,000 according to the old tax regime and Rs 3,00,000 under the new regime. Saurabh Ashok More of CIEL HR Group highlights that the basic exemption limit has not kept pace with inflation, eroding taxpayers' purchasing power by 27-39%. Stakeholders hope for inflation-adjusted slabs and higher exemption limits in Budget 2025 to provide equitable relief to taxpayers.
India’s growth aspirations may be set out clearly, aiming for the country to become a “Viksit Bharat” by 2047, marking the centenary of India’s independence. To achieve this ambitious vision, India needs to maintain an average annual growth rate of 8% for a decade or two at constant prices. This growth target is considered crucial for addressing the challenges of inequality and poverty, ensuring a prosperous future for the country. However, it is important to note that India's growth rate will be influenced by both domestic and global factors, including political and economic developments worldwide.
The Economic Survey 2025 underscores India's rapid AI adoption in the services sector, particularly in banking, finance, healthcare, telecom, retail, and transport. Chief Economic Advisor V Anantha Nageshwaran highlighted concerns over FDI decline as a share of GDP. He emphasized that India must now compete with industrialized nations. Nageshwaran further stressed that profitable returns remain India's key attraction for global investors in a shifting economic landscape.
Ahead of the Union Budget 2025, President Droupadi Murmu hinted at possible income tax relief for the middle class, emphasizing its role in India’s economic progress. Stakeholders, including RSB Group's Executive Director Rajnikant Behera, are urging FM Nirmala Sitharaman to reinstate the ₹1.5 lakh EV loan interest deductions under Section 80EEB, which expired in 2023. The deductions are expected to boost EV affordability and adoption. If the above suggestion is accepted, taxpayers could claim a deduction of up to Rs 1,50,000 on the interest portion of a loan taken specifically to purchase an EV, or electric vehicle. However, this may only apply if their loan had been sanctioned between January 2019 and March 2023.
Expectations regarding a significant reform in the cryptocurrency taxation framework are high. Currently, India imposes a 30% tax on virtual digital assets (VDAs) and a 1% TDS on transactions over ₹10,000. Industry stakeholders are advocating for a reduction in TDS to 0.01%, the ability to offset losses, and a reevaluation of the high tax rate to foster growth and innovation in the digital economy. Read More
The electronics industry is advocating for a 5% corporate tax reduction and 4-5% export incentives to enhance global competitiveness. Stakeholders emphasize the need for extended Design Linked Incentive (DLI) schemes and improved support for MSMEs to drive innovation and address R&D investment gaps. FDI R&D in India currently stands at 0.6-0.7% of GDP, compared to 2.4% in China. Read More
Budget 2025 may affect the Indian stock market with expected tax cuts for individuals earning ₹1-2 million and expanded PLI schemes, especially benefiting sectors like electronics. Historical data shows that the Sensex moved less than 1% in 8 of the last 25 Budget days. Volatility is expected, so cautious strategies are recommended. Read More
The Economic Survey highlights the success of Pradhan Mantri Awas Yojana – Urban (PMAY-U), with 1.18 crore houses sanctioned since 2015 and PMAY-U 2.0 aiming to support one crore more households. Meanwhile, Finance Minister Nirmala Sitharaman has arrived at Parliament after meeting President Droupadi Murmu, preparing to unveil Budget 2025. Stay tuned for live updates on key announcements shaping India's economic future.
Finance Minister Nirmala Sitharaman announced an increase in the Kisan Credit Card (KCC) loan limit from ₹3,000 to ₹5,000 under the interest subvention scheme, benefiting 7.7 crore farmers, fishermen, and dairy farmers. Additionally, the government will launch a 6-year mission to achieve self-reliance in pulses, focusing on tur and masoor, with NAFED and NCCF ensuring procurement support for registered farmers over the next four years.
Finance Minister Nirmala Sitharaman announced a new urea plant in Namrup, Assam, with an annual capacity of 12.7 lakh metric tons, to boost fertilizer supply. Additionally, three dormant urea plants in the Eastern region have been reopened. The Budget 2025 outlines development initiatives focusing on Garib (poor), Youth, Annadata (farmers), and Nari (women), aiming for inclusive growth across key sectors.
The Finance Minister announced measures to enhance India’s footwear and leather sector, including a focused scheme to support production and exports, generating 22 lakh jobs and ₹1.1 lakh crore in exports. Additionally, the government plans to boost the MSME sector, with increased investment and turnover limits to empower 5.7 crore MSMEs, foster innovation, and create more employment, positioning India as a global manufacturing hub.
The Finance Minister announced the establishment of daycare cancer centers in all district hospitals, with 200 centers to be set up in FY 2025-26. Additionally, medical education will expand with 10,000 new seats added in the next year and a broader plan to add 75,000 seats in the next five years, strengthening India’s healthcare infrastructure while supporting urban livelihoods and employment initiatives for vulnerable groups.
