Union Finance Minister Nirmala Sitharaman presenting the Union Budget, her eighth consecutive one in major relief for the middle class announced that no income tax would be payable up to income of Rs 12 lakh. She said that the government to forgo Rs 1 lakh crore on direct taxes, Rs 2,600 crore on indirect taxes on account of changes in tax rates
She said that the annual limit for TDS on rent has been raised from Rs 2.40 lakh to Rs 6 lakh, benefiting small taxpayers receiving smaller payments.36 life-saving drugs and medicines fully exempted from basic custom duty and only a concessional rate to be imposed on 6 life saving drugs, which will provide relief to patients, particularly those suffering from cancer, rare diseases, and other severe chronic diseases.
Nirmala Sitharaman said: “My tax proposals are driven by the goal of enhancing ease of doing business, encouraging voluntary compliance, and reducing the overall compliance burden. These proposals aim to reform personal income tax, particularly benefiting the middle class, streamline TDS and TCS to address challenges, and promote employment and investment growth.”
In a major reform announcement, FM Nirmala Sitharaman says that the FDI limit in the insurance sector will be raised from 74% to 100%. She announced a Nuclear Energy Mission for research, development of small modular reactors with an outlay of Rs 20,000 crore. She said that the government proposes to introduce a new Income Tax Bill next week.
Nirmala Sitharaman announced that the government will transform India into a large logistics organisation with 1.5 lakh rural post offices. She also announced the government’s plan to set up a urea plant with a 12.7 lakh tonne capacity in Assam.
The government will provide Rs 20,000 crore for promoting innovation in partnership with the private sector, Finance Minister Nirmala Sitharaman said. The government will set up a new centre of excellence for artificial intelligence (AI) for education with an outlay of Rs 500 crore, she added.
Sitharaman also revealed plans for five National Centres of Excellence for Skilling, designed to equip youth with industry-relevant expertise. “These centres will be set up with global partnerships to support Make for India, Make for the World manufacturing,” Sitharaman stated. The initiative will cover curriculum design, training of trainers, a skill certification framework, and regular assessments.
She also said the government will launch an export promotion mission with specified targets for easy credit access. Sitharaman further said the Centre will set up a national framework for promoting global capability centres in emerging Tier-II cities.
This is also the Narendra Modi government’s first full-year budget in the third term and is being presented against the backdrop of geopolitical uncertainties and slowing of the economic growth rate to a four-year low.