New Delhi, February 01, 2025.
In a big announcement for middle-class during her budget speech, Union Finance Minister Nirmala Sitharaman on Saturday (1 February) announced that no income tax will be levied on income up to Rs 12 lakh.
There will be no income tax payable up to Rs 12 lakh – up to Rs 12.75 lakh including standard deductions, under the new tax regime, the FM announced.
Sitharaman also announced revisions to the tax slabs (applicable to the new regime only).
Under the revised slab, tax on income between Rs 8 and Rs 12 lakh will be 10 per cent.
Between Rs 12 lakh and Rs 16 lakh it will be 15 per cent.
Between Rs 16 lakh and Rs 20 lakh it will be 20 per cent.
Between Rs 20 lakh and Rs 25 lakh it will be 25 per cent.
Above Rs 25 lakh and Rs 25 lakh it will be 30 per cent.
The government will launch a new Funds of Funds for Startups with a contribution of ₹10,000 crore, announced FM Sitharaman on Saturday.
Chirag Shah Chirag Shah, Fundraising & Strategy at BlackSoil welcomed the announcement and said that the move will “drive innovation across sectors like fintech, health tech, and clean energy, providing crucial support for early-stage startups that face difficulties securing private investments.”
“The enhanced support for MSMEs, which are vital to our manufacturing and export sectors, underscores the government’s commitment to fostering entrepreneurship and innovation. The establishment of a ‘Fund of Funds for Startups’ will empower diverse groups, including women and marginalized communities, to drive economic growth,” said Dhruvil Sanghvi, CEO of LogiNext.
Upasna Bhardwaj, Chief Economist, Kotak Mahindra Bank said, “The Union Budget has struck the right chord balancing the fiscal prudence with supporting the slowdown in private demand. The re-emphasis on fiscal consolidation roadmap over the next few years too remains comforting for the markets.”
Shanti Ekambaram , Deputy Managing Director, Kotak Mahindra Bank “The Union Budget strikes a balance between fiscal prudence and growth, with a focus on boosting middle-class consumption, savings, and investments through direct tax measures. The commitment to higher capital expenditure at Rs 11 lakh crore, alongside a reduction in fiscal deficit to 4.4%, is a welcome move. Additionally, the budget’s emphasis and measures on the ‘engines of growth’ MSMEs, Agriculture, Investment, Exports and ease of doing business is crucial to stimulate private sector investments. While ‘accelerating growth’ remains a key focus, the balance between fiscal discipline and growth measures will be critical for sustaining India’s economic momentum.”
Manish Kothari, Head – Commercial Banking, Kotak Mahindra Bank Said;The Union Budget 2025 is quite balanced and directionally positive for the medium and long-term and will consolidate the growth pillars. While the core drivers remain the same as last budget; Agriculture, MSMEs, Investments and Exports, the sustained focus on Financial Inclusion (both, urban and rural), Grow in India, Make in India, ease of compliance and ease of doing business clearly support the vision to create a Viksit Bharat. The fiscal prudence, pegging the fiscal deficit for FY26 at 4.4%, lower than 4.8% for FY25 without dropping the ball on capex (with a Rs 11.21 lakh crore outlay – up 10% YoY), is equally impressive. But the big twist or the “tadka” of Rs 1 lakh cr – through the income tax rationalisation – will certainly provide a huge fillip to the lagging private consumption.”
Pawan Munjal Executive Chairman – Hero MotoCorp Said’ The Union Budget 2025 outlines a bold vision for Viksit Bharat, focused on eradication of poverty, quality education, affordable healthcare, and women’s empowerment. By prioritizing rural prosperity and establishing India as a global agricultural powerhouse, the budget fosters inclusive growth that reaches all corners of the nation. A bold push towards manufacturing excellence, supported by strategic investments in infrastructure, EV technology, and MSME growth, strengthens India’s industrial backbone. This people-centric vision strikes a perfect balance between fiscal discipline and sustainable economic growth.
The elimination of income tax for individuals earning up to ₹12 lakh will spur economic activity and unlock consumer potential, while simplified tax regulations foster ease of doing business. Meanwhile, green energy investments and EV policy support accelerate India’s shift to a clean, sustainable economy, positioning it as a leader in innovative mobility.
The automobile sector stands poised for a significant leap forward, with substantial investments in green energy and a clear policy framework to support energy storage solutions. These measures will accelerate India’s transition to a clean mobility future, reinforcing its commitment to sustainability and technological innovation.
In essence, this budget is a bold fusion of foresight, strategy, and ambition, perfectly aligned with Prime Minister Modi’s vision for a developed India by 2047—a nation leading in innovation, inclusive growth, and global influence. It’s not just a financial plan, but a transformative blueprint for national progress and the empowerment of every citizen.”