Budget 2025 Highlights: Will old tax regime get scrapped? Government clarifies

Hailing the Union Budget 2025, PM Modi said that this budget is of 140 crore Indians’ aspirations. He added that this budget fulfills the dreams of every Indian as the Budget has opened various sectors for the youth. The PM said that the “common citizen is going to drive the mission of Viksit Bharat.”

Prime Minister Narendra Modi in his address to nation post Union Budget speech said that this budget is a “force multiplier.” He added that this budget will increase investment, savings, consumption and growth. He went on to congratulate Finance Minister Nirmala Sitharaman and her entire team for this “Janta Janardan’s, People’s budget.”

Union Minister Piyush Goyal praised the Union Budget 2025, emphasising its potential to create numerous job opportunities across various sectors. He highlighted that sectors like leather, footwear, and cotton textiles could see the creation of up to 22 lakh direct and indirect jobs due to the proposed initiatives. Goyal also pointed to the focus on skill development and vocational training, especially through the 5 PM schemes, which will enhance employability and income levels for youth. Additionally, the budget’s provision for income tax exemptions up to Rs 12 lakh will increase disposable income, boosting demand in the economy. He described the budget as a strategic step toward achieving a developed India by 2047.

Union Home Minister Amit Shah praised Prime Minister Narendra Modi and Union Finance Minister Nirmala Sitharaman for presenting a “visionary” budget. Shah highlighted the government’s decision to exempt income tax for earnings up to Rs 12 lakh, stating that the middle class remains a priority for Prime Minister Modi.

Describing Budget 2025 as a reflection of the Modi administration’s aspirations for a developed and globally competitive India, Shah noted that the budget addresses a wide range of sectors, from agriculture and education to healthcare, innovation, and start-ups, charting a clear path toward a self-reliant India.

Maharashtra Chief Minister Devendra Fadnavis expressed his approval of the Union Budget 2025, calling it an “dream budget” for the middle class.

Fadnavis highlighted the significant income tax changes, noting, that the revision in tax exemptions, including no tax on incomes up to Rs 12 lakh, will be a landmark development for the nation’s economy.

Union Minister Hardeep Singh Puri praised the Union Budget2025, calling it “excellent” and highlighting key provisions such as the exemption of the middle class from income tax on earnings up to Rs 12 lakh. He also noted that the budget is an annual event, regardless of the ongoing electoral cycles, and stressed that unless a ‘One Nation, One Election’ system is implemented, elections will continue to take place in different states.

– The FY26 Budget has proposed the creation of a Makhana Board in Bihar to improve the production, processing, value addition, and marketing of makhana. Farmers will be grouped into Farmer Producer Organizations (FPOs) for training and support.

– The government plans to support the development of a new greenfield airport in Bihar to cater to the region’s future aviation requirements.

– Patna’s airport will be expanded to increase its capacity, and a new brownfield airport will be built in Bihar to enhance connectivity.

– Financial backing will be provided for the Western Koshi Canal ERM Project, which will benefit farmers across 50,000 hectares in the Mithilanchal area.

– A National Institute of Food Technology, Entrepreneurship, and Management will be established in Bihar to foster food processing in the eastern region, boosting farmers’ incomes and offering skilling and employment opportunities.

– The Budget also outlined plans to expand hostel and other infrastructure facilities at IIT Patna.

– Poorvodaya initiative projects will focus on the holistic development of eastern India, including Bihar, Jharkhand, West Bengal, Odisha, and Andhra Pradesh.

– FPOs will ensure that makhana farmers are able to take advantage of relevant government programs, helping them with value addition and processing.

– Initiatives, particularly in agriculture and infrastructure, are aimed at increasing farmers’ incomes and in contributing to the overall development of Bihar.

