Sun Feb 02 18:02:07 UTC 2025: ## India’s 2025 Budget: No Income Tax Up to ₹12 Lakh, Focus on Middle Class and Growth

**New Delhi, February 1, 2025** – Finance Minister Nirmala Sitharaman presented her eighth Union Budget today, unveiling a series of measures aimed at bolstering India’s middle class and driving economic growth. The most significant announcement is the elimination of income tax for individuals earning up to ₹12 lakh annually. This is achieved through a combination of revised tax slabs and a significant rebate under Section 87A of the Income Tax Act, increasing the limit from ₹7 lakh to ₹12 lakh.

The budget allocates significant funds to key sectors. Agriculture receives a boost with expanded credit limits for farmers and the launch of new support schemes focusing on pulses and cotton cultivation. The gig economy is also included in several employment welfare schemes, with provisions for identity cards and national registry enrollment. A new ₹20,000 crore Nuclear Energy Mission will develop five Small Modular Reactors (SMRs) by 2033. Bihar features prominently in the budget, with several initiatives mentioned, including a Makhana Board and new greenfield airports.

Other key highlights include:

* **Increased FDI in Insurance:** The foreign direct investment (FDI) limit for the insurance sector has been raised from 74% to 100% for companies investing all premiums in India.
* **Defense Spending:** Defense expenditure is pegged at ₹4.91 lakh crore for FY2025-26.
* **Reduced IT & Telecom Allocation:** Allocation for IT and Telecom decreased to ₹95,298 crore for FY2025-26.
* **Infrastructure Development:** Capital expenditure is targeted at ₹11.21 lakh crore, with a focus on infrastructure projects.
* **Fiscal Deficit:** The fiscal deficit is projected at 4.4% of GDP.
* **MSME Support:** Investment and turnover limits for MSMEs have been increased by 2.5 and 2 times respectively.
* **Clean Tech Push:** Significant investment is planned for clean technology manufacturing, including solar PV cells and EV batteries.
* **Regional Connectivity:** A revamped UDAN scheme aims to connect 120 new destinations.
* **Simplified Tax Regime:** The new income tax bill, to be tabled next week, aims to simplify tax laws and reduce litigation. The new tax regime also benefits those earning above ₹12 lakh, though to a lesser extent.
* **Customized Credit Cards:** A new customized credit card with a ₹5 lakh limit will be introduced for micro enterprises.

The budget also includes several other initiatives targeting various sectors, including tourism, healthcare for gig workers, and support for the footwear and leather industry. The Finance Bill will be tabled next week. The government anticipates its passage without difficulty. While the budget aims for fiscal consolidation, it also prioritizes substantial investment in various sectors to fuel economic growth. Initial reactions from industry experts are positive, with many praising the focus on the middle class and the overall economic vision.

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