Union Budget 2025-26 Highlights: What’s New for Taxpayers?

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Are you wondering how the Union Budget 2025-26 will affect your finances? If yes, then no matter if you work at a 9-5, run your own small company, or are looking for opportunities to invest better, this year's Union Budget live ensures no one is left behind. With revised tax slabs and changes aimed at making things easier for everyone, in addition to giving tax relief, increasing growth, and promoting financial inclusion.

Let's break this budget down and discover what these changes from the last Budget 2024 could do to taxpayers while aiding in the expansion of India's economy as well as boosting the growth of India.

This analysis will help you learn more about the ways the current Union Budget could bring more cash directly into your pocket and contribute to India's economic growth.

Union Budget Live 2025-26: Changes in the Tax Slabs

The new tax regime of direct tax proposals on personal income tax reforms with special focus on the middle class are:

Let’s make it more simple for you with an example, if you are a salaried person with earning Rs.12 lakhs then under the new tax slabs you will get Rs.80,000 tax benefit.

Likewise, falling under Rs.18 lakh with get a 30% tax benefit that is Rs.70,000 and falling under 25 lakh will get a 25% tax benefit of Rs.1,10,000.

What Does the Income Tax Reforms Mean for You?

The below points will highlight what the budget 2025-26 mean for the Indian investor and will it strike a balance between growth and fiscal prudence:

Rationalization of TDS/TCS for easing difficulties

• Tax deductions limit for senior citizens doubles from Rs.50,000 to Rs.1 lakh.
• The annual limit of Rs.2.40 lakh for TDS on rent increased to Rs.6 lakh.

Encouraging Voluntary Compliance

• Extension of time-limit to file updated returns, from the current limit of two years, to four years.

Reducing Compliance Burden

• Reduced compliance for small charitable trusts/institutions by increasing their period of registration from 5 years to 10 years.
• Taxpayers to be allowed to claim the annual value of 02 self-occupied properties (previously 01) without ant conditions (previously conditions attached).

Key Features of New Budget 2025-26

Here are the key information on the union budget 2025:

• Infrastructure Development: Major investments in roads, railways, urban development, and power sectors.
• Innovation and Technology: Emphasis on AI, geospatial technology, and nuclear energy
• Tax Reforms: Simplification of tax rules to reduce compliance burdens and promote investment.
• Sustainability: Focus on green energy, climate-resilient agriculture, and clean tech manufacturing.                                                        

Highlights of 2025-26 Budget Live that Reflects Its Purpose

The development measures of the union budget live for 2025-26 have focused on Garib, Youth, Annadata (farmers) and Nari (women):

1. Fiscal Management

• Fiscal Deficit Target: Reduced to 5.5% of GDP in FY 2025, down from 6% in FY 2024.
• Borrowing Plan: Rs.15 lakh crore to be borrowed in FY 2025 to Mutual Funds
• Transfers to States: Total transfers to states and UTs increased to Rs.25.60 lakh crore.

2. Agriculture and Rural Development

• Prime Minister Dhan-Dhaanya Krishi Yojana: A program targeting 100 low-productivity districts to benefit 1.7 crore farmers through crop diversification, better irrigation, and sustainable farming practices.
• Enhanced Credit through KCC: Short-term loans of up to Rs.5 lakh facilitated for 7.7 crore farmers, fishermen, and dairy farmers.
• National Mission on High-Yielding Seeds: Focus on developing climate-resilient, high-yield seeds to boost agricultural productivity.
• Makhana Board in Bihar: To improve production, processing, and marketing of Makhana, benefiting local farmers.
• Jal Jeevan Mission: Extended until 2028 with enhanced funding to achieve 100% coverage of rural households with tap water.

