The Union Budget 2025: Has introduced significant changes to the personal income tax structure
The Union Budget 2025-2026, presented by Finance Minister Nirmala Sitharaman, introduces several measures aimed at stimulating economic growth, benefiting various sectors, and providing specific support to startup companies.
A notable highlight is the restructuring of the personal income tax regime, where the exemption limit has been raised to ₹12 lakh, effectively reducing the tax burden for middle-class taxpayers. This move is anticipated to enhance disposable income and boost consumer spending.
In the agricultural sector, the budget proposes the Prime Minister Dhan-Dhaanya Krishi Yojana, targeting 100 districts and expected to benefit approximately 1.7 crore farmers. Additionally, the government plans to facilitate short-term loans of up to ₹5 lakh for 7.7 crore farmers, fishermen, and dairy farmers through enhanced credit under the Kisan Credit Card scheme.
To foster innovation, an allocation of ₹20,000 crore has been made to implement a private sector-driven Research, Development, and Innovation initiative. Furthermore, the budget introduces the PM Research Fellowship, offering 10,000 fellowships for technological research in IITs and IISc, aiming to bolster advancements in science and technology.
While these initiatives are poised to provide immediate economic stimulus, some analysts express concerns that the budget leans towards short-term relief measures and may lack comprehensive strategies for long-term economic reforms, particularly in areas such as job creation and wage growth.
Overall, the Union Budget 2025-2026 reflects the government’s commitment to enhancing the financial well-being of its citizens, supporting the agricultural sector, and promoting innovation, while balancing the need for fiscal prudence.
The Union Budget 2025-2026 has introduced significant changes to the personal income tax structure, particularly under the new tax regime. Here’s a detailed comparison between the old and new tax regimes to help you understand the differences: New Tax Regime (Post-Budget 2025-2026):
Annual Income (₹)
Tax Rate
0 – 4,00,000
Nil
4,00,001 – 8,00,000
5%
8,00,001 – 12,00,000
10%
12,00,001 – 16,00,000
15%
16,00,001 – 20,00,000
20%
Above 20,00,000
25%
Fortunately, individuals with an annual income of up to ₹12 lakh are exempt from income tax under the new regime. or salaried individuals, the standard deduction of ₹75,000 further increases the tax-free income threshold to ₹12.75 lakh. Click here for more information
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