Budget 2025 will establish Atal Tinkering Labs in 50,000 government schools to foster curiosity and innovation. Additionally, broadband connectivity will be extended to all schools for better digital learning access. The Finance Minister also emphasized investment in people, focusing on Sashakt Anganwadi and Poshan 2.0 programs, which support 8 crore children, mothers, and girls in aspirational districts, with enhanced cost norms to improve nutritional support.
Budget 2025 introduces a ₹1 lakh crore Urban Challenge Fund to enhance city infrastructure, including water, sanitation, and redevelopment projects. The fund will finance up to 25% of project costs, with the remaining funds sourced through bonds, loans, or public-private partnerships (PPPs). Additionally, the modified UDAAN Scheme will launch 120 new destinations, aiming to serve 4 crore more passengers, expanding connectivity for aspirational Indians.
Budget 2025 introduces a Nuclear Energy Mission aiming for 100 GW of nuclear power by 2047, with amendments to laws and a ₹20,000 crore R&D initiative for Small Modular Reactors (SMRs). The government will also establish a fund of funds for startups with a ₹10,000 crore contribution and offer ₹2 crore term loans to 5 lakh women, SC, and ST first-time entrepreneurs.
Finance Minister Nirmala Sitharaman announced that a new income tax bill will be introduced next week, continuing the government's efforts to simplify tax compliance with measures like faceless assessments and the taxpayer charter. Additionally, a national action plan for toys will be implemented to position India as a hub for innovative, high-quality, and sustainable toys, supporting the ‘Made in India’ initiative.
Finance Minister Nirmala Sitharaman proposed increasing the FDI limit for the insurance sector to 100%. She also announced the full exemption of 36 life-saving drugs from basic customs duty. To support the domestic electronics industry, a national framework will be developed to promote Global Capability Centers in Tier-2 cities. Additionally, air cargo infrastructure and customs protocols will be improved to boost efficiency in handling high-value perishables.
Finance Minister Nirmala Sitharaman outlined a roadmap to ensure India's fiscal deficit remains manageable, with the fiscal deficit for 2024-25 pegged at 4.8% of GDP. The total receipts for the year are estimated at ₹31.47 lakh crore. Additionally, an Investment Friendliness Index will be introduced in 2025 to promote competitive federalism, and the Jan Vishwas Act 2023 will support business-friendly regulatory reforms.
The government proposes to streamline the customs tariff structure by eliminating redundant cess and surcharge, reducing tariff rates, and removing seven tariff rates. Additionally, a social welfare surcharge will be exempted on 82 tariff lines. The rationalisation of the customs structure, aimed at addressing duty inversion and boosting domestic manufacturing, is part of a broader review to promote exports and value addition, as announced in the 2024 Budget.
Finance Minister Nirmala Sitharaman announced income tax reforms aimed at promoting ease of doing business, encouraging voluntary compliance, and reducing burdens. These proposals focus on simplifying personal income tax, rationalizing TDS and TCS, and fostering employment and investment. The new income tax bill will use clear, direct language to enhance accessibility and ensure a user-friendly experience for both taxpayers and administrators.
Finance Minister Nirmala Sitharaman announced several TDS reforms, including reducing the number of rates and thresholds, and increasing clarity. The tax deduction limit for senior citizens’ interest has been doubled from ₹50,000 to ₹1,00,000. The TDS annual limit on rent is raised from ₹2.40 lakh to ₹6 lakh, benefiting small taxpayers. Additionally, the TCS threshold on remittances under the RBI’s LRS scheme has been increased from ₹7 lakh to ₹10 lakh.
The government has extended the time limit to file updated income tax returns from 2 years to 4 years to encourage voluntary compliance. Additionally, TCS provisions will see relaxation similar to the decriminalization of TDS delays. A proposal has been made to remove TCS on remittances for education funded by loans from specified institutions and on transactions related to the sale of goods to ease compliance.
In a major relief, no income tax will be payable up to ₹12 lakh under the new tax regime. The revised tax slabs are as follows: ₹0-4 lakh (nil), ₹4-8 lakh (5%), ₹8-12 lakh (12%), ₹12-16 lakh (15%), ₹16-20 lakh (20%), ₹20-24 lakh (25%), and above ₹24 lakh (30%). This move aims to ease the tax burden for the middle class and encourage compliance.
The fiscal deficit for FY25 is projected at 4.8%, with an estimated 4.4% for FY26. The Jan Vishwas Bill 2.0 will be introduced to decriminalize over 100 provisions, fostering a more business-friendly environment. Additionally, an Investment Friendliness Index for states will be launched in 2025 to encourage competitive federalism and enhance investment opportunities across the country.
The government plans to forgo Rs 1 lakh crore in direct taxes and Rs 2,600 crore in indirect taxes due to changes in tax rates. Senior citizens will benefit from a doubled interest income tax deduction limit of Rs 1 lakh, and the TDS limit on rent will increase to Rs 6 lakh. Additionally, income tax payers with an annual income of Rs 18 lakh will receive Rs 70,000 in tax benefits.
