Mon Feb 03 11:37:32 IST 2025: ## India Unveils Budget 2025-26: Income Tax Changes and Focus on Self-Reliance

**New Delhi, February 1, 2025** – Finance Minister Nirmala Sitharaman presented the Union Budget 2025-26 today, marking her eighth consecutive budget presentation. The budget, expected to boost employment and provide relief to the common citizen, focuses on key sectors including agriculture, industry, healthcare, and education. It is touted as a significant step towards achieving the goal of “Atmanirbhar Bharat” (Self-Reliant India).

A major highlight is the introduction of new income tax slabs resulting in zero tax liability for annual incomes up to ₹12 lakh. While this income falls under various tax slabs, available rebates and standard deductions effectively eliminate the tax burden. The Finance Minister clarified that this is a tax-free status, not tax-exempt, meaning tax is calculated but reduced to zero due to deductions.

Further tax reforms are anticipated, with the government planning to introduce a new income tax bill next week. The tax department will reportedly adopt a “trust first, verify later” approach. The budget also includes the elimination of seven additional tariff rates, bringing the total to eight, with one set at zero. While most tariff rates remain largely unchanged, minor reductions are planned for select items. The government also aims to consolidate cess and surcharges, applying a maximum of one to 82 tariff lines.

The budget allocated ₹2.55 lakh crore to Indian Railways for FY26, the same as the previous fiscal year. This flat allocation has disappointed some stakeholders who had hoped for increased funding for ongoing and new projects. Details of expenditure across different sectors are available in the full budget document. The budget’s success will hinge on the effective management of fiscal policies, particularly regarding taxation, education, healthcare, and subsidies.

The Economic Survey 2025 projects GDP growth between 6.3% and 6.8% for FY26. Further details on the budget, including sector-wise allocation and the full PDF, are available online. The Finance Minister also announced an increase in FDI limits in the insurance sector from 74% to 100%.

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