Proposing big relief for the middle class , the Union Budget 2025 presented by Finance Minister Nirmala Sitharaman on 1st February 2025 has delivered sweeping changes for the salaried class and the Indian economy. Let’s break down the live updates, expert insights, and sector-wise analysis to help you navigate the implications of this game-changing budget.
- ZERO tax on up to ₹12.75L income
- The fiscal deficit for FY25 is set at 4.8%, while the estimated fiscal deficit for FY26 stands at 4.4%.
- Outlay of ₹1.5 lakh crore for 50-year interest free loans to states for capex and infrastructure.
Major TDS & Direct Tax Announcements in Union Budget 2025
The Union Budget 2025 has introduced significant changes in TDS (Tax Deducted at Source) and direct taxes, bringing much-needed relief to taxpayers, especially senior citizens and salaried individuals. Here are the key highlights:
Higher TDS Thresholds for Senior Citizens & Rent Payments
- The TDS threshold for senior citizens has been doubled from ₹50,000 to ₹1 lakh, reducing the tax deduction burden on pensioners and retirees.
- For individuals paying rent, the TDS threshold on rental income has been raised from ₹2.4 lakh to ₹6 lakh, benefiting landlords and tenants alike.
Increased TCS Limit on LRS Remittances
- The threshold limit for Tax Collected at Source (TCS) on Liberalized Remittance Scheme (LRS) transactions has been increased from ₹7 lakh to ₹10 lakh, allowing greater flexibility for international remittances without additional tax implications.
- Additionally, the government has proposed removing TCS on education loans up to ₹10 lakh from specified financial institutions, making higher education financing more accessible.
Major Relief Under Personal Income Tax
The new tax regime continues to focus on providing relief to the middle class, with revised tax slabs and standard deductions:
- Nil tax slab extended up to ₹12 lakh (compared to the previous ₹7 lakh threshold).
- For salaried individuals, the effective tax-free income is now ₹12.75 lakh, thanks to the introduction of a ₹75,000 standard deduction under the new regime.
These changes will likely reduce tax burdens and increase disposable income, especially for the middle class and senior citizens. 
What Could Get Cheaper & Costlier?
Union Budget 2025 has brought changes in customs duties and tax structures, impacting the prices of various goods.
What could get cheaper post Union Budget 2025?
- Healthcare: Essential medicines for cancer and chronic diseases will see a price reduction, making treatment more affordable.
- Electronics: Mobile phone batteries, EV batteries, and other electronic goods are expected to become cheaper due to reduced import duties.
- Sustainable Energy: Lower duties on cobalt powder and lithium-ion battery scrap will boost green energy adoption.
- Leather Products: Items like jackets, shoes, belts, and purses will be more affordable due to tax relief.
What could get costlier post Union Budget 2025?
- Flat Panel Displays: Increased duties on TVs, monitors, and display panels may lead to higher prices.
- Knitted Fabrics: Textiles and garments using knitted fabrics could become costlier due to revised tax structures.
Major Announcements & Budget 2025 Impact on Key Sectors
1. Agriculture: Finance Minister Sitharaman announced the Dhan Dhanya Krishi Yojana that aims to uplift 100 low-productivity districts, and empower 1.7 crore farmers with targeted support.
- A National Mission for Edible Oils & Seeds has also been introduced to drive self-sufficiency and reduce import dependency.
- In addition to strengthening Aatmanirbhar Bharat, the government has laid out a six-year roadmap to boost domestic pulse production, alongside a four-year procurement plan for Tur, Urad, and Masur, ensuring price stability for farmers.
- Additionally, Bihar will see the establishment of a dedicated Makhana Board, focusing on improved processing, value addition, and increased market reach.
2. MSME: With 45% of India’s exports driven by MSMEs, the sector remains a key pillar of economic growth and employment, supporting 7.5 crore individuals. The government has raised classification limits to help more businesses qualify for MSME benefits and grow faster.
- A new Fund of Funds (FoF) with an expanded scope and an additional ₹10,000 crore contribution is set to boost financing for small businesses.
- Also, the need for improved access to credit has been recognized, and now a customized credit card for micro-enterprises will be introduced.
3. AI: To accelerate India's AI capabilities, the government has announced the establishment of three new Artificial Intelligence centers with an outlay of ₹500 crores. These centers aim to drive research, innovation, and the development of AI-driven solutions across industries, positioning India as a global leader in emerging technologies.
4. Gig Workers: Recognizing the growing gig economy, the government has announced social security measures, including healthcare benefits, for gig workers. This initiative aims to support nearly 1 crore workers in the sector, ensuring better financial and social stability. With gig jobs becoming a significant part of India's workforce, these steps will help improve job security, well-being, and long-term sustainability for independent workers.
5. Jal Jeevan Mission: The Jal Jeevan Mission has been extended till 2028 with an increased budget allocation, aiming to provide tap water connections to 15 crore households.
The focus remains on improving infrastructure quality, ensuring sustainability, and prioritizing citizen-centric development. This long-term commitment reinforces the government’s vision of universal access to clean and safe drinking water, strengthening rural infrastructure and public health.
6. Nuclear Energy Mission for Viksit Bharat: With a vision to scale 100 GW of nuclear energy, the government has announced a ₹20,000 crore outlay for Small Modular Atomic Reactors, emphasizing clean and efficient power generation.
This move aims to position nuclear energy as a key contributor to India’s long-term energy security and sustainability goals.
7. Bilateral Investment Treaty (BIT) Revamp: The Bilateral Investment Treaty (BIT) will undergo a revamp and rationalization to attract greater Foreign Institutional Investment (FII).
These reforms are expected to create a more investor-friendly environment, strengthening India’s global investment appeal.
8. Expanding Medical Education in India: Over the past decade, 1.1 lakh undergraduate and postgraduate medical seats have been added, marking a 130% increase. To further strengthen healthcare infrastructure, 10,000 new seats will be introduced this year as part of a broader plan to add 75,000 seats over the next five years. This expansion aims to bridge the doctor-patient ratio gap and improve access to quality medical education across the country.
9. UDAN: The UDAN scheme has successfully connected 1.5 crore middle-class travelers across 88 airports and 619 routes, making air travel more accessible and affordable. To further enhance regional connectivity, a modified UDAN will be launched, expanding to 120 new destinations, strengthening India’s aviation network, and boosting economic growth in smaller cities.
10. Maritime Sector: The government is set to revive the Shipbuilding Financial Assistance Scheme, reinforcing its focus on domestic shipbuilding and maritime expansion. Shipbuilding clusters will be developed to enhance manufacturing capabilities and global competitiveness. Additionally, a Maritime Development Fund with a ₹25,000 crore corpus will be established to support infrastructure, financing, and the long-term growth of India's maritime sector.
Also read: What were the expectations from Union Budget 2025?
Conclusion
The Union Budget 2025 is witnessing an immediate positive market sentiment. That being said, individuals investing in the Indian Stock Market should take a measured approach while analyzing its impact on various sectors. Rather than reacting to immediate market movements, it’s crucial to assess how the budget aligns with India’s long-term economic trajectory. Diversification, risk management, and sectoral opportunities will play a key role in navigating the post-budget market landscape. Keep a close watch on evolving trends and make well-informed investment decisions.
Source: Budget Speech as on 01st February 2025
Disclaimer
This blog is for general/educational information purposes and is no way to be considered as advice, or recommendation for investment or otherwise.
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