Finance Minister Nirmala Sitharaman announced an allocation of ₹26,000 crore for highways in Bihar and ₹15,000 crore for Andhra Pradesh development in the current fiscal year. The Union Budget 2024-25 highlighted nine priority areas, including infrastructure and urban development.
The government’s capital expenditure for the fiscal year 2025 is set at ₹11.11 lakh crore, representing 3.4% of GDP. The fiscal deficit target is estimated at 4.9% of GDP, lower than the 5.1% announced in the interim Budget.
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A provision of ₹1.5 lakh crore is made for long-term interest-free loans to support state governments’ infrastructure investment. Additionally, the complete removal of angel taxes on startups has been announced to encourage entrepreneurship and innovation.
Personal Income Tax
The standard deduction under the new tax regime has been raised to ₹75,000 crore. The revised tax slabs are as follows:
Revised Tax Slabs for FY25
| Income Range | Tax Rate |
| 0-3L | Nil |
| 3-7L | 5% |
| 7-10L | 10% |
| 10-12L | 15% |
| 12-15L | 20% |
| 15L+ | 30% |
Salaried employees will save up to ₹17,500 annually due to these changes proposed in the FY25 Budget. The deduction on family pensions for pensioners is also increased from ₹15,000 to ₹25,000, benefiting about four crore individuals.
Housing and Infrastructure
The Finance Minister has proposed ₹10 lakh crore for the PM Awas Yojana – Urban 2.0 to address the housing needs of one crore urban poor and middle-class families. Phase IV of the Pradhan Mantri Gram Sadak Yojana (PMGSY) will be launched to provide all-weather connectivity to 25,000 rural habitations.
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Manufacturing and Financial Reforms
To boost solar cell and panel manufacturing, the list of exempted capital goods will be expanded. Employer contributions to the NPS now have a higher deduction limit, increased from 10% to 14%. The STT on futures has increased by 0.02%, and options by 0.1%, while income from share buybacks will be taxed in the recipients’ hands.
Mudra Loans
The Budget 2024-25 has enhanced the limit for Mudra loans under the ‘Tarun’ category from ₹10 lakh to ₹20 lakh. These loans are provided to MSMEs to support their growth and development.
Capital Gains Tax
Short-term gains on financial assets will now attract a 20% tax rate. Long-term gains on all financial and non-financial assets will be taxed at 12.5%. The exemption limit for capital gains on financial assets has been increased to ₹1.25 lakh per year.