In the Union Budget 2025, the government has increased defense spending by 7.6%, allocating a total of Rs 4.91 lakh crore for the upcoming financial year. This boost in defense expenditure underscores the government’s commitment to strengthening national security and enhancing military capabilities. The allocation aims to address both immediate and long-term needs of the armed forces, ensuring they remain well-equipped to tackle emerging challenges. This funding increase reflects the government’s focus on maintaining a robust defense infrastructure while prioritizing the safety and security of the nation in an ever-evolving geopolitical landscape.

Bihar’s Deputy Chief Minister, Samrat Choudhary, praised the Union Budget presented today, calling it a landmark initiative that will greatly benefit the state. He emphasized that under Prime Minister Narendra Modi‘s leadership, the NDA government is dedicated to accelerating Bihar’s development. Choudhary highlighted key announcements, such as the establishment of the Makhana Board, funding for the Kosi Canal project, and improvements at IIT Patna, as evidence of the government’s commitment to Bihar’s progress.

BJP MP Narayan Rane thanked the Prime Minister and Union Minister Nirmala Sitharaman. He said that BUdget 2025 is apt for India that is moving towards ‘Viksit Bharat’.

Congress MP Shashi Tharoor remarked that the applause from the BJP benches seemed to be in response to the middle-class tax cut. He said that when they examine the specifics, it might be a positive move, particularly for salaried individuals who may pay less tax. However, he questioned on the crucial issue that is, what happens to those without a salary—how will they generate income? To benefit from tax relief, there needs to be access to jobs. Tharoor said that the FM did not address unemployment. He further added that it is ironic that a party advocating for one nation, one election is simultaneously using every state election to offer more freebies.

Congress MP Karti Chidambaram expressed that it’s important to examine the details of the budget before making any informed comment. He emphasized that while the finance minister’s speech introduces several new proposals, the effectiveness of previous budget schemes must also be assessed. He pointed out that many of these initiatives are expected to yield results only after the current parliamentary term ends in 2029. Chidambaram also noted the tendency for states facing elections to receive disproportionate attention during budget announcements, suggesting that political considerations often influence the budgeting process.

FM Nirmala Sitharaman announced in her budget speech an Urban Challenge Fund of Rs 1 lakh crore to implement the proposals for’cities as growth hubs’, ‘creative redevelopment of cities’ and ‘water and sanitation’. The fund that will cover up to 25% of the cost for bankable projects. However, at least 50% of the cost must be funded through bonds, bank loans, or public-private partnerships. A sum of Rs 10,000 crore has been allocated for this initiative in the fiscal year 2025-26.

BJP MP Ravi Kishan called this a “a wonderful budget” for the poor and middle-class. He went on to congratulate FM Sitharaman for presenting Budget 2025-26.

After the Union Budget presentation, Congress MP Gaurav Gogoi told media that this was the weakest budget that India has seen in last 10 years. He added that a discussion on Maha Kumbh stampede is what is needed instead. “INDIA Alliance walked out and we have not yet received any information on whether the discussion will take place or not. We want a discussion so that the truth can come out,” he said.

After presenting the Union Budget 2025-26, Finance Minister Nirmala Sitharaman met Lok Sabha speaker Om Birla in his chamber at the Parliament house.

Finance Minister Nirmala Sitharaman announced that Rs 1.5 lakh crore will be allocated for 50-year interest-free loans to states for infrastructure development. Additionally, building on the success of the first asset monetization plan, a second plan for 2025-30 will be launched, aiming to invest Rs 10 lakh crore into new projects. Regulatory and fiscal measures will be adjusted to support this initiative.

Approximately 85% of the 7.5 crore tax return filers will benefit from the government’s move to provide tax relief to individuals earning up to Rs 12 lakh.

– Over Rs 24 lakh: 30%New Income Tax Bill to be presented next week.

– Higher TDS to apply only in non-PAN cases.

– TDS limit on senior citizens’ deposit interest raised to ₹1 lakh.

– TDS threshold for rent increased to Rs 6 lakh from Rs 2.4 lakh.

