Union Minister for Finance and Corporate Affairs Smt Nirmala Sitharaman presented Union Budget 2025-26 in the Parliament today. The highlights of the budget are as follows: Budget Estimates 2025-26

• The estimate for total receipts, excluding borrowings, and total expenditure is ₹ 34.96 lakh.crore and ₹ 50.65 lakh crore respectively.
• The estimate puts the net tax receipts at ₹ 28.37 lakh crore.
• The estimate places the fiscal deficit at 4.4 percent of GDP.
• The government estimates the gross market borrowings at ₹ 14.82 lakh crore.
• Capex Expenditure of ₹11.21 lakh crore (3.1% of GDP) earmarked in FY2025-26.

AGRICULTURE AS THE 1^ST ENGINE OF DEVELOPMENT

Prime Minister Dhan-Dhaanya Krishi Yojana – Developing Agri Districts Programme

• The states will partner to launch the programme.. It will cover 100 districts with low productivity. These districts have moderate crop intensity and below-average credit parameters. The programme aims to benefit 1.7 crore farmers.

Building Rural Prosperity and Resilience

• The government will launch a comprehensive multi-sectoral programme in partnership with states.It aims to address under-employment in agriculture through skilling, investment, and technology. The goal is also to invigorate the rural economy.
• Phase-1 to cover 100 developing agri-districts.

Aatmanirbharta in Pulses

• Government to launch a 6-year “Mission for Aatmanirbharta in Pulses” with focus on Tur, Urad and Masoor.
• NAFED and NCCF to procure these pulses from farmers during the next 4 years.

HIGHLIGHTS ; Comprehensive Programme for Vegetables & Fruits

• A comprehensive programme will be launched. It aims to promote production, efficient supplies, and processing. It will also ensure remunerative prices for farmers in partnership with states.

Makhana Board in Bihar

• The government will establish a Makhana Board to improve production, processing, value addition, and marketing of makhana.

National Mission on High Yielding Seeds

• The government will launch a National Mission on High Yielding Seeds. This mission aims to strengthen the research ecosystem. It targets the development and propagation of high-yield seeds. The mission ensures the commercial availability of more than 100 seed varieties.
• Fisheries
• Government to introduce a framework for sustainable harnessing of fisheries from the Indian Exclusive Economic Zone and High Seas. There will be a special focus on the Andaman & Nicobar and Lakshadweep Islands.

Mission for Cotton Productivity

• A 5-year mission announced to facilitate significant improvements in productivity and sustainability of cotton farming, and promote extra-long staple cotton varieties.

Enhanced Credit through KCC

• The government will enhance the loan limit under the Modified Interest Subvention Scheme from ₹ 3 lakh to ₹ 5 lakh for loans taken through the KCC.

Urea Plant in Assam

• A plant with annual capacity of 12.7 lakh metric tons to be set up at Namrup, Assam.

HIGHLIGHTS ; MSMEs AS THE 2^ND ENGINE OF DEVELOPMENT

Revision in classification criteria for MSMEs

• The investment and turnover limits for classification of all MSMEs to be enhanced to 2.5 and 2 times respectively.

Credit Cards for Micro Enterprises

• Customized Credit Cards with ₹ 5 lakh limit for micro enterprises registered on Udyam portal, 10 lakh cards to be issued in the first year.

Fund of Funds for Startups

• A new Fund of Funds, with expanded scope and a fresh contribution of ₹ 10,000 crore to be set up.

Scheme for First-time Entrepreneurs

• A new scheme for 5 lakh women, Scheduled Castes and Scheduled Tribes first-time entrepreneurs to provide term-loans upto ₹ 2 crore in the next 5 years announced.

Focus Product Scheme for Footwear & Leather Sectors

• To enhance the productivity, quality and competitiveness of India’s footwear and leather sector, a focus product scheme announced to facilitate employment for 22 lakh persons, generate turnover of ₹ 4 lakh crore and exports of over ₹ 1.1 lakh crore.

Measures for the Toy Sector

• A scheme to create high-quality, unique, innovative, and sustainable toys, making India a global hub for toys announced.

Support for Food Processing

• A National Institute of Food Technology, Entrepreneurship and Management to be set up in Bihar.

Manufacturing Mission – Furthering “Make in India”

• A National Manufacturing Mission covering small, medium and large industries for furthering “Make in India” announced.

INVESTMENT AS THE 3^RD ENGINE OF DEVELOPMENT

1. Investing in People

Saksham Anganwadi and Poshan 2.0

• The cost norms for the nutritional support to be enhanced appropriately.

