Budget 2025 Highlights: Budget bonanza for middle class, how much will you save? Check slab calculations and more

“The Union Budget 2025-26 will push the growth trajectory further as it focuses on increasing the income of the middle class by expanding the nil tax limit to Rs 12 lakh, stressing ease of doing business, building urban infrastructure and launching fresh funds for completion of stressed residential projects. There will be accelerated growth in the real estate segment with the Govt. setting up a ₹1 lakh crore Urban Challenge Fund to transform cities into growth hubs, support creative redevelopment, and enhance water and sanitation infrastructure, which in turn boost residential real estate and create more housing and investment demand."

Sudipta Roy, Managing Director & CEO, L&T Finance Ltd said, “Budget announcements for FY26 have managed to hit the right balance between the need for a consumption stimulus and structural support towards a sustainable growth path for the

economy.

Proposed income tax reliefs for the middle-class population should bring in plenty of cheer

and boost consumption. At the same time, CAPEX thrust has been maintained in the budget

with targeted support to critical sectors. The economy thus gets both consumption and CAPEX

push to strengthen growth momentum in the year.

Reforms in the identified key engines of development- Agriculture, Investment, MSMEs, and

Exports, will help accelerate transformation of these sectors as key growth drivers. Focus on

Agriculture and Urban transformation will significantly help in unleashing the potential of the

economy in the medium term. Announcements around ‘Grameen credit score framework’ and

commitment to revamp KYC norms are big positives for the lending business. Focus sectors

identified for MSME support are mostly labour-intensive sectors and besides driving

manufacturing push, it will also help augment employment generation, skill development,

credit availability etc.

Most importantly, the underlying intent of deregulation and trust is very positive for the private

sector. Overall, a well-balanced budget that sets the path for broad-based and sustainable

domestic growth despite global headwinds.”

Tarun Singh, Founder and MD at Highbrow Securities, highlights the budget’s impact on MSMEs and broader economic stability. “The Union Budget 2025-26 presents both opportunities and challenges that will shape India's economic trajectory. As an equity investor in MSME companies, I welcome the government's renewed focus on this sector. The revised MSME classification—raising investment limits by 2.5 times and doubling turnover thresholds—will significantly improve credit access and support mechanisms, enabling small businesses to drive economic growth.

However, the budget’s heavy reliance on disinvestment and privatisation raises concerns. While privatisation may boost government revenues, it risks job losses and could disrupt long-term growth. Employment stability is crucial, and economic expansion must not come at the cost of job security. Similarly, raising the income tax exemption limit to ₹12 lakh provides relief but lacks alignment with broader growth strategies.

Despite these concerns, the National Manufacturing Mission is a commendable step toward strengthening India's "Make in India" vision. Prioritising ease of doing business, workforce development, MSME engagement, technological access, and quality production will foster a dynamic manufacturing ecosystem.

The proposed tax reforms promote inclusivity by reducing compliance burdens. Lowering TDS thresholds and extending tax return timelines benefit small businesses, startups, and those with variable incomes. Simplifying tax laws and encouraging voluntary compliance will create a more transparent and equitable system.”

Shikhar Aggarwal, Chairman of BLS E-Services said in a forward-looking budget, Finance Minister Nirmala Sitharaman has laid the foundation for inclusive growth, empowering the Garib, Youth, Annadata, and Nari. With simplified KYC processes, digitized urban land records, and enhanced Mudra loan limits, this budget paves the way for a stronger, more connected India. We welcome this balanced and growth-oriented vision and are committed to partnering with the Government to drive the 'Digital India' initiative, especially in underserved areas, ensuring progress reaches every corner of the nation.

The expansion of regional connectivity under the UDAN scheme, with 120 new destinations, presents a significant opportunity for WTi Cabs/people mobility Industry to enhance its airport transfers, intercity travel, and last-mile connectivity. Simultaneously, customs duty adjustments supporting EV manufacturing—including exemptions on 35 additional capital goods—will lead to improved technology and lower vehicle acquisition costs. These initiatives will further strengthen WTi’s/ people mobility industries sustainability goals by enabling a smoother transition to electric mobility while leveraging solar-powered EV charging infrastructure, ensuring an eco-friendly and cost-effective transportation network.

