No income tax on earnings up to ₹12 lakh.

Union Budget 2025: Major Tax Reforms and Healthcare Benefits Announced
No income tax on earnings up to ₹12 lakh.
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Union Finance Minister Nirmala Sitharaman on Saturday presented the Union Budget 2025 in the Lok Sabha, introducing significant tax relief and key policy measures aimed at boosting economic growth.

Among the major announcements, Sitharaman declared that , there would be no income tax on earnings up to ₹12 lakh.

In a major push towards affordable healthcare, Sitharaman announced a reduction in customs duty on medicines for serious illnesses, including cancer.

As a result, the prices of several life-saving medicines are expected to come down. Additionally, six life-saving drugs and 36 cancer medicines have been made tax-free.

The government will also remove seven tariff rates under the customs framework and include 57 medicines in the free medicines category.

At the start of her budget speech, the Finance Minister emphasized India's economic performance, stating, "Our economy is the fastest-growing among all major economies. Our track record of development work and structural reforms over the past decade has drawn global attention."

This marks the second full budget of Prime Minister Narendra Modi’s third term and Sitharaman’s eighth consecutive budget presentation as Finance Minister.

Key Announcements and Sectoral Focus

The Budget 2025 outlines strategic initiatives across 10 major sectors, with a particular emphasis on agriculture, small enterprises, and economic self-reliance.

Boost for Makhana Farming in Bihar

A dedicated Makhana Board will be established in Bihar to support production and marketing, a move aimed at benefiting farmers engaged in Makhana (fox nuts/lotus seeds) cultivation. India produces 85% of the world's Makhana, with Bihar accounting for 90% of the country's total output. The districts of Madhubani, Darbhanga, Supaul, Sitamarhi, Araria, Katihar, Purnia, and Kishanganj are known for extensive Makhana farming. The region of Mithilanchal, recognized for its lakes, fish, and Makhana cultivation, is expected to gain from this initiative.

Agriculture and Self-Reliance Measures

Agriculture Promotion: 100 districts will be selected for agricultural development under a new scheme.

Food Security: Special emphasis will be placed on increasing self-reliance in the food sector.

Oil and Pulses Production: A six-year plan has been devised to enhance the production of key pulses such as tur, urad, and lentils.

Support for Small Enterprises

To bolster small businesses, the government will introduce credit cards with a ₹5 lakh limitfor small enterprises registered on the Udyam portal. In the first year, 10 lakh such credit cards will be issued to help entrepreneurs scale their operations.

Tax Reforms

BIG Overhaul of Income Tax Slabs under the new tax regime:

₹0 - ₹4 lakh: No Tax

₹4 lakh - ₹8 lakh: 5%

₹8 lakh - ₹12 lakh: 10%

₹12 lakh - ₹16 lakh: 15%

₹16 lakh - ₹20 lakh: 20%

₹20 lakh - ₹24 lakh: 25%

Above ₹24 lakh: 30%

No Income Tax for salaried individuals earning up to ₹12.75 lakh

Withdrawals from National Savings Scheme (NSS) post August 29, 2024, tax-free

TDS exemption limit for rent payments hiked from ₹2.4 lakh to ₹6 lakh

TDS limit for senior citizens on interest doubled from ₹50,000 to ₹1 lakh

New Income Tax Bill to be simplified, clearer, and more direct

Tax assessment approach: “First trust, then scrutinize "

Cheaper Items

Full exemption of customs duty on 36 life-saving drugs (for cancer, chronic diseases, and rare illnesses)

Costlier Items

Interactive flat-panel LCDs to cost more due to higher customs duty (10% to 20%)

Schemes & Benefits

Big relief for homebuyers stuck in stressed housing projects

SWAMIH 2 Investment Fund to complete 40,000 more housing units in 2025

₹15,000 crore allocation to complete 1 lakh more homes

UDAAN Scheme Expansion

120 new regional destinations to enhance air connectivity

Will support helipads & smaller airports in hilly & northeast regions

Social Security Benefits for Gig Workers

E-Shram Portal registration & ID cards for gig workers

PM Jan Arogya Yojana healthcare benefits for 1 crore gig workers

PM Swanidhi Scheme Revamp

Increased credit limit to ₹30,000 for street vendors

UPI-linked credit card access for informal sector workers

AI & Education Boost

₹500 crore for Center of Excellence in AI for Education

10,000 new medical seats to be added next year

Target:75,000 new medical seats in 5 years

Higher Credit for Farmers

Kisan Credit Card (KCC) loan limit increased from ₹3 lakh to ₹5 lakh

Benefits 7.7 crore farmers, fishermen & dairy farmers

Jan Vishwas Act 2.0

Decriminalization of 100+ provisions in various laws

Builds on Jan Vishwas Act 2023, which decriminalized 180+ legal provisions

Revamped CKYC Registry for pension products to simplify processes

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