Atal Tinkering Labs

• 50,000 Atal Tinkering Labs to be set up in Government schools in next 5 years.

Broadband Connectivity to Government Secondary Schools and PHCs

• Broadband connectivity to be provided to all Government secondary schools and primary health centres in rural areas under the Bharatnet project.

Bharatiya Bhasha Pustak Scheme

• Bharatiya Bhasha Pustak Scheme announced to provide digital-form Indian language books for school and higher education.

• The government will set up 5 National Centres of Excellence for skilling with global expertise and partnerships to equip our youth with the skills required for “Make for India, Make for the World” manufacturing..

Expansion of Capacity in IITs

• The government will create additional infrastructure in the 5 IITs started after 2014 to facilitate education for 6,500 more students.

Centre of Excellence in AI for Education

• A Centre of Excellence in Artificial Intelligence for education will be established. The total outlay for this project is ₹ 500 crore.

Expansion of medical education

• They will add 10,000 additional seats in medical colleges and hospitals next year, increasing the total by 75,000 seats over the next 5 years.

Day Care Cancer Centres in all District Hospitals

• Government to set up Day Care Cancer Centres in all district hospitals in the next 3 years, 200 Centres  in 2025-26.

Strengthening urban livelihoods

• A scheme for socio-economic upliftment of urban workers to help them improve their incomes and have sustainable livelihoods announced.

PM SVANidhi

• Scheme to be revamped with enhanced loans from banks, UPI linked credit cards with ₹ 30,000 limit, and capacity building support.

HIGHLIGHTS ; Social Security Scheme for Welfare of Online Platform Workers

• Government to arrange for identity cards, registration on e-Shram portal and healthcare under PM Jan Arogya Yojna, for gig-workers.

2. Investing in the Economy

• Infrastructure-related ministries to come up with a 3-year pipeline of projects in PPP mode, States also encouraged.

Support to States for Infrastructure

• An outlay of ₹1.5 lakh crore proposed for the 50-year interest free loans to states for capital expenditure and incentives for reforms.

Asset Monetization Plan 2025-30

• Second Plan for 2025-30 to plough back capital of ₹ 10 lakh crore in new projects announced.

Jal Jeevan Mission

• Mission to be extended until 2028 with an enhanced total outlay.

Urban Challenge Fund

• An Urban Challenge Fund of ₹ 1 lakh crore announced to implement the proposals for ‘Cities as Growth Hubs’, ‘Creative Redevelopment of Cities’ and ‘Water and Sanitation’, allocation of ₹ 10,000 crore proposed for 2025-26.

HIGHLIGHTS ; Nuclear Energy Mission for Viksit Bharat

• Amendments to the Atomic Energy Act and the Civil Liability for Nuclear Damage Act to be taken up.
• The government will establish the Nuclear Energy Mission for research and development of Small Modular Reactors (SMRs) with an outlay of ₹20,000 crore and will make five indigenously developed SMRs operational by 2033.

Shipbuilding

• The government will revamp the Shipbuilding Financial Assistance Policy.
• Large ships above a specified size to be included in the infrastructure harmonized master list (HML).

Maritime Development Fund HIGHLIGHTS

• The Government will set up a Maritime Development Fund with a ₹25,000 crore corpus, contributing up to 49 percent, while ports and the private sector will provide the rest.

UDAN – Regional Connectivity Scheme HIGHLIGHTS

• A modified UDAN scheme announced to enhance regional connectivity to 120 new destinations and carry 4 crore passengers in the next 10 years.
• Also to support helipads and smaller airports in hilly, aspirational, and North East region districts.

Greenfield Airport in Bihar HIGHLIGHTS

• In addition to the expansion of Patna airport’s capacity, the government has announced the development of greenfield airports in Bihar and a brownfield airport at Bihta.

Western Koshi Canal Project in Mithilanchal

• Financial support for the Western Koshi Canal ERM Project in Bihar.

Mining Sector Reforms HIGHLIGHTS

• A policy for recovery of critical minerals from tailings to be brought out.

SWAMIH Fund 2 HIGHLIGHTS

• A fund of ₹ 15,000 crore aimed at expeditious completion of another 1 lakh dwelling units, with contribution from the Government, banks and private investors announced.

Tourism for employment-led growth HIGHLIGHTS

• Top 50 tourist destination sites in the country to be developed in partnership with states through a challenge mode.

3. Investing in Innovation HIGHLIGHTS

Research, Development and Innovation HIGHLIGHTS

• ₹20,000 crore to be allocated to implement private sector driven Research, Development and Innovation initiative announced in the July Budget.