Budget 2025 introduces a significant change to Section 87A, raising the income tax rebate threshold from Rs 7 lakh to Rs 12 lakh, benefiting middle-income earners. This adjustment, including a standard deduction of Rs 75,000 for employed individuals, effectively raises the rebate ceiling to Rs 12.75 lakh. However, it excludes income taxed under special rates like capital gains. This move aims to enhance disposable income and boost spending capacity for middle-income households.
The Prime Minister of India, Narendra Modi addressed the Budget announcements made today, stating, "May Goddess Lakshmi keeps shining on the middle class." The statement refers to relief that middle-income earners have been provided in the budget, one being the notable no income tax until Rs 12 lakhs slab for salaried individuals.
The Finance Minister has expanded safe harbor rules to provide clearer international taxation by introducing a scheme to determine arm's length prices over three years. This aims to reduce litigation and simplify tax processes for multinational companies. Additionally, the presumptive taxation scheme is extended to non-residents establishing or operating electronics manufacturing facilities in India, further incentivizing investment in the electronics sector.
Sectors like FMCG and auto have reacted positively to the Finance Minister's tax announcements, with reductions in personal income tax rates aimed at boosting consumption. Stocks of major companies such as Dabur India, Hindustan Unilever, ITC, Hero MotoCorp, TVS Motor, and Bajaj Auto saw notable gains, reflecting investor optimism in response to measures expected to stimulate demand in India’s consumption-driven economy.
Budget 2025 Highlights: Prime Minister Narendra Modi emphasized that the Union Budget 2025 focuses on strengthening India’s manufacturing sector, aiming to make Indian products globally competitive. He also highlighted tax relief for the middle class and salaried employees. The Prime Minister stressed that this budget shifts the focus from government revenue to enhancing citizens' wealth, with historic reforms, including support for the private sector in nuclear energy.
Budget 2025 Highlights: Prime Minister Narendra Modi hailed the Union Budget 2025 as a "force multiplier" for India’s growth, aiming to boost savings, consumption, and economic empowerment. He emphasized that the Budget is designed to enhance financial security for the common man ("aam aadmi") and promote greater economic participation, strengthening India's overall economic development.
Direct and indirect taxes will contribute 66 paise of every rupee in government revenue, with direct taxes making up 39 paise and indirect taxes, primarily GST, 18 paise. The remaining revenue comes from borrowings, liabilities, and non-tax sources. Additionally, mobile phones, lifesaving drugs, EV batteries, and raw materials for ships will become cheaper, while flat panel displays and knitted fabrics will see price hikes.
The Budget focuses on agriculture, manufacturing, education, and startups. Seventeen million farmers will receive credit support, while toy manufacturing and small businesses get a boost. Engineering and medical colleges will expand by 10,000 seats, and AI centers of excellence will be set up. A ₹100 billion fund will strengthen startups. Capital expenditure is set at ₹11.21 lakh crore, and January GST collection rose 12.3% YoY to ₹1.96 lakh crore.
Finance Minister Nirmala Sitharaman emphasized agriculture’s role in India's food security and economic resilience during COVID years. She highlighted the government's comprehensive approach, covering every aspect from "beej to bazaar." The Budget aims to strengthen the agricultural sector with strategic investments, ensuring better market access and sustained growth for farmers while enhancing overall economic stability.
Budget 2025 Highlights: India has allocated ₹6.81 lakh crore for defence in 2025-26, up from ₹6.22 lakh crore last year, focusing on modernizing the armed forces. ₹1.92 lakh crore is earmarked for capital expenditure, including new weapons, aircraft, and warships. Revenue expenditure stands at ₹4.88 lakh crore, covering operational costs and ₹1.60 lakh crore for pensions. Unspent capital from 2024-25 amounts to ₹13,500 crore.
Rahul Gandhi, the Congress leader, responds to the Union Budget. He stated, "A band-aid for bullet wounds! Amid global uncertainty, solving our economic crisis demanded a paradigm shift. But this government is bankrupt of ideas."
Indian stock market closed with mixed reactions after the Union Budget 2025-26 presentation, with Sensex up 5.39 points at 77,505.96 and Nifty down 26.25 points at 23,482.15. Bank Nifty dropped 0.16%, while Nifty Smallcap gained 0.41%. Sectoral winners included FMCG, Realty, Media, and Auto, while PSU Bank, Metals, Pharma, and Oil & Gas faced losses. Key gainers were Trent, ITC Hotels, Maruti Suzuki, and Eicher Motors.
The Union Budget 2025 has extended the deadline for filing updated tax returns from 24 to 48 months from the end of the relevant assessment year. Additionally, contributions to the NPS Vatsalya, a pension scheme for children, are now eligible for tax deductions under Section 80CCD of the Income-tax Act, 1961, offering more tax relief options for families.