Union Budget 2025: Key Highlights and Tax Reforms
Last updated on: August 4, 2025 at 12:29 PM
On February 1, 2025, Finance Minister Nirmala Sitharaman presented the Union Budget, unveiling a series of tax reforms, fiscal policies, and investment initiatives aimed at driving economic growth and boosting consumption. The budget emphasizes tax relief, infrastructure development, and regulatory reforms to streamline business operations and attract foreign investments.
Budget Key Tax Highlights
- The government has introduced significant changes to the tax structure, simplifying the system and providing relief to middle-class taxpayers:
- New Income Tax Bill to be introduced next week, simplifying tax compliance.
- No income tax for individuals earning up to ₹12 lakh per annum.
- Nil tax up to ₹12.75 lakh for salaried individuals due to a standard deduction of ₹75,000.
- Revised tax slabs across all income groups.
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New Tax Slabs under the New Tax Regime
| 0 to 4 Lakh Rupees | Nill |
| 4 to 8 Lakh Rupees | 5% |
| 8 to 12 Lakh Rupees | 10% |
| 12 to 16 Lakh Rupees | 15% |
| 16 to 20 Lakh Rupees | 20% | 20 to 24 Lakh Rupees | 25% | Above 24 Lakh Rupees | 30% |
The revised tax regime is expected to increase disposable income, boost consumer spending, and encourage investments in various sectors.
Fiscal and Financial Sector Highlights
The budget outlines a roadmap for fiscal consolidation while maintaining strong capital expenditure (capex) for growth:
- Fiscal deficit for FY25 projected at 4.8% and 4.4% for FY26.
- FY25 revised capital expenditure (capex) set at ₹10.18 lakh crore.
- FY25 total receipts (excluding borrowings) estimated at ₹31.47 lakh crore.
- FY25 net tax receipts projected at ₹25.57 lakh crore.
- FY25 revised estimate of total expenditure set at ₹47.16 lakh crore.
- For FY26, total receipts (excluding borrowings) and total expenditure are estimated at ₹34.96 lakh crore and ₹50.65 lakh crore, respectively.
- Net market borrowings from dated securities estimated at ₹11.54 lakh crore.
- Gross market borrowings projected at ₹14.82 lakh crore.
Investment and Economic Reforms
To attract foreign investments and boost economic development, the budget proposes:
- Raising the FDI limit in the insurance sector from 74% to 100%.
- Reviewing and simplifying conditions for foreign investment.
- Establishing a forum for regulatory coordination on pension issues.
- A High-Level Committee for Regulatory Reforms to review non-financial sector regulations, certifications, and licenses, with recommendations expected within a year.
- Asset monetization plan targeting ₹10 lakh crore in revenue.
Economic Growth and Sectoral Impacts
The Union Budget 2025 lays a strong foundation for economic expansion, supporting infrastructure, agriculture, and industrial development. Key sectors such as manufacturing, insurance, and consumer goods are expected to benefit significantly. Meanwhile, increased tax exemptions will likely boost spending and drive market confidence.
As the government moves forward with these ambitious policies, the focus remains on fiscal prudence, ease of doing business, and sustainable economic growth, setting the stage for a ‘Viksit Bharat’ (Developed India).
For businesses and individuals looking to navigate these changes and optimize their tax planning, Accruon Consultants can provide expert guidance on tax compliance, financial planning, and investment strategies. Contact Accruon Consultants today for professional assistance with your tax-related matters and financial planning needs.