– TCS on Liberalised Remittance Scheme (LRS) increased to Rs 10 lakh from Rs 7 lakh.

– TCS on educational remittance withdrawn if loans are taken from financial institutions.

– Proposal to withdraw NSS exemption for senior and very senior citizens.

– Deadline for filing updated returns extended from two years to four years. Around 90 lakh taxpayers have filed updated returns.

– Revamped central KYC registry to be launched in 2025.

– Income tax rebate of up to Rs 12 lakh introduced under the new tax regime. Salaried individuals will be exempt from tax on income up to ₹12.75 lakh due to standard deductions.

– Simplified tax slabs for the new regime

₹0 – ₹4 lakh: Nil

₹4 – ₹8 lakh: 5%

₹8 – ₹12 lakh: 10%

₹12 – ₹16 lakh: 15%

₹16 – ₹20 lakh: 20%

₹20 – ₹24 lakh: 25%

In the Union Budget 2025, Finance Minister Nirmala Sitharaman announced a significant increase in tax deductions. The limit for tax deduction on interest income for senior citizens will be raised to Rs 1 lakh, doubling the previous amount. Additionally, the threshold for TDS on rent will be increased to Rs 6 lakh, benefiting those receiving smaller rental payments.

Going by the changes that have been announced in tax rates by Sitharaman in, the government will let go Rs 1 lakh crore on direct taxes, Rs 2,600 crore on indirect taxes.

Sitharaman’s Union Budget 2025 speech has come to an end. This budget was full of key announcements. Stay with us as we bring to you key highlights from Sitharaman’s Union Budget 2025-26 speech.

Sitharaman announces NO income tax up will be payable for up to Rs 12 lakh of income!

The Finance Minister proposed the removal of Tax Collected at Source (TCS) on remittances for education expenses if the funds are sourced from loans taken from designated financial institutions. Additionally, TCS will be omitted on sales transactions of goods to ease compliance burdens for businesses.

Key proposals include streamlining Tax Deducted at Source (TDS) by reducing the number of rates and thresholds. The TDS threshold for clarity and consistency will be raised. The tax deduction limit for senior citizens on interest income will be doubled from Rs 50,000 to Rs 1,00,000. The TDS limit on rent will be increased from Rs 2.40 lakh to Rs 6 lakh, benefiting small taxpayers with lower rental income. Additionally, the threshold for Tax Collected at Source (TCS) on remittances under the RBI‘s Liberalised Remittance Scheme (LRS) will rise from Rs 7 lakh to Rs 10 lakh.

Sitharaman announces PIT reforms, rationalisation of TDS and TCS, reducing compliance burden. The government has announced exemptions from Basic Customs Duty (BCD) on cobalt powder, lithium-ion battery waste and scrap, lead, zinc, and 12 other essential minerals. Additionally, 35 more items related to electric vehicle (EV) battery manufacturing and 28 items for mobile phone battery production will be added to the list of exempted capital goods.

– FM Nirmala Sitharaman announced that one crore gig workers will receive ID cards, especially those working with platforms like Swiggy, Zomato, Zepto, and BigBasket.

– The initiative aims to recognize their contributions and extend social security benefits.

– Additionally, these workers will be eligible for healthcare benefits under the PM Jan Arogya Yojana, with registrations facilitated via the e-Shram portal.

– The move aligns with the rapid growth of the quick commerce sector, which has reached a $6 billion market in just four years.

– This development is expected to strengthen social security within the online commerce sector.

The new income tax bill is crafted to be simple and straightforward, with clear language that ensures easy comprehension for both taxpayers and tax administrators. Its transparent wording seeks to eliminate ambiguity, making it more accessible and user-friendly for everyone involved.

Pharmaceutical companies’ patient assistance programs will be entirely exempt from Basic Customs Duty (BCD), as long as the medicines are provided free of charge to patients. Furthermore, 37 new medicines and 13 new patient assistance programs will be added to the exemption list.