Budget 2025: Union Finance Minister Nirmala Sitharaman on Saturday announced significant income tax cuts for the middle class and unveiled a blueprint for next generation reforms for Viksit Bharat as she treaded a fine line between fiscal prudence and providing a thrust to growth.
Individuals earning up to Rs 12 lakh in a year will not have to pay any taxes after she raised the exemption threshold from Rs 7 lakh. An additional Rs 75,000 standard deduction is available for the salaried class.
She also altered tax slabs for people earning above this threshold to help save up to Rs 1.1 lakh in taxes for those with income up to Rs 25 lakh in a year.
The raising of the rebate leads to 1 crore people not having to pay any tax, she said.
The overall tax slab regig will benefit 6.3 crore people, or more than 80 per cent of taxpayers.
“The new structure will substantially reduce taxes on the middle class and leave more money in their hands, boosting household consumption, savings and investment,” Sitharaman said presenting what was dubbed as ‘reformist’ budget for the next fiscal in Lok Sabha.
The Budget for April 2025 to March 2026 fiscal (FY26) proposed to raise foreign investment limit in insurance sector to 100 per cent from current 74 per cent and continued spending spree on infrastructure while raising allocations for social sectors as well as providing for measures for poor, youth, farmers and women.
All this she did while managing to stick to the fiscal consolidation roadmap, projecting a fiscal deficit of 4.4 per cent of the GDP in FY26 as against an estimated 4.8 per cent in the current year ending March 31.
“The expansion of regional connectivity under the UDAN scheme, with 120 new destinations, presents a significant opportunity for WTi Cabs/people mobility Industry to enhance its airport transfers, intercity travel, and last-mile connectivity. Simultaneously, customs duty adjustments supporting EV manufacturing—including exemptions on 35 additional capital goods—will lead to improved technology and lower vehicle acquisition costs. These initiatives will further strengthen WTi’s/ people mobility industries’ sustainability goals by enabling a smoother transition to electric mobility while leveraging solar-powered EV charging infrastructure, ensuring an eco-friendly and cost-effective transportation network,” Ashok Vashist, Founder and CEO, WTiCabs said.
“Budget 2025 marks a major development for the startup ecosystem in India, with Finance Minister Nirmala Sitharaman announcing additional support of ₹10,000 crore to the ₹10,000 crore fund already set up for startups. This strategic decision to energize innovation and entrepreneurship in the country offers the crucial financial support startups need to grow their businesses and spur economic growth. The ₹20,000 crore commitment reinforces the government’s incessant support for the startup community, realizing the critical role it plays in job development and technology advancement,” Murali Krishna V, PrinciPal, Spyre VC said.
“The lot for the 2025 Budget of the insurance sector is the increase in the FDI limit from 75 to an unprecedented 100%. This decision will serve as a turning point for the Indian insurance sector, empowering foreign insurers to invest the entire premium into India. The government has envisioned attracting full foreign ownership into its fold to enhance further capital inflow into the insurance sector and create a competitive atmosphere that should benefit consumers in terms of quality service and product offerings. It is expected that a substantial infusion of these global players would bring with it the best expertise and innovations that can uplift the standards of insurance offerings in India,” Pankaj Nawani, CEO, of CarePal Secure said
“Boost Consumption to Revive Demand, Yet Remain Fiscally Responsible en route to Viksit Bharat,” says GP Hinduja, Chairman, Hinduja Group
“The Middle Class gets a significant tax relief after a decade to boost consumption and eventually revive demand is the Brahmastra FM has fired. Kudos to her for doing so while remaining fiscally responsible by targeting a fiscal deficit of 4.4%. A special focus has been on human-intensive sectors that will generate employment. FDI limit to 100% in Insurance and special impetus to the Renewables, including energy storage systems, are clear positives.”
“It would have helped if the EV charging infrastructure could have been given an industry status. Maintaining Capex levels while lowering taxation is huge but needs more details. With all these moves, the government remains laser-focused on Viksit Bharat by 2047”.
“The announcement of a National framework to promote growth of GCCs in Tier-2 cities will transform India’s economic landscape, thereby creating a balanced economic development across States. As GCCs are projected to generate millions of jobs, this framework will facilitate the growth of formal employment opportunities for the youth , capitalize on talent availability in our Tier 2 & 3 cities, upgrade infrastructure and make these cities more attractive for global businesses,” Neeti Sharma, CEO, TeamLease Digital around the National framework on GCCs said.
“The budget represents a substantial boost to firms across sectors, particularly MSMEs. The increased classification limit will allow them to expand operations and drive economic growth. The introduction of customised credit cards for micro enterprises will enhance access to tailored financial solutions, ensuring smoother cash flow and growth opportunities. Additionally, the ₹10,000 crore corpus for MSMEs and startup term loans will provide much-needed financial support, fostering innovation and expansion,” Varun Tangri, Founder & CEO, QueueBuster said.
“The government’s decision to enhance investment and turnover limits—by 2.5x and 2x, respectively—is a transformative step for India’s MSME sector. With 5.7 crore MSMEs contributing 36% to manufacturing and 45% to exports, this move will empower small businesses to scale, innovate, and drive economic growth. By enabling greater access to capital, fostering technological advancements, and creating more employment opportunities, this policy shift strengthens India’s position as a global manufacturing hub. Given that MSMEs employ 7.5 crore people, this boost will open new avenues for skilled talent, fostering entrepreneurship and long-term economic resilience,” Rohan Bhargava, Co-Founder of CashKaro and EarnKaro said.
“With the announcement of an additional ₹10,000 crore for the Fund of Funds for Startups (FoF for Startups) scheme, the government has reinforced its commitment to India’s thriving startup ecosystem. This initiative, now totaling ₹20,000 crore, significantly strengthens the funding landscape for emerging ventures. With the FoF for Startups already securing commitments exceeding ₹9 lakh crore, it’s clear that confidence in India’s startup potential is at an all-time high. This move will accelerate innovation, reduce reliance on foreign capital, and empower homegrown businesses to expand globally,” Swati Bharagava, Co-founder of CashKaro and EarnKaro said
“The Union Budget 2025-26 introduces key initiatives that will shape the future of education infrastructure by emphasizing AI adoption, skilling, and research-driven learning environments. The establishment of a ₹500 crore Centre of Excellence in AI for Education is a welcome and much-needed step toward integrating AI-driven pedagogy and creating digital learning ecosystems,” Jasmeet Singh Chhabra, Co- Founder, Crimson Schools said.
“The 2025 Union Budget reinforces India’s commitment to a sustainable future by fostering clean tech manufacturing, expanding nuclear energy capacity, and investing in renewable energy solutions. Initiatives to boost domestic production of solar PV cells, EV batteries, and electrolyzers will accelerate our transition to a net-zero economy,” Tanya Singhal, Industry expert in Renewable Energy, Founder of Mynzo Carbon & SolarArisen said.
For breaking news and live news updates, like us on Facebook or follow us on Twitter and Instagram. Read more on Latest Business News on India.com.