Deep Tech Fund of Funds HIGHLIGHTS

• Deep Tech Fund of Funds to be explored to catalyze the next generation startups.

PM Research Fellowship HIGHLIGHTS

• 10,000 fellowships for technological research in IITs and IISc with enhanced financial support.

Gene Bank for Crops Germplasm HIGHLIGHTS

• 2^nd Gene Bank with 10 lakh germplasm lines to be set up for future food and nutritional security.

National Geospatial Mission

• A National Geospatial Mission announced to develop foundational geospatial infrastructure and data.

Gyan Bharatam Mission

• The government announced the Gyan Bharatam Mission to survey and document our manuscript heritage. The mission involves academic institutions, museums, libraries, and private collectors. It aims to cover more than 1 crore manuscripts.

EXPORTS AS THE 4^TH ENGINE OF DEVELOPMENT

Export Promotion Mission

• A new Export Promotion Mission will be set up. It will have sectoral and ministerial targets. The Ministries of Commerce, MSME, and Finance will drive it jointly.

BharatTradeNet

• ‘BharatTradeNet’ (BTN) for international trade to be set-up as a unified platform for trade documentation and financing solutions.

National Framework for GCC

• The government will formulate a national framework to guide states in promoting Global Capability Centres in emerging tier 2 cities.

REFORMS AS FUEL: FINANCIAL SECTOR REFORMS AND DEVELOPMENT

FDI in Insurance Sector

• The government will raise the FDI limit for the insurance sector from 74 to 100 percent. This applies to companies that invest the entire premium in India.
• 4o mini

Credit Enhancement Facility by NaBFID

• NaBFID to set up a ‘Partial Credit Enhancement Facility’ for corporate bonds for infrastructure.

Grameen Credit Score

• Public Sector Banks to develop ‘Grameen Credit Score’ framework to serve the credit needs of SHG members and people in rural areas.

Pension Sector

• A forum for regulatory coordination and development of pension products to be set up.

High Level Committee for Regulatory Reforms

• A High-Level Committee for Regulatory Reforms will be established. It will conduct a review of all non-financial sector regulations, certifications, licenses, and permissions.

Investment Friendliness Index of States

• She announced that an Investment Friendliness Index of States will launch in 2025 to further the spirit of competitive cooperative federalism.

Jan Vishwas Bill 2.0

• The Jan Vishwas Bill 2.0 to decriminalize more than 100 provisions in various laws.

PART B

No personal income tax payable upto income of Rs 12 lakh

• No personal income tax payable upto income of Rs 12 lakh (i.e. average income of Rs 1 lakh per month other than special rate income such as capital gains) under the new regime.
• This limit will be Rs 12.75 lakh for salaried tax payers, due to standard deduction of Rs 75,000.
• The new structure will substantially reduce the taxes of the middle class and leave more money in their hands, boosting household consumption, savings and investment.
• The new Income-Tax Bill to be clear and direct in text so as to make it simple to understand for taxpayers and tax administration, leading to tax certainty and reduced litigation.
• Revenue of about ₹ 1 lakh crore in direct taxes will be forgone.

• Revised tax rate structure

• In the new tax regime, the revised tax rate structure will stand as follows:

0-4 lakh rupees	Nil
4-8 lakh rupees	5 percent
8-12 lakh rupees	10 percent
12-16 lakh rupees	15 percent
16-20 lakh rupees	20 percent
20- 24 lakh rupees	25 percent
Above 24 lakh rupees	30 percent

• TDS/TCS rationalization for easing difficulties

• Rationalization of Tax Deduction at Source (TDS) by reducing number of rates and thresholds above which TDS is deducted.
• The limit for tax deduction on interest for senior citizens doubled from the present Rs 50,000 to Rs 1 lakh.
• The annual limit of Rs 2.40 lakh for TDS on rent increased to Rs 6 lakh.
• The threshold to collect tax at source (TCS) on remittances under RBI’s Liberalized Remittance Scheme (LRS) increased from Rs 7 lakh to Rs 10 lakh.
• The provisions of the higher TDS deduction will apply only in non-PAN cases.
• Decriminalization for the cases of delay of payment of TCS up to the due date of filing statement.

• Reducing Compliance Burden

• Reduction of compliance burden for small charitable trusts/institutions by increasing their period of registration from 5 years to 10 years.

• The benefit of claiming the annual value of self-occupied properties as nil will be extended for two such self-occupied properties without any condition.

