On February 1, 2025, Finance Minister Nirmala Sitharaman unveiled India’s Union Budget for the fiscal year 2025–2026. Important points to note are:
Reforms to the Tax Code:
Income Tax Relief: Under the new tax system, anyone making up to ₹12 lakh a year are exempt from paying income tax. The previous tax system is still in effect, although incomes over this amount are subject to revised slab taxes.
Adjustments to TDS and TCS: Senior citizens’ Tax Deducted at Source (TDS) on interest cap has been raised from ₹50,000 to ₹1 lakh. Furthermore, the annual rent TDS cap has increased from ₹2.4 lakh to ₹6 lakh.
Tax Exemptions: On or after August 29, 2024, withdrawals from the National Savings Scheme are tax-free.
Extended Deadlines for Filing: The due date
Initiatives in Agriculture:
A new program called the Prime Minister Dhan-Dhaanya Krishi Yojana aims to improve farmer welfare and agricultural output.
Enhanced Credit through Kisan Credit Card (KCC): 7.7 crore farmers, fishers, and dairy producers will be eligible for short-term loans up to ₹5 lakh.
The goal of the six-year Pulses Self-Reliance Mission is to increase local production of pulses such as Tur, Urad, and Masoor.
Creation of the Makhana Board: To encourage Makhana trade and cultivation, a special board will be established in Bihar.
Investment in Science and Innovation:
- Research and Development Allocation: ₹20,000 crore has been allocated to implement a private sector-driven research, development, and innovation initiative.
- PM Research Fellowship: Ten thousand fellowships will be provided for technological research in IITs and IISc.
- Gene Bank for Crop Germplasm: A second gene bank, housing 10 lakh germplasm lines, will be established to ensure future food and nutritional security.
Strategies for Export Promotion:
Electronics and EV Incentives: Open cells used in LED/LCD TVs, textile looms, and capital goods for lithium-ion batteries used in cell phones and EVs will all be exempt.
Encouragement of Maintenance, Repair, and Overhaul (MRO): Shipbuilding and shipbreaking-related commodities will be excluded for ten years. Additionally, there will be an extension of the deadline for exporting railway products that are imported for maintenance.
Trade Facilitation: A deadline has been established for completing the preliminary evaluations. After clearance and duty payment, a new clause permits the voluntary disclosure of material facts, with interest but without penalty.