The Union Budget 2025 has introduced several measures to boost economic growth, promote innovation, and provide relief to taxpayers. With a focus on empowering individuals, supporting businesses, and driving technological advancements, this year’s budget has brought in many significant changes. Here’s a simplified overview of the major updates and their potential impact.
Major Tax Reforms for Individuals
1. Section 80D Deductions: More Savings on Health Insurance
The deduction limit for health insurance premiums under Section 80D has been increased. For individuals below 60 years, the limit is now ₹35,000, up from ₹25,000. Senior citizens can claim up to ₹70,000, compared to the earlier limit of ₹50,000. This change encourages people to prioritize health coverage while reducing their tax liabilities in light of the updates from the Union Budget 2025.
2. Home Loan Interest Deductions: Boost for Homebuyers
Homebuyers have received a much-needed benefit with an increase in the home loan interest deduction limit under Section 24(b). The new limit is ₹2,50,000, up from ₹2,00,000, for self-occupied properties. This move, announced in the Union Budget, aims to make homeownership more affordable and stimulate growth in the housing market.
3. Section 80C Limit Revision: More Tax-Saving Options
The limit under Section 80C has been revised from ₹1,50,000 to ₹2,00,000. Taxpayers can now save more by investing in instruments like Public Provident Fund (PPF), National Savings Certificates (NSC), Equity-Linked Savings Schemes (ELSS), and life insurance policies. This revision, part of the Union Budget, is expected to encourage higher savings among individuals.
4. Simplified Tax Deducted at Source (TDS)
To make TDS compliance easier, the government has introduced a unified online platform. This will help resolve discrepancies in TDS payments and refunds. Additionally, the threshold for some TDS deductions has been raised, providing relief to freelancers and small businesses. These changes come as part of the Union Budget 2025 initiatives.
Business-Friendly Reforms
5. Corporate Tax Rate Extension
The government has extended the reduced corporate tax rate of 15% for new manufacturing units until March 31, 2026, to support India’s goal of becoming a global manufacturing hub. Additionally, it has reduced the corporate tax rate for small and medium enterprises (SMEs) to 22%, allowing more resources to be allocated for their growth and job creation. These reforms align with the goals outlined in the Union Budget 2025.
6. Research and Development (R&D) Incentives
The budget has introduced new incentives to promote innovation. As a result, companies investing in R&D can now claim a 200% weighted tax deduction on eligible expenses. Furthermore, this step, highlighted in the Union Budget, is expected to drive advancements in key sectors such as technology, pharmaceuticals, and renewable energy. Ultimately, it will position India on the global innovation map.
Other Noteworthy Announcements
- Digital Infrastructure: Increased allocations for Digital India aim to expand internet access and improve digital literacy, especially in rural areas, as discussed in the Union Budget 2025.
- Renewable Energy: The government has announced significant investments in solar and wind energy projects to promote sustainability. These investments are a key part of the Union Budget 2025.
- Employment Creation: Additional funds have been allocated to skill development programs, focusing on emerging fields like AI, robotics, and green technology, as highlighted in the Union Budget announcements.
Conclusion
The Union Budget 2025 offers a balanced approach to growth and development. Moreover, from increasing tax savings for individuals to providing incentives for businesses, it addresses key economic and social priorities. By encouraging innovation, homeownership, and savings, the budget aims to pave the way for a brighter and more inclusive future. Whether you are a taxpayer, an entrepreneur, or an investor, these updates promise significant benefits that contribute to both individual growth and national progress.
