Union Budget 2025: Income tax slabs, defence, infra sector, Capex, and 6 other things to look out for in budget
Union Budget 2025: Finance Minister Nirmala Sitharaman is set to deliver her 8th consecutive budget today (Saturday, February 1, 2025). Income tax slabs, Section 80C, defence, auto, infra, and healthcare sectors are some of the things people can focus on during her budget speech.
Union Budget 2025: In every budget, people from all walks of life across India have high hopes from the finance minister. Union Budget 2025 will be no exception. As Finance Minister Nirmala Sitharaman presents her record 8th consecutive budget, people across the country will be keenly following budget proceedings to know if she has some announcements for them. Income taxpayers have high hopes from her as they expect her to give significant relaxation in income tax slabs. There are expert calls to reduce the income tax rates in the up to Rs 30 lakh income slab. There may be major announcements in prominent sectors such as infrastructure, defence, banking, and auto. In the building up to the budget, here are the 10 things you can focus on during the Budget 2025 speech.
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Income Tax Rates
In her last budget, Finance Minister restructured the new tax regime and increased the number of tax slabs to 6. She also gave tax relaxation to the taxpayers. However, there was no relaxation in tax rates for old tax regime taxpayers.
Income Tax Rates
In this budget, experts expect her to give complete tax relaxation for earners in the Rs 10 lakh income bracket and reduce the rate to 20 per cent in the Rs 15 lakh-Rs 20 lakh income bracket.
Section 80C
There have been calls to increase the limit of Section 80C of the Income Tax Act, 1961. The section is fruitful for old tax regime taxpayers as they can save up to Rs 1.50 lakh tax through investments, insurance premiums, home loan principal, and many other components. But taxpayers find the limit too small. Experts want to increase the limit up to Rs 5 lakh.
Standard deduction
FM Sitharaman increased the limit of the standard deduction to Rs 75,000 from Rs 50,000. But the limit was increased only for new regime taxpayers. There was no limit increase for old regime taxpayers.
Government spending on infra
The Modi government has been highly focused on the infra sector. It is aiming to become a $5 trillion economy on the back of its strong infrastructure.
Government spending on infra
In Budget 2025, people will keenly watch on Capex for ministries such as railways and roadways. There may be large-scale announcement related to infrastructure in this budget.
Defence sector
The defence sector has been a keen focus area for the government. Defence PSUs have seen exponential growth in the last 5 years. The government aims at reaching a defence production target of $25 billion in the year 2025.
Defence sector
The government may come up with initiatives that increase India's defence exports, facilitate defence procurement, and streamline better capital allocation towards the sector.
New policies in auto sector
India's auto sector has expanded largely in the last decade and mobility is an important factor in India's growth. In the budget, it will be interesting to see if the government increases allocations to programmes such as PM E-Drive and Auto PLI Policy. It will also be to be seen if the government announces policies for the production of EV components locally.
MGNREGA
It is one of the most successful schemes in India, where people in rural areas get guaranteed employment. There are many funding programmes for the scheme. In this budget, there may be possible tax cuts or an increase in MGNREGA's funding.
Loan amount threshold for NBFC sector
The current loan limit while enforcing the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act (SARFAESI) is Rs 20 lakh. There have been calls to reduce it to Rs 10 lakh. This will be a focus area during the budget speech.
Oil and Gas Sector
India’s GDP is also expected to grow to $8.6 trillion by the year 2040. By then, the primary energy demand is also expected to rise to 1,123 million tonnes.
Oil and Gas Sector
Amid such a scenario, it will be interesting to see if the government compensates companies for LPG under-recovery.
Pharma and healthcare
India's health and pharma sector is on a growing trajectory. It is targeting a revenue of Rs $320 billion by 2028. The government may announce tax deductions for the sector in the budget.
Pharma and healthcare
Some PLI schemes for anti-diabetic and weight-loss medications may enhance support for research and development.
The government may moderately increase the funding for Ayushman Bharat and institutes such as AIIMS.