3. MSMEs and Make in India

• Credit Cards for Micro Enterprises: Customized credit cards with a Rs.5 lakh limit for 10 lakh micro enterprises registered on the Udyam portal.
• Scheme for First-Time Entrepreneurs: Term loans up to Rs.2 crore for 5 lakh first-time entrepreneurs, including women and marginalized communities.
• Revision in MSME Classification: Increased investment and turnover limits to help MSMEs scale up and innovate.
• Micro: Investment up to Rs.2.5 crore, turnover up to Rs.10 crores.
• Small: Investment up to Rs.25 crores, turnover up to Rs.100 crores.
• Medium: Investment up to Rs.125 crores, turnover up to Rs.500 crore.
• Focus on Labor-Intensive Sectors: Initiatives for footwear, leather, and toy sectors are expected to create 22 lakh jobs and generate exports worth Rs.1.1 lakh crore.

4. Healthcare and Education

• Expansion of Medical Education: Addition of 10,000 new medical seats in 2025, with a goal to add 75,000 seats in the next five years.
• Day Care Cancer Centers:To be established in all district hospitals.
• Saksham Anganwadi and Poshan 2.0: Nutritional support for 8 crore children, pregnant women, and lactating mothers, with a focus on aspirational districts and the Northeast.
• Atal Tinkering Labs: 50,000 labs to be set up in government schools over the next five years to promote innovation and scientific thinking.
• Broadband Connectivity: To be provided to all government secondary schools and primary health centres in rural areas.

5. Infrastructure and Urban Development:

• Urban Challenge Fund: Rs.1 lakh crore allocated to transform cities into growth hubs, focusing on creative redevelopment, water, and sanitation.
• Asset Monetization Plan 2025-30: Aimed at generating Rs.10 lakh crore for new infrastructure projects.
• Power Sector Reforms: Incentives for states to improve electricity distribution and intra-state transmission efficiency, with an additional borrowing allowance of 0.5% of GSDP.
• Maritime Development Fund: A corpus of ₹25,000 crore established for long-term financing in the maritime sector.
• UDAN Scheme: Expansion to 120 new destinations, aiming to carry 4 crore passengers over the next decade.

6. Innovation and Technology:

• Centre of Excellence in Artificial Intelligence: 500 crore allocated for AI research in education.
• National Geospatial Mission: To develop foundational geospatial infrastructure for modernizing land records and urban planning.
• Research, Development & Innovation: 20,000 crore allocated for private sector-driven R&D initiatives.
• Nuclear Energy Mission: Aim to develop 100 GW of nuclear power by 2047, with Rs.20,000 crore allocated for R&D in Small Modular Reactors (SMRs).

7. Social Welfare:

• PM SVANidhi: Revamped with enhanced loans, UPI-linked credit cards, and capacity-building support for street vendors.
• Welfare of Online Platform Workers: Registration on the e-Shram portal and healthcare coverage under PM Jan Arogya Yojana.
• Bharatiya Bhasha Pustak Scheme: Digital Indian language books for school and higher education.
• Gene Bank for Crops Germplasm: A second gene bank with 10 lakh germplasm lines to ensure future food and nutritional security.

8. Sector-Specific Initiatives

• Tourism:Development of 50 new tourist destinations, streamlined e-visa facilities, and skill development programs for youth.
• Food Processing: Establishment of a National Institute of Food Technology in Bihar to enhance value addition and create employment opportunities.
• Footwear, Leather and Toys: Policies to boost productivity, quality and exports, aiming to make India a global manufacturing hub.

Major Allocations Summary

Here is how the distribution of expenditure on major items are as follows:

• Education: Rs.1,28,650 crore
• Rural Development: Not specified
• Home Affairs: Rs.2,33,211 crore
• Defence: Rs.4,91,732 crore
• Health: Rs.98,311 crore
• Social Welfare: Rs.60,052 crore
• Agriculture: Rs.1,71,437 crore
• Urban Development: Rs.96,777 crore
• Commerce & Industry: Rs.65,553 crore

This budget emphasizes inclusive growth, with targeted measures for vulnerable sections, investments in infrastructure, and a strong push for innovation and sustainability.