Alright, folks! The Finance Minister just dropped the Union Budget 2025, and let’s be real, It’s a financial rollercoaster. If you’re thinking, “Ugh, budgets are just boring money talk,” don’t worry. We’re here to make it simple! Whether you’re a student trying to figure out taxes or just nosy about where the government spends its cash, buckle up!
What’s Changing in Your Taxes?
Biggest update? From FY26, under the new tax regime, if your income is up to ₹12 lakh, you pay exactly… zero income tax. Sounds amazing, right? But hold on—there’s still a 10% tax for those earning between ₹7-12 lakh.
Wait, what? How does this sorcery work? Thanks to the rebate under Section 87A, if your taxable income (after deductions) is ₹12 lakh or below, the taxman waves you off with a “carry on, citizen.”
Example time: You earn ₹12.75 lakh. Standard deduction kicks in, slicing ₹75,000 off, bringing you to ₹12 lakh. Congrats! No tax for you. But, if you dare earn ₹13 lakh, you’re out of the rebate club and must pay up according to slab rates.
Important catch: This rebate doesn’t apply to capital gains. So, if you’re making money from stocks or real estate, the government still wants a piece of that pie.
For those sticking to the old tax regime (all three of you), there’s one tiny win: If you invest in the Vatsalya NPS scheme (a pension scheme for minors), you can now claim a ₹50,000 tax deduction,just like the regular NPS scheme.
TDS & TCS Just Got Less Annoying
TDS, that sneaky little thing nibbling at your earnings, just got a makeover:
- Senior citizens earning interest? No TDS unless it crosses ₹1 lakh (was ₹50,000 before).
- Renting out property? The TDS limit jumps from ₹2.4 lakh to ₹6 lakh. More money in your pocket!
Sending money abroad? The TCS threshold rises from ₹7 lakh to ₹10 lakh. - And in an absolute blessing for students, TCS on education loans up to ₹10 lakh is gone. Studying abroad just got a little less financially painful.
Investments in Education & Social Welfare – The Government Goes Big!
- Shaksham Anganwadi & Poshan 2.0 – 8 crore kids and 1 crore women get better nutrition. No more skipping meals!
- Atal Tinkering Labs – 50,000 new labs for students to play mad scientist and build robots. Cool, right?
- BharatNet Broadband – High-speed internet for rural schools. No more excuses for not doing homework.
- Bharatiya Bhasha Scheme – More Indian-language books go digital. Finally, something to read other than boring textbooks.
Education & Skilling – The Future Workforce Gets an Upgrade
- National Centers of Excellence for Skilling – Five top-tier training centers for hands-on learning. Basically, the Hogwarts of technical skills.
- IIT Expansion – More seats, more students, more stress. Five IITs expand to accommodate 1.65 lakh students.
- AI in Education – ₹500 crore for an AI Center of Excellence. The robots are coming, but they’re here to teach… for now.
Healthcare – Because Doctors Are in High Demand
- Medical Education Boom – 10,000 new medical seats this year. In five years? A whopping 75,000 more!
- AI in Medical Training – Three new AI centers will help students learn smarter, not harder.
Railways & Defense – The Silent Treatment
Gold & Silver – No Discounts, Just the Usual Pain
Make in India – More Local, Less Imported
- EV & Mobile Batteries – Import duties cut to boost local production. More electric cars, fewer imported parts.
- Lithium-ion Battery Scrap, Lead, Zinc – No more import duties. Battery makers, rejoice!
- Life-Saving Drugs – Cancer & Rare Disease Meds? Customs duty waived. Health wins this round.
- Total tax cuts? ₹1 lakh crore in direct taxes, ₹2,600 crore in indirect taxes. But somehow, the fiscal deficit is expected to shrink to 4.4% of GDP in FY26 from 4.8% this year. How? Magic.
How Will the Government Make Up for Lost Tax Revenue?
The government’s plan to keep the money flowing:
- More dividends from public sector banks & RBI – When in doubt, take from the banks.
- Businesses pay more taxes as the economy grows – That’s the plan, anyway.
- No tax relief for companies – They’re on their own.
- GST collections are to rise. Lower income tax = more spending = more GST. Genius!.
Sector-Specific Announcements – The Wild Cards
- Insurance – Foreigners can now own 100% of Indian insurance companies. But all the money stays in India.
- Nuclear Power – ₹20,000 crore for small modular reactors, targeting 100 GW by 2047. Tiny but mighty!
- Gig Workers – Delivery people & freelancers get ID cards and health insurance. No more “invisible workforce.”
- Toys & Footwear – The government wants fewer imports from China. Time for more “Made in India” dolls and sneakers!
- Geospatial Planning – Fancy maps for better city planning. Finally, a traffic plan that (hopefully) makes sense.
Infrastructure & Fiscal Discipline – Keeping the Wallet in Check
- Debt-to-GDP Ratio – Targeting a drop from 57% in FY25 to 47-52% in the coming years.
- ₹50,000 crore through asset monetization – Selling assets for cash. Smart move?
- ₹10 lakh crore infrastructure plan – Huge investment, but most of it will rely on… private companies.
- ₹1.5 lakh crore interest-free loan for states – “Here, take this money and build something nice.
UDAN Scheme – Making Flying Less of a Luxury
The UDAN regional air travel scheme gets extended, aiming to connect 120 more destinations and fly 4 crore passengers in the next 10 years. But, budget cut alert: from ₹800 crore in FY25 to ₹540 crore in FY26. Looks like private airlines need to step in.
Special Focus on Bihar & The Northeast – A Little Extra Love
- Makhana Board – Bihar farmers get help in pricing and production of makhana (fox nuts).
- Western Kosi Canal Project – 50,000 hectares of farmland will finally get water.
- IIT Patna Expansion – More seats, more students, more engineering dreams.
- Assam Urea Plant – 12.7 lakh metric tonnes of fertilizer production = fewer imports, more self-sufficiency.
Final Takeaway
The Budget 2025 packs a mix of tax relief, economic growth plans, and sectoral boosts. While individual taxpayers get a major breather, the government has balanced the books by increasing non-tax revenues and relying on higher business earnings. As always, the real impact will depend on how effectively these measures are implemented over the next year.
FAQ
The government kept it unchanged to curb smuggling and boost tax revenue, despite earlier expectations of a cut.
Foreign investors can fully own insurance firms, but all premiums must stay in India.
₹20,000 crore is allocated for small modular reactors, targeting 100 GW capacity by 2047.
Answer: They’ll receive official identity cards and Jan Arogya health insurance.
To reduce reliance on Chinese imports and support domestic manufacturing.
A plan to modernize land records and improve urban infrastructure.
They aim to boost jobs, investment, and industry modernization for long-term growth.
2 Responses
Excellent presentation. Easy to understand 🙂
Nice blog 👌 😊