India Budget 2025: Key Highlights for Individuals & Businesses
Finance Minister Nirmala Sitharaman unveiled the highly awaited Union Budget 2025-26 on February 1st 2025. The Budget Allocation issued by the Government balances infrastructure development with tax relief measures to allow for financial stability, while also attaining economic recovery. Here’s what people and organizations need to look into ( Reuters 2025 )
Reduction In Tax Rates: Benefits To Citizens And Corporates:
India Budget 2025
For Individuals:
- Raise in income tax exemption: The income tax exemption limit has been revised from Rs.6 lakhs to Rs.12 lakhs per annum which is in large part beneficial for middle-class and would increase the disposable income at current rates (AP News, 2025).
- Change in tax slabs: For those people who earn more than Rs.12 lakh per year, new tax rates will be set in order to increase expenditures in consumption and savings.
- Incentives for Digital Transactions and Investment: Digital payments and purchases of long-term government bonds have been provided with additional tax relief.
- Healthcare Benefits: Health care Exemptions: Tax deduction on the medical insurance premium has been raised, and is allowed up to Rs. 75000 for the year, and up to Rs. 100000 in case of senior citizen. Now, yearly preventive health checkups qualify for Rs.10,000 of the deduction (Business Standard, 2025).
For Businesses:
- Corporate Tax Cuts for MSMEs: The corporate tax for the small and medium enterprises will be reduced by 2% so it stands at 15% for companies whose turnover is less than Rs.50 crore (Reuters, 2025). (Reuters, 2025).
- Incentives for Startups: Government provides tax holiday benefits for the startups for another three years and raises capital gains exemption limit to Rs.2 crore.
- Simplified GST Compliance: Steps have been taken for Goods and Services Tax (GST) processes to be simplified and businesses with turnover less than Rs.5 crore have been introduced quarterly GST filing.
- Easier Access to Credit: Introduction of new schemes enabling easy and low interest business loans of up to Rs.20 lakh, offered to MSMEs and startups through government sponsored lending institutions (Economic Times 2025).
- Digital Economy & IT Sector: For development of AI, Blockchain and digitalisation infrastructure which benefits startups and IT firms ,an estimate of Rs. 50,000 crore is allocated.
2. Fiscal & Economic Strategy: India Budget 2025
3. Capital Expenditure & Infrastructure Boost: India Budget 2025
4. Sector-Specific Announcements : Indian Budget 2025
1. Agriculture & Rural Development
- Crop High Yielding Program: A programme that intends to target 17 million farmers with the aim of increasing productivity (AP News, 2025).
- Increased Agricultural Credit: farmers are expected to be able to access more subsidized credit as the agricultural credit volume target has been set to Rs. 25 trillion, which means more modernization of farming practices will take place.
Also Learn: How to File ITR 1 Online: Step-by-Step Guide
2. Employment & Social Welfare
- MGNREGA Funding Maintained: A projected allocation of Rs.860 billion which is meant to support job creation in the region through the rural employment scheme (Reuters, 2025).
- Upskilling & Job Creation: The funds allocated to upskilling through vocational training to become more active in the employment sector are projected to be Rs. 7500 crores.
3. Energy & Sustainability
- Nuclear Energy Mission: The government’s target is for nuclear energy power generation to reach 100 GW by 2047, while maintaining a sustainable energy mix (AP News, 2025)
- Renewable Energy Investments: An amount of Rs.1.2 trillion has been reserved for clean energy projects including solar, wind, and green hydrogen.
4. Social Welfare and Women Empowerment
- Women-Led Development Initiatives: The self-entrepreneurs and self-help groups will be given a special fund of Rs 20,000 crores. (AP News, 2025).
- Increased Maternity Benefits: The paid maternity leave has gone up from 26 weeks to 30 weeks for women working in private companies having more than 50 employees. (Reuters 2025).
- Financial Inclusion for Women: Enhanced interest dispensation of Mahila Samman Savings Scheme.
5. Education and Skill Development
- Higher Education Push: The funding of Rs 75,000 crores will be used for the improvement of infrastructure of the IITs, IIMs and AIIMS. (Business Standard, 2025).
- Digital Learning Investments: There is a budget set aside amounting to Rs. 25000 crores to enhance e-learning and AI enabled learning resources. (Reuters 2025)
- Student Loan Subsidies: The government shall bear some of the burden of the today’s education oil by subsidizing the interest of students going abroad for pursuing degrees in STEM courses. (Economic Times 2025)
6. Defense and National Security
- Increased Defense Spending: The budget for defense was increased by 12% to Rs 6.5 trillion for modernization of armed forces support. (AP News, 2025).
- Cybersecurity Measures: Funds are now being increased for the strengthening of cybersecurity frameworks due to the increase in digital threats, which is now pegged at Rs. 10,000 crores. (Reuters 2025).
- Border Infrastructure Development: Expansion of the roads, bridges and tunnels in the key border regions. (Business Standard, 2025).
7. Tourism and Cultural Heritage
- Growth of National Tourism: Offer tax benefits to firms that are willing to put in money towards domestic tourism and heritage conservation. (Economic Times 2025).
- New Pilgrimage Infrastructure Plan: There has been an allocation of Rs. 15000 Crore for the building of influencers religious tourism circuits. (AP News, 2025).
8. Banking & Financial Sector Reforms
- Strengthening Public Sector Banks: In order to expand credit, Rs 50,000 crore has been set aside for bank recapitalization. (Reuters 2025).
- Crypto Taxation Framework: Introduced a new tax law for crypto assets and currencies with 25% tax flat rate. (Reuters 2025).
9. Housing & Real Estate Zambia
- Affordable Housing Push: Under the PM Awas Yojana, urban housing projects have been allocated Rs. 2 trillion.A (Business Standard, 2025).
- Tax Deductions for homebuyers: Increase the interest payment that is deductible on home loans from Rs 2 lakh to Rs 3 lakh per year. (Reuters 2025).
5. What This Means for You: Review of Indian Budget 2025
For Individuals:
- Increased tax-exempted income..
- Encouraged to spend and save in a lot of digital transactions.
- More tax deductions mean additional benefits in healthcare.
- Employment opportunities may arise from a growing IT, Health, and Renewable industries
For Businesses:
- Profitability will increase as corporate taxes will be reduced.
- Better infrastructure and investment-friendly policies.
- Relaxed GST and other compliances enable business expansion..
- Improved availability of business loans and government loans.
- Enhanced investment in the digital infrastructure will benefit IT and tech startups.
To conclude
The Indian Budget 2025 – 2026 creates a base for a growth-oriented, investor-friendly, and environment-friendly economy. Strategic tax regulations, expansion of infrastructure, and investment in specific areas is what sets this budget apart for the benefit of citizens and the business world.
What do you think about India Budget 2025? Is it aligned with your needs and requirements?
References
• Reuters. (2025). India targets fiscal deficit at 4.4% for 2025-26, sets path to bring down debt. Retrieved from Reuters
• AP News. (2025). Takeaways from India's budget that slashes income tax on the salaried middle class to spur growth. Retrieved from AP News
• Business Standard. (2025). Budget 2025: Increased deductions for health insurance and preventive care. Retrieved from Business Standard
• Economic Times. (2025). The government announces new credit schemes for MSMEs and startups. Retrieved from Economic Times