The Union Budget 2025, presented by Finance Minister Nirmala Sitharaman, brings major relief to taxpayers, with zero tax on annual income up to ₹12 lakh. This move is expected to benefit millions of middle-class taxpayers and boost economic growth.
In addition, Sitharaman announced several key reforms, including changes in income tax slabs, an increase in TDS exemption on rent, and a new I-T bill set to be introduced in Parliament.
The government has also raised the Foreign Direct Investment (FDI) limit in the insurance sector from 74% to 100%, among other significant policy changes.
Let’s take a detailed look at the major highlights of Budget 2025:
1. Major Tax Relief: No Income Tax for Earnings Up to ₹12 Lakh
One of the biggest takeaways from Budget 2025 is the relaxation in income tax slabs, offering huge relief to salaried individuals and middle-class taxpayers.
Revised Income Tax Slabs for 2025:
- Income up to ₹4 lakh – No tax
- ₹4 lakh to ₹8 lakh – 5%
- ₹8 lakh to ₹12 lakh – 10%
- ₹12 lakh to ₹16 lakh – 15%
- ₹16 lakh to ₹20 lakh – 20%
- ₹20 lakh to ₹24 lakh – 25%
- Above ₹24 lakh – 30%
This new income tax regime will significantly reduce the tax burden on middle-class families, helping them save more and invest in the future.
2. TDS on Rent Exemption Increased from ₹2.40 Lakh to ₹6 Lakh
To further ease financial burdens, the government has increased the annual TDS exemption on rent from ₹2.40 lakh to ₹6 lakh.
This change will benefit:
✅ Tenants paying rent up to ₹6 lakh per year
✅ Small landlords receiving smaller payments
✅ Middle-class taxpayers and small property owners
3. Income Tax Department to Focus on ‘Trust First, Scrutinize Later’
In a bid to build trust between taxpayers and the Income Tax Department, Sitharaman urged officials to prioritize trust over scrutiny.
This move will ensure:
✔️ Lesser tax-related harassment
✔️ Smoother I-T filing processes
✔️ Increased transparency in tax administration
Furthermore, she announced that the new Income Tax Bill will be tabled in Parliament next week, focusing on simplification and easing compliance for taxpayers.
4. Foreign Direct Investment (FDI) Limit in Insurance Increased to 100%
A major policy change in Budget 2025 is the increase in the Foreign Direct Investment (FDI) cap in the insurance sector from 74% to 100%.
This reform aims to:
👉 Boost foreign investments in the insurance industry
👉 Enhance competition and efficiency
👉 Provide better insurance products to Indian consumers
The increase in FDI limit is expected to attract global insurance giants and further strengthen India’s financial sector.
5. Six-Year Initiative to Boost Self-Reliance in Pulses Production
In a significant move towards agriculture and self-sufficiency, the Finance Minister announced a six-year initiative to promote the production of pulses, focusing on tur, urad, and masoor dal.
This plan will:
🌾 Reduce dependence on imports
🌾 Ensure food security
🌾 Support farmers with better pricing and incentives
The initiative aligns with Atmanirbhar Bharat’s vision to make India self-sufficient in essential commodities.
6. Increased Budget Allocation for Infrastructure and Growth
To accelerate economic development, the government has allocated additional funds for infrastructure, healthcare, and education.
Key highlights include:
🏗️ More investments in roads, railways, and urban development
🏥 Boost in healthcare sector spending
🎓 More funding for higher education and skill development
These reforms will help create new jobs, improve connectivity, and enhance overall economic growth.
7. Key Takeaways from Budget 2025
📌 Income up to ₹12 lakh is tax-free
📌 TDS exemption on rent increased to ₹6 lakh
📌 Income Tax Department to adopt a “trust first” approach
📌 FDI in insurance sector increased to 100%
📌 Six-year initiative for self-reliance in pulses
📌 Higher spending on infrastructure and economic growth
Conclusion: A Budget Focused on Middle Class & Economic Growth
Budget 2025 reflects the government’s commitment to tax relief, economic development, and self–reliance.
With zero tax on income up to ₹12 lakh, increased TDS exemption, and higher FDI limits, this budget brings significant financial relief for middle-class citizens while boosting India’s growth prospects.
The proposed new I-T bill and agriculture initiatives further strengthen the country’s economic foundation.
As the government continues its efforts for inclusive growth, this budget is set to create better financial opportunities for individuals and businesses alike.
Stay tuned for more updates on Budget 2025 and its impact on various sectors!