• Ease of Doing Business

• Introduction of a scheme for determining arm’s length price of international transaction for a block period of three years.
• Expansion of the scope of safe harbour rules to reduce litigation and provide certainty in international taxation.
• Exemption of withdrawals made from National Savings Scheme (NSS) by individuals on or after the 29th of August, 2024.
• Similar treatment to NPS Vatsalya accounts as is available to normal NPS accounts, subject to overall limits.

• Employment and Investment

Tax certainty for electronics manufacturing Schemes

• Presumptive taxation regime for non-residents who provide services to a resident company that is establishing or operating an electronics manufacturing facility.
• Introduction of a safe harbour for tax certainty for non-residents who store components for supply to specified electronics manufacturing units.

Tonnage Tax Scheme for Inland Vessels

The government will extend the benefits of the existing tonnage tax scheme to inland vessels. These vessels are registered under the Indian Vessels Act, 2021. This initiative aims to promote inland water transport in the country.

• Extension for incorporation of Start-Ups

Extension of the period of incorporation by 5 years to allow the benefit available to start-ups incorporated before 1.4.2030.

• Alternate Investment Funds (AIFs)

Certainty of taxation on the gains from securities to Category I and Category II AIFs which are undertaking investments in infrastructure and other such sectors.

• Extension of investment date for Sovereign and Pension Funds

Extension of the date of making investments in Sovereign Wealth Funds and Pension Funds by five more years, to 31st March, 2030, to promote funding from them to the infrastructure sector.

INDIRECT TAX

Rationalisation of Customs Tariff Structure for Industrial Goods

Union Budget 2025-26 proposes to:

1. Remove seven tariff rates. This is over and above the seven tariff rates removed in 2023-24 budget. After this, there will be only eight remaining tariff rates including ‘zero’ rate.
2. Apply appropriate cess to broadly maintain effective duty incidence except on a few items, where such incidence will reduce marginally.
3. Levy not more than one cess or surcharge. Therefore Social Welfare Surcharge on 82 tariff lines that are subject to a cess, exempted.

Revenue of about ₹ 2600 crore in indirect taxes will be forgone.

Relief on import of Drugs/Medicines

• 36 lifesaving drugs and medicines fully exempted from Basic Customs Duty (BCD).
• 6 lifesaving medicines to attract concessional customs duty of 5%.
• Specified drugs and medicines under Patient Assistance Programmes run by pharmaceutical companies fully exempted from BCD; 37 more medicines added along with 13 new patient assistance programmes.

• Critical Minerals :
  • Cobalt powder and waste, the scrap of lithium-ion battery, Lead, Zinc and 12 more critical minerals fully exempted from BCD.

• Textiles:
  • Two more types of shuttle-less looms fully exempted textile machinery.
  • BCD rate on knitted fabrics revised from “10% or 20%” to “20% or ` 115 per kg, whichever is higher.
• Electronic Goods:
  • BCD on Interactive Flat Panel Display (IFPD) increased from 10% to 20% .
  • BCD reduced to 5% on Open Cell and other components.
  • BCD on parts of Open Cells exempted.
• Lithium Ion Battery:
  • 35 additional capital goods for EV battery manufacturing, and 28 additional capital goods for mobile phone battery manufacturing exempted.
• Shipping Sector:
  • Exemption of BCD on raw materials, components, consumables or parts for the manufacture of ships extended for another ten years.
  • The same dispensation to continue for ship breaking.
• Telecommunication:
  • BCD reduced from 20% to 10% on Carrier Grade ethernet switches.

Export Promotion

• Handicraft Goods:
  • Time period for export extended  from six months to one year, further extendable by another three months, if required.
  • Nine items added to list of duty-free inputs.

• Leather sector:
  • BCD on Wet Blue leather fully exempted.
  • Crust leather exempted from 20% export duty.
• Marine products:
  • BCD reduced from 30% to 5% on Frozen Fish Paste (Surimi) for manufacture and export of its analogue products.
  • BCD reduced from 15% to 5% on fish hydrolysate for manufacture of fish and shrimp feeds.
• Domestic MROs for Railway Goods:
  • Railways MROs to benefit similar to the aircraft and ships MROs in terms of import of repair items.
  • Time limit extended for export of such items from 6 months to one year and made further extendable by one year.

Trade facilitation

• Time limit for Provisional Assessment:
  • For finalising the provisional assessment, time-limit of two years fixed, extendable by a year.
• Voluntary Compliance:
  • A new provision introduced to enable importers or exporters, after clearance of goods, to voluntarily declare material facts and pay duty with interest but without penalty.
• Extended Time for End Use:
  • Time limit for the end-use of imported inputs in the relevant rules extended from six months to one year.
  • Such importers to file only quarterly statements instead of a monthly statement.

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