Murali Krishna V, PrinciPal, Spyre VC said," Budget 2025 marks a major development for the startup ecosystem in India, with Finance Minister Nirmala Sitharaman announcing additional support of ₹10,000 crore to the ₹10,000 crore fund already set up for startups. This strategic decision to energize innovation and entrepreneurship in the country offers the crucial financial support startups need to grow their businesses and spur economic growth. The ₹20,000 crore commitment reinforces the government's incessant support for the startup community, realizing the critical role it plays in job development and technology advancement. By easing access to capital, the budget endeavors to ensure that entrepreneurs are enabled to chase their dreams and sustain a more dynamic economy. This intervention assumes utmost importance in a scenario where startups are increasingly looked upon as growth engines to tackle immediate challenges and deliver sustainable solutions. The funds are also expected to draw further investments, thus creating a lively ecosystem that fosters cooperation and innovation. Going forward, this monetary support from the budget will certainly provide the basis for the startup's destiny in India being competitive at the global level and thriving in an ever-changing environment.

Sanjay Nayar, President, ASSOCHAM said “Budget 2025 provides a timely impetus to consumption driven by the vibrant middle classes. The significant tax relief will boost demand while maintaining fiscal deficit at 4.4 per cent of GDP. The government has made a truly bold decision in foregoing Rs 1 lakh crore revenue in direct taxes. The measures for MSMEs, startups and exports will be an important driving force for Viksit Bharat. Ease of doing business and ease of living remain central themes of the budget with focus on equitable growth of all sections of society. The light touch regulatory framework is an essential reform aligned with India's goal to be a developed economy. Make in India has received a shot in the arm through customs duty exemption on inputs for electronic goods which is emerging as a vital industry in India. The focus on skilling, innovation, and AI will be instrumental in securing India's talent pool for jobs of the future.”

Satish Kumar Agarwal, CMD, Kamdhenu Limited said, “Finance Minister Nirmala Sitharaman has presented a Budget which further strengthens India’s standing as the fastest-growing economy in the country and builds on the clarion call of Aatmanirbhar Bharat made by Prime Minister Narendra Modi. The allocation of Rs. 15,000 crore towards SWAMI Fund 2 and the setting up of Urban challenge fund of Rs. 1 lakh Crore for redevelopment of cities will boost infrastructure development and demand for construction materials.”

Individuals having an annual income of Rs 24 lakh or more can hope to save of Rs 1.10 lakh in income tax, while those earning Rs 12 lakh will have to pay no tax, benefiting to the tune of Rs 80,000 from next fiscal under the new regime.

Finance Minister Nirmala Sitharaman in her Budget exempted, from income tax, persons earning up to Rs 12 lakh per annum and rejigged the tax slabs under the new tax regime.

The government has put "substantial amount of money" in hands of people through rejig of I-T slabs in the Budget and an additional 1 crore people will pay no tax due to hike in tax rebate to Rs 12 lakh per annum, Finance Minister Nirmala Sitharaman said.

The 2025-26 Budget hikes the tax rebate available to individual taxpayer to Rs 12 lakh from next fiscal, from Rs 7 lakh currently.

The ruling CPI (M)  intensified it's attack against the Centre over the alleged neglect faced by the state in the union budget 2025-26 and said it reflected the "anti-Kerala" mindset of the BJP.

Veteran Marxist party leaders M V Govindan and E P Jayarajan slammed the budget, presented by Finance Minister Nirmala Sitharaman on Saturday, and Union Minister of State George Kurian's controversial statement against the southern state with regard to budget allocations.

“The Union Budget 2025-26 is a bold and forward-looking plan that places the middle class at its core while ensuring inclusive and sustainable growth across all sectors," said Marico MD & CEO Saugata Gupta.

