Key Takeaways: Union Budget 2025-26 made the new tax regime attractive with zero tax up to Rs 12 lakh income through revised slabs and rebate. It rationalised TDS and TCS rates, raised rent and LRS thresholds, and announced customs relief, MSME support and a 4.4 percent fiscal deficit target.
Top Highlights of Budget 2025-26:
• No Income Tax Payable Up to ₹12 Lakh – Under the new income tax regime, individuals earning up to ₹12 lakh will not have to pay income tax.
• New Tax Slabs Introduced
₹0-4 lakh: Nil
₹4-8 lakh: 5%
₹8-12 lakh: 10%
₹12-16 lakh: 15%
₹16-20 lakh: 20%
₹20-24 lakh: 25%
₹24 lakh onwards: 30%
• Two Self-Occupied Properties Can Be Valued at Nil – Instead of just one, taxpayers can now claim Nil valuation on two self-occupied properties.
• Time Limit to File Updated Tax Returns Extended – The deadline for filing updated tax returns has been extended from 2 years to 4 years.
• TDS & TCS Rationalisation with a Focus on the Middle Class
• The number of TDS and TCS rates has been reduced, and thresholds adjusted.
• The TCS threshold limit on LRS remittances has been raised from ₹7 lakh to ₹10 lakh.
• The TDS threshold limit on rent has been increased to ₹6 lakh.
• TCS on education loans up to ₹10 lakh from specified financial institutions has been removed.
• Customs Provisional Assessment Time Limit Set at 2 Years – Customs assessments will now have a maximum processing period of 2 years.
• Basic Customs Duty Adjustments
• Exemptions granted for 36 life-saving drugs, 35 capital goods for EV manufacturing, and wet blue leather.
• Duty on flat panel displays increased from 10% to 20%.
• Duty on fish paste reduced from 30% to 5%.
• Government to Remove 7 Additional Tariff Rates – After this removal, only 8 tariff rates will remain.
• Fiscal Deficit Targets
• FY25: 4.8%
• FY26: 4.4%
• Boost to Oilseed & Pulse Production
• Kisan Credit Card loan limit increased from ₹3 lakh to ₹5 lakh.
• A six-year mission for self-reliance in pulses launched with direct procurement by NAFED and NCCF.
• Fiscal Deficit Control with Gradual Debt Reduction – The government aims for a steady decline in debt levels.
• Jan Vishwas 2.0 Bill – Over 100 provisions in existing laws to be decriminalised.
• Grameen Credit Score for Self-Help Groups – Banks will maintain a credit score for self-help groups to improve financial access.
• Bilateral Investment Treaty – A new model treaty to attract foreign investments.
• New Income Tax Bill Next Week – Will adopt a “trust first, scrutinize later” approach.
• Insurance FDI Increased from 74% to 100% – Applies to insurers investing their entire premium within India.
• Support for MSMEs in Tackling Non-Tariff Barriers in Exports – Bharat Trade Net to be set up for trade facilitation.
• Investment and Turnover limits increased by 2.5 times and 2 times respectively in order to support scalability, technological upgradation and better capital access.
Revised MSME Classification Criteria:
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Micro Enterprises:
- Investment Limit: Increased from ₹1 crore to ₹2.5 crore.
- Turnover Limit: Increased from ₹5 crore to ₹10 crore.
-
Small Enterprises:
- Investment Limit: Increased from ₹10 crore to ₹25 crore.
- Turnover Limit: Increased from ₹50 crore to ₹100 crore.
-
Medium Enterprises:
- Investment Limit: Increased from ₹50 crore to ₹125 crore.
- Turnover Limit: Increased from ₹250 crore to ₹500 crore.
• Cargo Screening and Customs Clearance Simplified – More user-friendly procedures to be introduced.
• Deeptech Fund of Funds – To support tech research, with 10,000 fellowships at IITs & IISc under the PM Research Fellowship Scheme.
• PM Gati Shakti Data to Be Available for Private Sector – Also, the development of the top 50 tourist destinations in collaboration with state governments.
• Mudra Loans for Homestays – Financial support for homestay businesses.
• Medical Tourism & ‘Heal in India’ Initiative – To be promoted with private sector collaboration.
• Western Kosi Canal Project in Bihar – Financial assistance to be provided.
• Modified UDAN Scheme – 120 new destinations to be connected, targeting 4 crore passengers in 10 years.
• 100GW Nuclear Energy Target by 2047 – Includes a ₹20,000 crore nuclear energy mission for small modular reactors.
• Shipbuilding Financial Assistance Policy Revamped – Maritime Development Fund with ₹25,000 crore corpus.
• Urban Challenge Fund – ₹1 lakh crore fund to develop cities into growth hubs.
• Jal Jeevan Mission Extended – Enhanced outlay with focus on quality infrastructure.
• Public-Private Partnerships in Infrastructure – ₹1.5 lakh crore interest-free loans for states.
• Support for Gig Workers – PM Swanidhi Scheme revised, with ₹30,000 UPI-linked credit cards and identity card issuance for gig workers.
• Expansion of Medical Education – 10,000 new seats in medical colleges; 75,000 seats to be added over 5 years.
• 5 National Centres of Excellence for Skilling – To equip youth for global job markets.
• 50,000 Atal Tinkering Labs in Schools – Broadband connectivity for all secondary schools.
• Saksham Anganwadi & Poshan 2.0 – To support nutrition for 8 crore children, 1 crore mothers, and 20 lakh adolescent girls.
• Manufacturing Mission to Boost ‘Make in India’ – Supporting small, medium, and large industries.
• National Institute of Food Technology in Bihar – To promote entrepreneurship and increase farmer incomes.
• Sustainable Toys Initiative – New scheme to make India a global toy manufacturing hub.
• Scheme for Footwear & Leather Industry – Expected to create 22 lakh jobs and boost exports to ₹1.1 lakh crore.
• New SC/ST Women Loan Scheme – Five-year term loans for 5 lakh women.
• Fund of Funds (FoF) with ₹10,000 Crore Contribution – Expanded scope for startup funding.
• Credit Guarantee Cover for MSMEs – Increased from ₹5 crore to ₹10 crore, enabling ₹1.5 lakh crore additional credit in 5 years.
• India Post to Become a Leading Public Logistics Provider – Supported by 2.4 lakh dak sevaks.
• ‘Atmanirbharta Mission’ for Pulses – Six-year self-sufficiency plan for pulses like tur, urad, and masoor.
• Kisan Credit Card Expansion – Loan limit increased from ₹3 lakh to ₹5 lakh; new urea plant in Assam.
• Makhana Board in Bihar – To enhance processing and value addition for farmers.
• ‘Sabka Vikas’ Vision for the Next 5 Years – Focus on balanced growth, zero poverty, and economic empowerment.
• Dhan Dhanya Krishi Yojna – To benefit 1.7 crore farmers across 100 districts.
• Viksit Bharat Vision – Focus on poverty eradication, youth development, farmers, and women.
• Focus on Accelerated Growth – Government prioritizing rapid economic expansion.
• FM Nirmala Sitharaman’s 8th Consecutive Budget Presentation – Continued focus on reforms and growth.
Karwa & Associates
Chartered Accountants
Jaipur
Mail – anshul@karwaandassociates.com
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Union Budget 2025-KarwaAssociates.pdf
Thanks for sharing budget in details