Budget 2025: Key Highlights and Implications
No Tax for ₹12 LPA – Is It Really Tax-Free?
As per Finance Minister Nirmala Sitharaman’s speech, individuals earning up to ₹12 lakh per annum (LPA) are said to be exempt from income tax. However, let’s break it down:
- ₹0 – ₹4 LPA → No tax
- ₹4 – ₹8 LPA → 5% of ₹4 LPA = ₹20,000
- ₹8 – ₹12 LPA → 10% of ₹4 LPA = ₹40,000
- Total Tax Payable → ₹60,000
If you are employed, this amount will be deducted as TDS (Tax Deducted at Source) from your salary. While you will get a refund when filing your income tax return, the 4% CESS on ₹60,000 (i.e., ₹2,400) is non-refundable.
Thus, while the government promotes it as a "tax-free budget," you still bear the burden of the 4% CESS.
How Will This Budget Boost the Economy?
With increased disposable income, the middle class and young professionals will likely spend more on consumer-driven sectors such as clothing, household essentials, and food.
For example, individuals from Tier-2 and Tier-3 cities who previously purchased refined cooking oil may now opt for cold-pressed oil, a healthier and more premium alternative.
What’s in It for Farmers?
Farming in India remains challenging due to **low productivity, unpredictable weather, lack of storage,prices. To address these issues, the government has introduced several initiatives under the
National Mission on Agriculture:
1. National Mission on High-Yielding Seeds
- The government plans to introduce high-quality seeds that offer better yields, are pest-resistant, and can withstand harsh weather conditions.
- This initiative aims to increase farm productivity and reduce dependency on expensive imported seeds.
2. Enhanced Credit through Kisan Credit Card (KCC)
- The loan limit for farmers has been increased from ₹3 lakh to ₹5 lakh at lower interest rates.
- This financial boost will help farmers invest in better irrigation equipment, purchase high-quality seeds, and expand their farms without relying on private lenders.
3. Focus on Specific Crops
- The government is committed to boosting the production of pulses like Tur, Urad, and Masoor to reduce dependency on imports.
- A Makhana Board will be established in Bihar to promote large-scale Makhana cultivation and exports.
Support for MSMEs and Startups
The government has made it easier for Micro, Small, and Medium Enterprises (MSMEs) and startups to access funding, encouraging business growth and innovation.
1. Increased Loan Limits
- MSMEs can now avail loans up to ₹10 crore (previously ₹5 crore).
- Startups can now access funding up to ₹20 crore (previously ₹10 crore).
2. Revised Investment and Turnover Limits
| Sector | Investment Limit (Previous) | Investment Limit (Revised) | Annual Turnover (Previous) | Annual Turnover (Revised) |
|---|---|---|---|---|
| Micro | ₹1 crore | ₹2.5 crore | ₹5 crore | ₹10 crore |
| Small | ₹10 crore | ₹25 crore | ₹50 crore | ₹100 crore |
| Medium | ₹50 crore | ₹125 crore | ₹250 crore | ₹500 crore |
3. What Does This Mean for Businesses?
With higher investment and turnover thresholds, businesses can:
- Expand operations without losing MSME benefits.
- Gain easier access to government schemes and subsidies.
- Secure funding with reduced bureaucratic hurdles.
Conclusion: A Growth-Oriented Budget
The 2025 Union Budget aims to empower middle-class taxpayers, farmers, and businesses by:
✅ Increasing disposable income for salaried individuals.
✅ Providing better financial support to farmers.
✅ Making MSME and startup loans more accessible for business growth.
While the "tax-free" claim for ₹12 LPA earners is slightly misleading due to CESS deductions, the overall impact of the budget is positive for economic growth.
Would you like any further refinements or additional insights? 😊
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