Union Budget 2025: Key Highlights You Need to Know

The Union Budget 2025, presented by Finance Minister Nirmala Sitharaman on February 1, 2025, aims to boost economic growth, ease tax burdens on individuals, support agriculture, and foster innovation. This budget is crucial as India focuses on post-pandemic recovery, global economic uncertainties, and strengthening domestic industries.

Union Budget 2025: Important Highlights

From tax reforms to start-up incentives and fiscal deficit management, here are the key takeaways from this year’s budget:

1. Taxation Reforms: Relief for Middle-Class Taxpayers

Taxation is always a major focus of any budget, and this year’s budget brings significant relief to the middle class by increasing the tax exemption limit and restructuring the tax slabs.

Revised Budget Income Tax Slabs

The government has raised the income tax exemption threshold from ₹7 lakh to ₹12 lakh under the new tax regime. This means that individuals earning up to ₹12 lakh annually will now be exempt from paying income tax, providing much-needed relief to salaried employees and the middle class.

Additionally, the new tax structure is as follows:

Annual Income Slab	Tax Rate
Up to ₹4 lakh	Nil
₹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%

Another big change is the increase in standard deduction from ₹50,000 to ₹75,000, ensuring more savings for taxpayers.

With the revised tax slabs, businesses must ensure accurate payroll processing to remain compliant. SkizzleHR’s payroll software automatically updates tax calculations, ensuring seamless payroll execution.

Corporate Tax & Business Incentives

Corporate tax remains unchanged at 22% for domestic companies but new incentives have been introduced for startups and MSMEs.

Startups incorporated till March 2026 will enjoy tax exemptions for five additional years, promoting entrepreneurship.

2. Agriculture & Rural Development: Boosting Farmer Welfare

To enhance India’s agricultural productivity and support farmers, the government has launched new initiatives:

Prime Minister Dhan-Dhaanya Krishi Yojana

This is a comprehensive plan to modernize Indian agriculture, focusing on crop diversification, advanced farming technologies, and sustainable practices. The program includes:

Subsidies for farmers on fertilizers, seeds, and modern irrigation systems.

Increased Minimum Support Price (MSP) for key crops like wheat, rice, and pulses.

Pulses Self-Reliance Mission

India depends heavily on imports for pulses. The budget introduces a six-year mission to increase domestic production of Tur, Urad, and Masoor dals, reducing reliance on imports and ensuring stable prices for consumers.

Increased Credit Support for Farmers

The government has allocated ₹5 lakh crore for agricultural loans, covering small-scale farmers, fishermen, and dairy farmers under the Kisan Credit Card (KCC) scheme.

Interest-free loans for farmers adopting solar energy-based irrigation.

3. Investment in Research, Innovation & Technology

Recognizing that innovation drives economic growth, the government has allocated ₹20,000 crore for R&D initiatives:

Research, Development & Innovation Initiative

This initiative will fund private-sector-driven research, encouraging collaborations between tech companies, IITs, and research institutions.

Focus areas include AI, renewable energy, space technology, and biotechnology.

PM Research Fellowship

To encourage scientific research, the government will offer 10,000 research fellowships in premier institutions like IITs, IISc, and national laboratories.

4. Export Promotion & Industrial Growth

India aims to become a global manufacturing hub with new incentives:

Support for Electronics & EV Sector

Tax exemptions on imported lithium-ion battery components to boost electric vehicle (EV) production.

Reduced import duties on semiconductor components, enhancing India’s chip manufacturing capacity.

Maritime & Shipbuilding Industry

A 10-year tax holiday for shipbuilding and repair units to strengthen India’s naval capabilities.

Customs duty exemptions on ship-breaking materials to reduce manufacturing costs.

5. Fiscal Management & Economic Stability

Fiscal Deficit Target

The government aims to reduce the fiscal deficit to 4.4% of GDP for FY 2025-26 (compared to 4.8% last year).

This indicates a commitment to fiscal responsibility while continuing public spending on infrastructure and welfare programs.

Disinvestment Plans

The government plans to privatize two state-owned enterprises in aviation and railway sectors to raise funds.

6. Support for Startups & Gig Workers

India’s startup ecosystem and gig economy workforce receive a major boost:

Extended Tax Benefits for Startups

Tax holiday for startups extended by five more years, reducing their financial burden in the initial stages.

Lower interest rates on business loans for tech startups and new ventures.

Social Security for Gig Workers

A new insurance scheme for gig workers, covering healthcare and accident insurance.

A ₹2,000 crore fund to support digital platform-based workers, including delivery executives and ride-hailing drivers.

Conclusion: A Growth-Oriented Budget

The Union Budget 2025 is designed to:

✅ Ease the tax burden on the middle class.
✅ Strengthen the agriculture sector with self-reliance programs.
✅ Boost research, startups, and technology innovation.
✅ Promote exports & industrial growth through manufacturing incentives.
✅ Ensure fiscal stability while continuing essential welfare programs.

With a strong focus on inclusive growth, digital transformation, and economic stability, the Union Budget 2025 sets the stage for a more resilient and competitive India.

As the Union Budget 2025 brings significant financial changes, businesses must stay compliant and optimize payroll operations. SkizzleHR’s payroll software ensures accurate tax compliance, automated payroll, and real-time financial insights.

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