Finance Minister Nirmala Sitharaman presented the Union Budget for FY25. The budget emphasizes employment, skills development, and support for MSMEs, while noting that inflation is stable and progressing towards the 4% target.
Key highlights include:
The standard deduction for salaried employees will increase to ₹75,000 from ₹50,000 under the new income tax regime for FY25. The deduction for employer contributions to the National Pension System (NPS) will increase to 14% from 10% of the salary. Additionally, employers will be allowed to deduct up to 14% of the salary from their income for this purpose. The angel tax will be eliminated for all types of investors, and the corporate tax rate for foreign companies will be reduced from 40% to 35%. Three new employment-related incentives will be introduced: a one-month wage subsidy for new entrants to the workforce, incentives for job creation in manufacturing, and reimbursement for employer EPFO contributions. Industrial parks will be established in or around 100 cities. A total of ₹1.52 lakh crore will be allocated to agriculture and related sectors, including the establishment of 10,000 bio research centres.
The corporate tax rate for foreign companies will be lowered from 40% to 35%. Over ₹3 lakh crore will be allocated to initiatives supporting women’s development. Credit support for MSMEs during challenging times will be provided through a government-backed fund. The Small Industries Development Bank of India (SIDBI) will expand its reach by opening new branches, with 24 new branches set to launch in FY25.