PepsiCo India & South Asia Chief Executive Officer Jagrut Kotecha said Union Budget 2025 is focused on an income-led economic revival that will provide relief to the middle-income group.

Godrej Consumer Products Ltd Chief Financial Officer Aasif Malbari said Union Budget 2025 takes a balanced approach by strengthening rural infrastructure, manufacturing, and consumer spending, which are three critical pillars for the FMCG sector.

To make NPS Vatsalya more attractive, Finance Minister Nirmala Sitharman on Saturday proposed tax exemption for contribution up to Rs 50,000 per year under the scheme.

"I am also proposing to allow similar treatment to NPS Vatsalya accounts as is available to normal NPS accounts, subject to overall limits," she said while presenting Budget 2025-26 in Lok Sabha.

However, the tax benefit would be availed by those who opt for old tax regime.

Maharashtra Deputy Chief Minister Eknath Shinde said raising the income tax slab to Rs 12 lakh in the Union Budget for 2025-26 was "unprecedented" and has underlined the role of the middle class, poor and weaker sections in the development of the country.

The budget has given justice to all sections of the society and is an assurance of realizing the dream of 'Viksit Bharat', Shinde said.

"With an eye on boosting consumer spending, supporting MSMEs, and simplifying the tax regime, the Union Budget 2025 shines with optimism for the retail and beauty sectors. The reform measures are poised to encourage domestic manufacturing and innovation, enabling brands to satisfy changing consumer demands better. Incentives and tax reforms would also simplify the work of doing business and generate investments in the sector.

“However, a holistic and organized National Retail Policy would do wonders in further simplification of compliance, in facilitating omnichannel strategies, and addressing the growth-oriented perspectives for the emerging as well as the established players. If the right policy goal is embraced, along with unwavering government support, India is poised to take up the global leadership in retail and beauty." - Yashu Jain, Co-founder & CMO, Mattlook Cosmetics

“The Union Budget 2025 marks a pivotal moment for the paint industry with several promising developments. The government's substantial increase in funding for key infrastructure projects, along with a strong focus on rural infrastructure and the expansion of the National Infrastructure Pipeline, signals a commitment to driving long-term growth and improving connectivity across India. The inclusion of new sectors, alongside the continued push for smart cities and the modernization of urban infrastructure through advanced technology, smart utilities, and public transportation systems, sets the stage for substantial growth. At Shalimar Paints, we see these efforts as integral to shaping the future urban landscape. The National Geospatial Mission will further enhance urban planning and infrastructure design, driving demand for both decorative and industrial paints. As we continue to protect India's growing infrastructure, we remain committed to providing high-quality, durable, and sustainable solutions, adding colour to the nation’s development and growth story”. - Kuldip Raina, Director, Shalimar Paints

"The Union Budget’s emphasis on developing a national framework for Global Capability Centers (GCCs) in emerging Tier-2 cities is a testament to India’s commitment to building a future-ready digital and innovation ecosystem. Strengthening talent pipelines, upgrading infrastructure, and enabling industry collaboration will further position India as the preferred global hub for enterprise innovation and operational excellence. The measures to streamline international taxation—such as the block-period approach for arm’s length pricing and the expansion of safe harbour rules—will provide greater regulatory clarity, reduce litigation, and enhance ease of doing business. Additionally, the introduction of a Center of Excellence (CoE) for Artificial Intelligence underlines India's commitment to developing a scientific temper and accelerating AI-driven transformation.  With these strategic initiatives, India is reinforcing its position as a powerhouse for digital transformation, AI adoption, and global enterprise operations." - Monika Potharkar, Director-FSS and Site Lead at General Mills India Center

"The Union Budget 2025-26 gives a significant boost to the FMCG and retail sector, especially for startups focused on sustainability and innovation. The ₹10,000 crore Fund of Funds for startups in the D2C and retail sector emphasize the government’s focus on supporting emerging businesses, with funding aimed at innovation, R&D, and manufacturing.

