The Union Budget 2025, presented by Finance Minister Nirmala Sitharaman on February 1, 2025, introduced several significant changes and initiatives. Here are 30 frequently asked questions about the budget, along with concise answers:
- What is the new income tax exemption limit?
- Income up to ₹12 lakh is now exempt from tax under the new regime. en.wikipedia.org
- Has the standard deduction changed?
- Yes, the standard deduction has increased to ₹75,000. en.wikipedia.org
- What are the revised income tax slabs?
- The new tax slabs are:
- 0% for income up to ₹4 lakh
- 5% for ₹4 lakh to ₹8 lakh
- 10% for ₹8 lakh to ₹12 lakh
- 15% for ₹12 lakh to ₹16 lakh
- 20% for ₹16 lakh to ₹20 lakh
- 25% for ₹20 lakh to ₹24 lakh
- 30% for income above ₹24 lakh en.wikipedia.org
- The new tax slabs are:
- What is the ‘Prime Minister Dhan-Dhaanya Krishi Yojana’?
- A program covering 100 districts, aiming to assist 1.7 crore farmers. en.wikipedia.org
- How has the TDS limit for senior citizens changed?
- The TDS limit on interest for senior citizens has doubled from ₹50,000 to ₹1 lakh. en.wikipedia.org
- What is the focus of the new 6-year mission in agriculture?
- To achieve self-reliance in pulses, especially Tur, Urad, and Masoor. en.wikipedia.org
- Is there any new support for women entrepreneurs?
- Yes, the ‘Mahila Udyam Nidhi’ scheme provides financial assistance and mentorship to women entrepreneurs. examscentre247.com
- What is the allocation for the National Education Mission?
- ₹60,000 crore has been allocated to enhance education quality and infrastructure. examscentre247.com
- Has the government introduced any AI initiatives?
- Yes, the ‘National AI Mission’ focuses on promoting research and development in artificial intelligence. examscentre247.com
- What is the ‘National Green Hydrogen Mission’?
- An initiative to promote hydrogen as a clean energy source, contributing to energy security and reduced carbon emissions. examscentre247.com
- What is the fiscal deficit target for 2025-26?
- The government aims to reduce the fiscal deficit to 3.0% of GDP by the end of 2025-26. examscentre247.com
- Are there any new skill development programs?
- The ‘Digital Skills Mission’ aims to enhance youth skills in emerging technologies. examscentre247.com
- What is the proposed investment for the National Infrastructure Pipeline?
- An investment of ₹100 lakh crore is proposed for critical infrastructure projects. examscentre247.com
- Is there a focus on sustainable agriculture?
- Yes, the ‘Agro-Ecology Mission’ promotes sustainable farming practices. examscentre247.com
- What is the allocation for the Pradhan Mantri Gram Sadak Yojana?
- ₹20,000 crore has been allocated to improve rural road connectivity. examscentre247.com
- How is the government supporting MSMEs?
- The ‘Technology Upgradation Scheme’ provides financial support to MSMEs for technology enhancements. examscentre247.com
- What changes have been made to TDS on rent?
- The annual TDS limit on rent has increased from ₹2.40 lakh to ₹6 lakh. en.wikipedia.org
- Are withdrawals from the National Savings Scheme tax-exempt?
- Withdrawals made on or after August 29, 2024, are exempt from tax. en.wikipedia.org
- Has the time limit to file updated tax returns changed?
- Yes, it has been extended from two years to four years. en.wikipedia.org
- Is there a new income tax bill proposed?
- A new income tax bill is set to be introduced, detailing changes and proposals in direct taxes. en.wikipedia.org
- What is the ‘PM Research Fellowship’?
- A program offering 10,000 fellowships for technological research in IITs and IISc. en.wikipedia.org
- Will there be a new gene bank for crops?
- Yes, the second gene bank with 10 lakh germplasm lines will be established for future food and nutritional security. en.wikipedia.org
- How is the government promoting electronics and EVs?
- By providing exemptions on components like open cells for LED/LCD TVs and capital goods for lithium-ion batteries.
New Tax Regime 2025: Features, Pros & Cons
The New Tax Regime was introduced in Budget 2020 and has been revised in the Union Budget 2025 to encourage taxpayers to adopt a simplified structure with lower tax rates but fewer deductions.
Features of the New Tax Regime (2025)
1. Revised Tax Slabs (FY 2025-26)
The government has modified the income tax slabs to make taxation more straightforward.
| Annual Income (₹) | Tax Rate (%) |
|---|---|
| 0 – 4,00,000 | Exempt (0%) |
| 4,00,001 – 8,00,000 | 5% |
| 8,00,001 – 12,00,000 | 10% |
| 12,00,001 – 16,00,000 | 15% |
| 16,00,001 – 20,00,000 | 20% |
| 20,00,001 – 24,00,000 | 25% |
| Above 24,00,000 | 30% |
2. Key Features of the New Tax Regime
| Feature | Description |
|---|---|
| Higher Exemption Limit | Income up to ₹12 lakh is tax-free (₹7 lakh earlier). |
| No Standard Deductions | Standard deduction of ₹75,000 applicable only to salaried taxpayers. |
| Simplified Tax Calculation | No need for multiple deductions, making tax filing easier. |
| Lower Tax Rates | Lower rates compared to the old tax regime. |
| No Major Deductions Allowed | Deductions like HRA, 80C, 80D, and housing loan interest are not applicable. |
| TDS Limit Increased | TDS threshold for senior citizens increased from ₹50,000 to ₹1 lakh. |
| Default Tax Regime | The new tax regime is the default, but taxpayers can opt for the old regime. |
Pros & Cons of the New Tax Regime
| Feature | Pros | Cons |
|---|---|---|
| Lower Tax Rates | Reduces tax liability for middle-income groups. | High-income earners may pay more tax compared to the old regime. |
| Higher Exemption Limit | ₹12 lakh tax-free helps middle-class taxpayers. | No additional exemptions for investments. |
| No Need for Investment Proof | Simplifies tax filing and reduces paperwork. | No tax benefits on long-term investments like PPF, ELSS, etc. |
| Standard Deduction for Salaried Individuals | ₹75,000 deduction provides additional savings. | Other deductions like HRA, 80C, and 80D are removed. |
| Higher TDS Limit for Senior Citizens | More savings for senior citizens from fixed deposits. | No tax benefits for medical expenses or insurance premiums. |
| Simplified Compliance | No need to track multiple exemptions, making it easier for salaried individuals. | Those with multiple deductions (like home loans) may pay more tax. |
| No Deductions on Home Loans | Reduces complexity in tax filing. | Homeowners lose tax benefits on loan interest (Section 24). |
Who Should Choose the New Tax Regime?
- Salaried Individuals without Investments – Those who don’t claim multiple deductions.
- Young Professionals – Early-career individuals with fewer financial commitments.
- Senior Citizens – Benefit from increased TDS exemption.
Who Should Stick to the Old Regime?
- Taxpayers with High Investments – Those utilizing deductions under 80C, 80D, HRA, etc.
- Home Loan Borrowers – Can benefit from Section 24 (₹2 lakh interest deduction).
- Medical Insurance Holders – If claiming 80D (Medical Insurance) benefits.
Conclusion
The New Tax Regime (2025) simplifies tax filing but removes deductions. Taxpayers should calculate their tax liability under both regimes and choose the one that offers the most savings.
