The Union Budget 2025 has brought significant relief for taxpayers, introducing major income tax deductions and revised  tax slabs under the new tax regime. The budget also prioritizes infrastructure, healthcare, MSMEs, clean energy, and rural development, aiming for sustainable economic growth.
Income Tax Reforms: Higher Exemptions & New Slabs
In a major boost for middle-class taxpayers, the government has raised the tax exemption limit to ₹12 lakh, meaning individuals earning up to this amount will not have to pay income tax under the new regime. The revised tax slabs are:
- ₹4–8 lakh– 5%
- ₹8–12 lakh – 10%
-  ₹12–16 lakh – 15%
-  ₹16–20 lakh – 20%
- ₹20–24 lakh – 25%
- ₹24 lakh & above – 30%
Senior citizens will benefit from increased deductions, including a doubling of the tax deduction on interest income to ₹1 lakh. The TDS threshold for rental income has been raised from ₹2.4 lakh to ₹6 lakh, easing compliance for property owners.
Other key tax reforms include:
- Updated ITR filing window extended from 2 to 4 years.
- Rationalization of TDS & TCS to streamline compliance.
- TCS on education-related remittances via loans removed.
- A new Income Tax Bill is set to be introduced next week to simplify tax regulations.

Key Sectoral Announcements
Healthcare & Pharmaceuticals
- Daycare cancer centers to be established in all district hospitals within three years.
- 36 life-saving medicines exempted from customs duty.
- Free medicines under Patient Assistance Programs to be exempted from customs duty.
- 10,000 additional medical seats to address the doctor shortage.
Infrastructure & Urban Development
- ₹1 lakh crore Urban Challenge Fund to transform Indian cities.
- UDAN Scheme expansion– 120 new destinations to improve regional air connectivity.
- Enhanced warehousing & air cargo infrastructure to support perishable goods transport.
Energy & Environment
- Nuclear Energy Mission launched, targeting 100 GW capacity by 2047.
- ₹20,000 crore allocated for Small Modular Reactors (SMRs) for clean energy.
- Customs duty exemptions on lithium-ion battery waste & critical minerals to boost green energy manufacturing.
Agriculture & Rural Development
- Makhana Board for Bihar to enhance production and processing.
- Kisan Credit Card (KCC) loan limit increased from ₹3,000 to ₹5,000.
MSMEs & Industry
- Investment & turnover limits for MSMEs increased by 2.5 times & 2 times, respectively.
-New toy industry promotion scheme to encourage "Made in India" toys.
- Boost for footwear & leather industry – Expected to create 22 lakh new jobs.
Technology & Education
- 50,000 Atal Tinkering Labs to be set up in government schools.
- All government schools to receive broadband connectivity.
- Global Capability Centers (GCCs) in Tier-2 cities to create new job opportunities.

The Union Budget 2025 takes a balanced approach, providing tax relief while prioritizing key sectors to drive economic growth. The revised tax structure, along with strategic investments in healthcare, infrastructure, and green energy, reflects the government’s commitment to financial relief, innovation, and sustainable development.