The change in income tax slabs, which now ensures no tax for incomes up to ₹12 lakh, will help increase disposable income. With consumers having more money to spend, household consumption is expected to rise, benefiting the FMCG and retail sectors. Additionally, the ₹1.5 lakh crore allocated for interest-free loans to states for infrastructure will improve logistics and supply chains, making the retail sector more efficient. By making it easier to access capital, creating more jobs, and boosting consumer confidence, this budget sets the stage for long-term industry growth, supporting both economic progress and sustainability." - Shashank Noronha, Founder of TABBSZ

BJP MP Manoj Tiwari said, "...When we give Rs 2500 to women, and when we announce schemes for the poor; middle class ask us that what is there for them - no income up to an income of Rs 12 lakhs is a big help for the middle class. It's good news for those who daily go to an office - all who are skilled and working hard..."

"The launch of a blended finance SWAMIH Fund 2 with a ₹15,000 crore allocation is a crucial step in addressing stalled real estate projects and providing long-awaited relief to homebuyers. Much like its predecessor, this fund can play a pivotal role in reviving distressed assets, unlocking liquidity, and ensuring financial stability in the real estate sector. As an ARC, we see this as a positive move to resolve stressed assets and restore confidence in the market. - J.C. Flowers Asset Reconstruction Pvt. Ltd.

"Union Budget 2025 will drive and strengthen India’s manufacturing and energy transformation with a strong push for “Make in India”. Targeting 100 GW of nuclear energy by 2047 is a welcome move for a sustainable future. With a ₹20,000 crore outlay for small modular reactors in Nuclear Power, the budget accelerates clean energy adoption. Power sector reforms, export promotion, and policy incentives will strengthen industrial growth, ensuring Atma-Nirbharta, innovation, energy security and transition. Investing in people through skill development programme will build a future-ready workforce, positioning India as a global power- house in manufacturing, sustainability, and technological advancement." - Dr. Bijal Sanghvi, Managing Director, Axis Solutions

"The Union Budget 2025 has taken crucial steps towards strengthening India’s healthcare ecosystem, with the addition of 10,000 new medical seats and exemptions on lifesaving medicines. These moves will directly benefit patients, including those with severe musculoskeletal (MSK) conditions, by improving access to critical treatments and expanding the healthcare workforce. Additionally, the government's initiative to set up Day Care Cancer Centres in district hospitals in the next 3 years, with 200 centers planned for 2025-26, is a significant move to reduce the burden on tertiary care. A similar model for musculoskeletal care could also be valuable, considering MSK conditions account for a substantial portion of tertiary care caseloads. By establishing day-care centers for orthopedics and MSK conditions at the district level, the government can ensure timely, localized care and reduce strain on specialized hospitals." - Ninad Karandikar, Co-founder of Stance Health

Karnataka CM Siddaramaiah, criticised the Union Budget 2025 and said,  " This is a very disappointing budget, It is a budget without vision. This budget has not met the demands of Karnataka state. The central government has not announced any of the projects we requested from Karnataka in this budget. The Union Budget, from the country's perspective, might be fine, but from Karnataka's perspective, it is very disappointing. They have given an empty vessel to Karnataka full stop no money has been allotted to the irrigation projects in Karnataka..."

"The Union Budget 2025 reinforces India's Net Zero 2070 commitment with key measures to strengthen the clean-tech manufacturing ecosystem. The exemption of Basic Customs Duty (BCD) on critical EV minerals and duty-free status for 35 battery components will secure the supply chain, lower costs, and accelerate EV adoption. Support for MSMEs through capital access reforms and compliance ease will drive innovation and India's global manufacturing ambitions. Additionally, tax incentives for green investments and startup-friendly policies will boost clean-tech growth, aligning with the 'Make in India, Make for the World' vision." - -Mohal Lalbhai, Co-founder & Group CEO, Matter Motor

