Union Budget 2025: No Income Tax Upto Rs 12 Lakh, Higher Credit Limit For MSMEs
No custom duty on 36 life-saving drugs, new tax regime: Here are the key highlights from Union Budget 2025-26
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No tax on annual income of up to Rs 12 lakh, higher credit limits for farmers and MSMEs, and identity cards and healthcare for gig workers — these were some of the notable announcements made by Finance Minister Nirmala Sitharaman while presenting the Union Budget 2025-26 on Saturday, 1 February.
"This budget will be focused on Garib (the poor), yuva (youth), annadaata (farmers) and nari (women)," Sitharaman said in her speech.
Here are the key highlights from the Union Budget 2025-26:
Taxation and Tariffs
No income tax for salaried individuals earning up to Rs 12,75,000 annually.
The time limit to update Income Tax returns will be extended from 2 years to 4 years.
The threshold for tax collection at source on remittances under remittance schemes will be raised to Rs 10 lakh from Rs 7 lakh.
Delay in TCS payment up to the due date will be decriminalised.
Annual TDS limit on rent will be increased from Rs 2.4 lakh to Rs 6 lakh, reducing the number of transactions subject to TDS.
The tax deduction limit on interest for senior citizens will be doubled from Rs 50,000 to Rs 1,00,000.
Senior and very senior citizens with old National Savings Scheme (NSS) accounts will be exempt from tax on withdrawals made from NSS after August 29, 2024.
The new Income Tax Bill will be introduced next week.
Basic Custom Duty (BCD) on interactive flat panel displays will be increased from 10 percent to 20 percent, while BCD on open cells and components will be reduced to 5 percent.
Full exemption from customs duty will be provided for 36 lifesaving drugs.
Cobalt powder and scrap of lithium-ion batteries will be fully exempt from customs duty.
Agriculture
PM Dhan Dhanya Krishi Yojana will be launched will strengthen irrigation across 100 districts to promote rural prosperity in partnership with states, and improve access to both short-term and long-term credit.
A 5-year mission, 'Mission for Cotton Productivity,' will be launched to boost productivity and income for cotton farmers through advanced science and technology.
A 6-year mission for atmanirbharta (self-reliance) in pulses will be launched, focusing on tur, masoor, and urad dal.
Cooperatives to be set up in states. A Makhana (foxnut) Board will be established in Bihar.
A National Mission on high-yielding seeds will be launched, alongside a 5-year mission for boosting cotton productivity.
Kisan Credit Cards will increase the loan limit for farmers from Rs 3 lakh to Rs 5 lakh for short-term loans.
An enabling framework will be introduced for sustainable fisheries development in India's exclusive economic zones and high seas, with a focus on Andaman & Nicobar and Lakshadweep islands.
MSMEs
Credit limits for micro and small enterprises will rise from Rs 5 crore to Rs 10 crore, and Rs 10 crore for startups.
MSME classification limits will be updated. Investment limit will increase 2.5 times, and turnover limits will double.
Well-performing exporter MSMEs will be eligible for term loans of Rs 20 crore.
A new scheme will offer loan terms for 5 lakh first-time entrepreneurs from SC/ST and women, offering loans of up to Rs 2 crore.
Customised Credit Cards for micro-enterprises will be introduced.
Education
Three Centres of Excellence in Artificial Intelligence for education will be created with an investment of Rs 500 crore.
50,000 Atal Tinkering Labs will be set up in schools to foster curiosity and scientific temper.
IITs will be expanded, with additional infrastructure in five IITs (established after 2014) to accommodate 6,500 more students.
A new centrally funded scheme will train 20 lakh youth over five years, in collaboration with state governments and companies.
The government will provide internships for 1 crore youths, with a Rs 5,000 stipend and Rs 6,000 one-time aid, supported by CSR funds from companies.
The Bharatiya Bhasha Pustak scheme will be implemented to help students learn subjects in their native languages.
Broadband connectivity will be provided to all government secondary schools.
Five National Centres of Excellence for skilling will be established with global expertise and partnerships.
Health
Day Care Cancer Centres will be established in all district hospitals over the next 3 years.
200 Day Care Cancer Centres will be set up in 2025-26.
Gig workers will be offered healthcare coverage under the PM Jan Arogya Yojana.
Medical Tourism and Heal in India will be promoted with private sector partnerships.
Easier visa norms will be introduced to support medical tourism.
Infrastructure
A new asset monetisation plan for 2025-30 will be launched to generate Rs 10 lakh crore for infrastructure projects.
The outlay for the Jal Jeevan Mission will be increased to ensure 100 percent coverage of potable water supply to households.
An Urban Challenge Fund of Rs 1 lakh crore will be set up to support 'Cities as Growth Hubs,' 'Creative Redevelopment of Cities,' and 'Water and Sanitation' proposals – an allocation of Rs 10,000 crore is proposed for 2025-26.
States will be allowed an additional borrowing of 0.5 percent of GSDP (Gross State Domestic Product), contingent on implementing reforms in electricity distribution and augmenting intra-state transmission capacity.
Manufacturing
A National Institute of Food Technology, Entrepreneurship, and Management will be established in Bihar to boost food processing activities.
A National Manufacturing Mission will be set up, covering small, medium, and large industries to provide policy support, execution roadmaps, and a governance framework for ministries and states.
The mission will support clean tech manufacturing, focusing on solar PV cells, EV batteries, wind turbines, and more.