The Union Budget 2025 INDIA Comparing to the past Year budget with Explanation....

            The Union Budget 2025 INDIA Comparing to

 the past Year budget with Explanation

 The Union Budget 2025, unveiled by Finance Minister Nirmala Sitharaman, introduces significant reforms aimed at stimulating economic growth, enhancing the ease of doing business, and providing substantial relief to the middle class. This budget reflects a strategic shift from the previous year, focusing on tax reductions and increased support for key sectors.

Comparative Analysis: Union Budgets 2024 vs. 2025

The 2024 budget emphasized fiscal consolidation, with a fiscal deficit target of 4.9% of GDP and a capital expenditure allocation of ₹11.11 lakh crore. It focused on infrastructure development, rural employment, and agricultural productivity. In contrast, the 2025 budget shifts towards stimulating domestic demand through significant personal income tax cuts and increased support for businesses. The fiscal deficit target is further reduced to 4.4% of GDP, indicating continued commitment to fiscal discipline.

Key Highlights of Union Budget 2025

1. Taxation Reforms

   • Personal Income Tax Relief: The income tax exemption threshold has been raised from ₹7 lakh to ₹12 lakh under the new tax regime, providing substantial relief to the middle class. This move is expected to increase disposable income, thereby boosting household consumption and savings.

     
     

   • Revised Tax Slabs: The tax slabs have been restructured to reduce the tax burden across various income groups.

     Income Range (₹)	Tax Rate (2024)	Tax Rate (2025)
     Up to 3 lakh	Nil	Nil
     3 lakh to 7 lakh	5%	Nil
     7 lakh to 10 lakh	10%	Nil
     10 lakh to 12 lakh	15%	Nil
     12 lakh to 15 lakh	20%	10%
     Above 15 lakh	30%	20%

     This restructuring aims to simplify the tax system and encourage compliance.

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2. Support for Businesses and Entrepreneurs

   • MSME Support: The Credit Guarantee Scheme for Micro, Small, and Medium Enterprises (MSMEs) has been enhanced, increasing the credit guarantee cover from ₹5 crore to ₹10 crore. This initiative is designed to facilitate easier access to credit for small businesses, promoting entrepreneurship and job creation.

     
     

   • Startup Ecosystem: The budget abolishes the 'angel tax' for all classes of investors, a move anticipated to boost startup investments and foster innovation. Additionally, the period for startups to avail tax benefits has been extended until April 1, 2030, providing a longer window for emerging businesses to grow.

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3. Agricultural Initiatives

   • Prime Minister Dhan-Dhaanya Krishi Yojana: This new scheme aims to enhance agricultural productivity through modern techniques and sustainable practices. The program includes initiatives such as the development of high-yielding seed varieties and increased fertilizer production to support farmers.

     
     

   • Self-Reliance in Pulses: A six-year mission focusing on achieving self-sufficiency in pulses like Tur, Urad, and Masoor has been launched. This initiative seeks to reduce dependence on imports and stabilize domestic prices.

     
     

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4. Infrastructure and Urban Development

   • Urban Challenge Fund: An Urban Challenge Fund of ₹1 lakh crore has been established to support city redevelopment projects, aiming to modernize urban infrastructure and improve living standards.

     
     

   • Regional Connectivity: The UDAN scheme has been modified to enhance regional air connectivity, adding 120 new destinations over the next decade. This expansion is expected to boost tourism and economic development in underserved regions.

     
     

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Benefits for Business Persons, Traders, and Freelancers

The 2025 budget introduces several measures beneficial to business persons, traders, and freelancers:

• Simplified Taxation: The introduction of a new income-tax bill aims to simplify the tax regime and reduce litigation, making it easier for businesses and individuals to comply with tax laws.

• Enhanced Credit Access: The increased credit guarantee for MSMEs facilitates easier access to financing, enabling business expansion and operational improvements.

• Support for Startups: The abolition of the angel tax and extended tax benefits provide a more conducive environment for startups and freelancers, encouraging innovation and entrepreneurship.

• Infrastructure Development: Investments in urban redevelopment and regional connectivity can lead to improved business opportunities and market access for traders and entrepreneurs.

Conclusion

The Union Budget 2025 marks a strategic shift towards stimulating economic growth through tax reforms, enhanced support for businesses, and significant investments in infrastructure and agriculture. By focusing on these areas, the government aims to foster a more dynamic and inclusive economy, benefiting a broad spectrum of stakeholders, including business persons, traders, freelancers, and the middle class.

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