Union Budget 2025: Key Highlights & Impacts to Watch Out For

Finance Minister Nirmala Sitharaman presented the Union Budget 2025 on February 1, 2025. This budget focuses on growing the economy, making tax changes and improving areas like infrastructure, healthcare and farming. However, the government has also made numerous changes to income tax rates, updated GST rules and allocated money to different sectors. So, let’s take a look at the Union Budget 2025 highlights and understand how it is going to strengthen the Indian economy.

As per the Government of India, the goal of this budget is to help the middle class, encourage business growth, and strengthen underlying business sectors. Here are the major points of the Union Budget 2025 and how they would affect taxpayers, businesses and the economy.

1. Income Tax Slabs 2025

In a single phrase – A big tax relief for the middle class.

One of the biggest updates in the Union Budget 2025 is the revised income tax slabs. This new tax structure would reduce the tax amount people need to pay, which in turn, would allow them to save more money in their pockets. Here’s how the modified income tax slabs 2025 look:

Income Tax Highlights:

• No tax for individuals earning up to ₹12 lakh per year.
• Salaried individuals earning up to ₹12.75 lakh will pay no tax due to the standard deduction of ₹75,000.
• The rebate under Section 87A is increased from ₹25,000 to ₹60,000.
• The new tax regime offers more tax savings compared to the old one.
• It would cost the government ₹1 lakh crore in tax revenue from these changes.

Potential Results: People would have more money to spend, which would eventually help boost the economy.

Read More : How To File ITR Online

2. GST Updates 2025

All to simplify the tax system for everyone! The government has made significant updates to the GST to make it easier for businesses as well as consumers. Here are the GST updates in the Union Budget 2025:

• Small businesses would now face fewer hurdles when filing taxes.
• Reduction in GST rates for essential goods and services.
• More compliance measures to limit tax evasion.
• The digitalisation of GST refund claims for faster processing.
• Reduction of paperwork required for tax filing.

Potential Results: The tax on small businesses and consumers would be reduced, which in turn, would help support the economy.

3. Infrastructure Budget 2025

The infrastructure budget for 2025 focuses on improving the country’s physical and digital infrastructure. Here are some of the major proposals included in the budget:

• The government has set aside a sum of ₹11.21 lakh crore for infrastructure projects, which is slightly higher than last year’s ₹11.11 lakh crore.
• The budget allocated and investments would go into improving transportation, housing and energy sectors.
• The government is also extending the investment deadline for infrastructure projects until 2030 to attract more investments from around the world.

Potential Results: All these efforts would help in building smarter cities, improving transport connections, and making sure the country experiences sustainable growth.

4. Agriculture Budget 2025

The budget can never be complete without it supporting farmers and boosting agriculture as India is an agriculture-based economy. So, the government has allocated ₹1.71 lakh crore for agriculture, which is up from ₹1.51 lakh crore last year. The major points include:

• The creation of a Makhana Board for the production and marketing of Makhana, which is a major crop in Bihar.
• A National Mission on High Yielding Seeds will be launched to strengthen the research, development, and propagation of seeds with high yield, and commercial availability of more than 100 seed varieties.
• More funding for improving irrigation systems and supporting rural development projects.
• PM Dhan-Dhanya Krishi Yojana, a program that aims at helping 100 districts with low farm productivity. The plan focuses on improving farming and promoting a variety of crops.

Potential Results: These changes would not only increase farmers’ income but also improve the agricultural sector exponentially while ensuring food security for the country.

5. Healthcare Budget 2025

For better healthcare for all, the government has made certain provisions to improve healthcare services across the country. The healthcare allocation is ₹98,311 crore in Budget 2025, which is a 9.78% increase from last year. The key points in the healthcare budget for 2025 include:

• The PLI scheme for pharma gets an extra ₹2,445 crore and ₹37,226.92 crore is set aside for the National Health Mission.
• Ayushman Bharat PM-JAY receives ₹9,406 crore, while PMABHIM gets ₹4,200 crore.
• A major ₹67,000 crore has been allocated for the Jal Jeevan Mission to provide clean and safe drinking water to every household by 2028.

Potential Results: With this, urban healthcare services will improve and the rural areas will have better access to healthcare facilities and related essential services.

List of Items to Get Cheaper After the Budget 2025

• Mobile phones
• 36 Lifesaving drugs and medicines
• EV batteries.
• Wet blue leather
• Carrier-grade ethernet switches
• 12 Critical minerals
• Raw materials for manufacturing ships
• Seafood
• Cobalt products
• Zinc, lithium-ion battery scrap
• Open cell
• LED/LCD
• Medical equipment
• Handicrafts

List of Items to Get More Expensive After the Budget 2025

• Flat panel display
• Knitted Fabrics

TDS and TCS Updates

• Senior citizens’ interest TDS limit raised to ₹1 lakh.
• TDS on rent applies for amounts above ₹6 lakh.
• TCS threshold increased from ₹7 lakh to ₹10 lakh.

Benefits for Senior Citizens

• National Savings Scheme (NSS) withdrawals are tax-free after August 29, 2024.
• NPS Vatsalya accounts also get tax exemptions.

Read More : Best Ways to Save Income Tax

These were the key Union Budget 2025 highlights. This budget is a significant step toward economic growth and improving citizens’ quality of life, focusing on offering tax relief, improving infrastructure, supporting farmers and providing better healthcare. All these changes have been made to make life easier for middle-class taxpayers, help businesses grow, and ensure that everyone has access to a better lifestyle and healthcare.