How the Union Budget 2025 Impacts Your Personal Finances
More money at your disposal, more money for savings!
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If you are in your 30s, making it work in an urban city, the Union Budget 2025 has brought some significant changes for you. With so many things been said at the budget announcement, it might get a bit confusing for anybody.
However, with rising living costs, inflation concerns, and a rapidly evolving job market, it is important to understand how the budget impacts your financial decisions. Whether you’re working a 9-to-5, freelancing, or running a startup, these policy changes will influence your savings, investments, taxes, and overall financial planning.
Here’s exactly how this budget will impact your finances.
More tax-free income and standard deduction
Let’s start with the biggest win for salaried folks: the tax-free income threshold is now ₹12 lakh (up from ₹7 lakh earlier). If you earn below this, congratulations—you’re officially tax-free! For those earning more, the slab revisions mean lower tax outgo. The standard deduction for salaried individuals has jumped to ₹75,000 (previously ₹50,000). That’s an extra ₹25,000 straight into your pocket. Use it to pay off that credit card bill.
More money at your disposal, more money for savings!
TDS and TCS reforms
Several tax deduction and collection at source (TDS/TCS) reforms have been introduced, including an increased TDS exemption limit on senior citizen bank deposits (now ₹1 lakh per year), no TDS on rental income up to ₹6 lakh, and a higher TDS exemption limit on dividend income at ₹10,000. Additionally, the TCS exemption under the Liberalised Remittance Scheme has been raised to ₹10 lakh.
This mean that if you earn from rental properties, dividends, or invest internationally, you will experience fewer deductions at the source, giving you better liquidity.
Tax relief on savings and property
Withdrawals from the National Savings Scheme made after August 29, 2024, will be tax-exempt for amounts that were previously eligible for deductions. Contributions to the NPS Vatsalya scheme now qualify for deductions under Section 80CCD, making retirement planning more beneficial. Moreover, homeowners can now claim nil annual value for up to two self-occupied properties, without additional conditions. This makes property investments more attractive.
Healthcare and Cost Reduction
In a big win for gig workers, healthcare benefits will now be extended under the PM Jan Arogya Yojana, ensuring access to essential medical services. Additionally, 36 life-saving drugs have been fully exempt from duties and taxes, making crucial medications more affordable.
This means that if you're a freelancer or rely on essential medicines, these reforms will lower your healthcare expenses significantly.
Support for Entrepreneurs and MSMEs
The government has enhanced the MSME Credit Guarantee, allowing small businesses to access larger credit limits. A ₹10,000 crore Fund of Funds has been introduced to support startups, making it easier for entrepreneurs to secure financing.
If you’re a small business owner or thinking of launching a startup, securing funds just got easier for you.
Most importantly
The time limit for filing updated tax returns has been increased from 24 months to 48 months. More time to correct past tax filings if needed, reducing stress over missed reporting.