"The Union Budget 2025 underscores a decisive step toward making healthcare more accessible, technology-driven, and inclusive. The exemption of 36 life-saving drugs from basic customs duty will provide much-needed relief to patients battling chronic and rare diseases, ensuring affordability of critical treatments. Additionally, the expansion of broadband to all Primary Healthcare Centres and the promotion of AI-driven medical solutions align with our mission to harness technology for predictive, personalized, and data-driven healthcare. The government's focus on medical tourism and extending healthcare coverage to gig workers through the e-Shram portal further highlights a progressive approach to strengthening India’s healthcare ecosystem. These initiatives will drive innovation, enhance patient outcomes, and bring us closer to achieving universal health coverage." -  Kishore Karumanchi, CEO, aciana

The government proposed to create new tariff lines for makhana products and rice based on process and varieties, in Union Budget 2025-2026

These changes under the Customs Tariff Act 1975 will come into effect from May 1, this year.

According to the Budget document for 2025-26, the government has proposed provision for creating new tariff items for rice based on process (paraboiled, others) and on variety (rice recognised by geographical indications registry, basmati and others) under sub-headed HS code 1006-30.

Congress leader Rahul Gandhi claimed that the Union Budget for 2025-26 is designed to benefit only the country's richest people while providing little relief to common citizens, PTI reported.

Gandhi claimed that while the government announced a small tax rebate for common people, the real aim of the budget was to benefit 25-30 of the country’s richest individuals.

He also alleged that among the 90 bureaucrats involved in drafting the budget, fewer than 10 belong to the backward classes, Scheduled Castes, and tribal communities.

The government has approved a budget allocation of Rs 2.52 lakh-crore for the Railways for 2025-26 financial year, almost the same amount that was allocated in 2024-25.

According to the Union Budget presented by Finance Minister Nirmala Sitharaman on Saturday, the Railways has targeted higher revenues from passengers, goods and others heads.

Disability rights organisations have strongly criticised this year's Union Budget, accusing the government of neglecting the needs of India’s disabled population.

Despite a marginal increase in the overall allocation for the Department of Empowerment of Persons with Disabilities (DEPwD), activists argue that it remains grossly insufficient.

The Department of Empowerment of Persons with Disabilities has also witnessed a modest increase in funding, with a total allocation of Rs 1,275 crore.

A total of Rs 3,350 crore has been allocated for the Ministry of Minority Affairs in the Union Budget this year, which is about Rs 166 crore more than the budgetary estimate of the previous financial year and Rs 1,481 crore more than the revised estimate of 2024-25.

A total of Rs 1,237.32 crore has been allocated for major schemes and projects under the ministry.

IT industry body Nasscom on Saturday welcomed the government's focus on fostering entrepreneurship and improving ease of doing business in the Union Budget 2025-26 and said "these are the good steps forward", PTI reported.

Nasscom President Rajesh Nambiar said the government's focus on innovation and improving ease of doing businesses reinforces its commitment of making India a global leader.

"The commitment to expanding safe harbour rules, both on the threshold as well as on the rate side is very much welcome. These are the good steps forward," he said.

The 2025-26 budget proposals have drawn varied responses from child rights activists and organisations, with some lauding the slight increases in allocations while others raising concerns over cuts to key welfare and education schemes.

According to an analysis by the Child Rights and You (CRY), the total allocation for children has risen to Rs 1,16,132.5 crore from Rs 1,09,920.95 crore in the previous budget, an increase of Rs 6,211.55 crore.

Union Women and Child Development Minister Annapurna Devi lauded the budget as a significant step towards achieving Prime Minister Narendra Modi's vision of a developed and self-reliant India.

Calling it an "inclusive and forward-looking budget," she laid stress on its focus on empowering women, children, youngsters, farmers, and the middle class.

Highlighting the government's commitment to tackling malnutrition, Devi welcomed the revision of nutritional standards under the Supplementary Nutrition Programme and Mission Poshan 2.0.

Allocation for rural development inched up Rs2.66 lakh cr for FY 26 from Rs 1.90lakh crore (revised estimates for FY 25). Budget estimates for FY 25 were at Rs 2.65 lakh crore.