
The 2025 Union Budget (FY2025-26) is here. Union Finance Minister Nirmala Sitharaman presented her eighth consecutive Union budget on Saturday, February 1. This is also the 14th consecutive budget under the Modi rule.
In a relief to the salaried middle class, Union Finance Minister Nirmala Sitharaman announced that annual income of up to Rs 12 lakh would be exempt from IT under the new income tax regime.
Sitharaman stressed that the Union Budget is focused on accelerating India’s growth as an economic giant toward becoming a ‘Viksit Bharat’ (developed India).
While some items have become cheaper, some have experienced a price rise. Let’s look at the items that are now cheaper and those that are now costlier.
What is cheaper?
- The budget stated that 36 life-saving drugs would be fully exempted from basic customs duties. This includes drugs that treat cancer, chronic disease medicines and so on.
- Sitharaman has announced the price reduction in basic customs duty (BCD) of electronic goods like LED/LCD TVs to 5 per cent.
- Scraps of lithium-ion battery, lead, Zinc, Cobalt powder waste and 12 other minerals have also been exempted from BCD.
- The Budget has exempted 35 additional goods for electric vehicle (EV) battery manufacturing and 28 additional goods for mobile phone battery.
- Frozen Fish Paste (Surimi) which earlier had a custom duty of 30 per cent for the purpose of manufactured export has been reduced to 5 per cent.
- Synthetic flavouring essences.
- Leather jackets, belts and shoes.
- Raw materials used for manufacturing ships are now exempted from BCD for an additional 10 years.
- Marines products.
What is costlier?
Interactive flat panel display (IFPD). An IFPD is a large touchscreen display designed for interactive collaboration, presentations, and digital whiteboarding.
It is commonly used in classrooms, boardrooms, and conference settings as a modern replacement for traditional whiteboards, projectors, and interactive whiteboards.
Knitted fabrics. For example, T-shirts, salwar kameez, dresses, leggings, bedsheets, curtains, sweaters, hoodies, winter jackets, Gym wear, wedding dresses, tracksuits home decor like bedsheets, curtains, cushions etc.
Union budget for middle class
As earlier mentioned, annual income of up to Rs 12 lakh has been exempted from income tax and rejigged tax slabs.
Income Levels | Tax Slabs |
Rs 0-4 lakh | NIL |
Rs 4-8 lakh | 10 per cent |
Rs 8-12 lakh | 16 per cent |
Rs 12-16 lakh | 20 per cent |
16-20 lakh | 25 per cent |
Rs 20-24 lakh | 30 per cent |
Above 24 lakh | 30 percent |
“The new structure will substantially reduce the taxes of the middle class and leave more money in their hands, boosting household consumption, savings and investment,” Sitharaman said in her Budget speech.
The new income tax regime offers lower tax rates and only a standard deduction of Rs 75,000 and a Rs 15,000 deduction for family pension.
However, the Budget has not made any changes in tax slabs under the old income tax regime, which includes a host of tax exemptions and deductions.
Sitharaman in the 2025-26 Budget promised to bring a simpler, less voluminous new law to replace six decades-old law governing income tax, saying it will have the spirit of “Nyay” (justice) and will work on the principle of “trust first, scrutinize later”.
Union budget for gig workers
For gig workers, Sitharaman announced a social security plan. She said that the gig workers of online platforms will be provided with ID cards on the e-Shram portal and will be extended healthcare benefits under the PM Jan Arogya Yojana. This is expected to help about 1 crore gig workers.
Union budget on government schools
Sitharaman announced government secondary schools will receive broadband connectivity, a major thrust that will bring the students at par with their private counterparts and also open new vistas of opportunities for them. “50,000 Atal tinkering labs will be set up in schools to foster curiosity and scientific temper,” she said.
“We propose to implement the Bharatiya Bhasha Pustak scheme to help students understand subjects in their language,” she added stressing the importance of local language.
The Union Finance Minister also spoke about the expansion capacity of higher education institutions. “Additional infrastructure will be created in 5 IITs created after 2014 for 6,500 students,” Sitharaman announced.