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Finance Minister Nirmala Sitharaman will present her ninth consecutive Union Budget today, February 1, 2026, marking another key moment in the government’s economic roadmap. With taxpayers, businesses and markets closely watching for fresh announcements for the next financial year, expectations are running high on tax relief, spending priorities and growth measures. Before the finance minister outlines her plans for FY27, here is a look back at the key announcements made in last year’s Budget and how they went on to shape policy decisions, reforms and economic trends over the past year.
Also Read: Catch all the live updates about Budget 2026 here
Sitharaman presented the first full Union Budget of the Modi 3.0 government on February 1, 2025, with a clear push towards middle-class tax relief, higher capital spending, manufacturing, and jobs. The Budget was framed around the GYAN vision — Garib, Yuva, Annadata and Nari Shakti — while also carrying targeted announcements for Bihar, which heads to Assembly elections later this year.
➤ The headline announcement was major tax relief for individuals. Under the new tax regime, income up to ₹12 lakh a year was made completely tax-free. For salaried taxpayers, the standard deduction of ₹75,000 effectively pushes the zero-tax limit to ₹12.75 lakh.
Also read: Budget 2026 Date & Time: When will Finance Minister Nirmala Sitharaman present the Budget Speech
➤ A new Income Tax Bill is set to be introduced to simplify slabs, rates, and compliance.
➤ New tax slabs under the new regime
➤ The government said a ₹12 lakh taxpayer will save about ₹80,000 in tax, while those earning ₹18 lakh and ₹25 lakh could see savings of ₹70,000 and ₹1.1 lakh respectively.
TDS, TCS and compliance made easier
➤ Several changes were announced to reduce compliance burden:
➤ TDS and TCS rules rationalised
➤ TCS on education remittances and education loans (up to ₹10 lakh) removed
Also Read: Budget 2026 Live Streaming: When & where to watch FM Nirmala Sitharaman’s Budget speech online free
➤ TCS threshold raised from ₹7 lakh to ₹10 lakh
➤ Annual TDS limit on rent increased to ₹6 lakh
➤ Time limit to file updated income tax returns extended to four years
➤ Higher TDS to apply only in non-PAN cases
➤ Tax benefits allowed for two self-occupied houses
➤ For senior citizens, the tax deduction limit was doubled to ₹1 lakh.
➤ Customs duty cuts and manufacturing push
➤ 36 life-saving drugs made duty-free
➤ Customs duty cut on lithium batteries and cobalt powder
➤ Reduced basic customs duty on several EV, electronics and telecom components
➤ Open-cell manufacturing for TVs exempted from customs duty
➤ Additional capital goods exempted for EV and mobile battery manufacturing
➤ The government also committed to removing multiple cesses and surcharges, allowing not more than one levy per item.
➤ FY25 fiscal deficit pegged at 4.8%, with a target of 4.4% in FY26
➤ FY26 expenditure estimated at ₹50.65 lakh crore
➤ Net market borrowing set at ₹11.54 lakh crore
➤ Asset monetisation plan to raise ₹10 lakh crore
➤ National Manufacturing Mission announced: Focus areas include
➤ A dedicated focus product scheme for footwear and leather aims to create 22 lakh jobs and boost exports.
➤ MSMEs, startups and gig workers get support
➤ MSME classification limits enhanced
➤ Credit guarantee cover doubled to ₹10 crore
➤ New ₹10,000 crore fund-of-funds for startups
➤ Customised credit cards for micro enterprises
➤ Term loans up to ₹2 crore for first-time women, SC and ST entrepreneurs
➤ Gig workers will get social security cover, ID cards, and access to government services.
➤ ₹1.5 lakh crore in 50-year interest-free loans to states
➤ A ₹1 lakh crore Urban Challenge Fund for next-generation cities
➤ A Maritime Development Fund of ₹25,000 crore
➤ 50,000 new Atal Tinkering Labs in schools
➤ 10,000 tech fellowships at IITs and IISc
➤ Centre of Excellence in AI for education
➤ 10,000 new medical seats in FY26
➤ Day-care cancer centres in district hospitals
➤ Expanded Kisan Credit Scheme loan limits
➤ New missions for pulses, fisheries, fruits and vegetables
➤ A Makhana Board will be set up in Bihar, alongside investments in irrigation and crop diversification.
➤ New greenfield airports and Patna airport expansion
➤ Western Koshi Canal project support
➤ New food technology institute
➤ Expansion of IIT Patna infrastructure
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Sitharaman presented the first full Union Budget of the Modi 3.0 government on February 1, 2025, with a clear push towards middle-class tax relief, higher capital spending, manufacturing, and jobs. The Budget was framed around the GYAN vision — Garib, Yuva, Annadata and Nari Shakti — while also carrying targeted announcements for Bihar, which heads to Assembly elections later this year.
Budget Highlights 2025: Quick Recap
➤ Big relief for taxpayers: No tax up to ₹12 lakh➤ The headline announcement was major tax relief for individuals. Under the new tax regime, income up to ₹12 lakh a year was made completely tax-free. For salaried taxpayers, the standard deduction of ₹75,000 effectively pushes the zero-tax limit to ₹12.75 lakh.
Also read: Budget 2026 Date & Time: When will Finance Minister Nirmala Sitharaman present the Budget Speech
➤ A new Income Tax Bill is set to be introduced to simplify slabs, rates, and compliance.
➤ New tax slabs under the new regime
- Up to ₹4 lakh: Nil
- ₹4–8 lakh: 5%
- ₹8–12 lakh: 10%
- ₹12–16 lakh: 15%
- ₹16–20 lakh: 20%
- ₹20–24 lakh: 25%
- Above ₹24 lakh: 30%
➤ The government said a ₹12 lakh taxpayer will save about ₹80,000 in tax, while those earning ₹18 lakh and ₹25 lakh could see savings of ₹70,000 and ₹1.1 lakh respectively.
TDS, TCS and compliance made easier
➤ Several changes were announced to reduce compliance burden:
➤ TDS and TCS rules rationalised
➤ TCS on education remittances and education loans (up to ₹10 lakh) removed
Also Read: Budget 2026 Live Streaming: When & where to watch FM Nirmala Sitharaman’s Budget speech online free
➤ TCS threshold raised from ₹7 lakh to ₹10 lakh
➤ Annual TDS limit on rent increased to ₹6 lakh
➤ Time limit to file updated income tax returns extended to four years
➤ Higher TDS to apply only in non-PAN cases
➤ Tax benefits allowed for two self-occupied houses
➤ For senior citizens, the tax deduction limit was doubled to ₹1 lakh.
➤ Customs duty cuts and manufacturing push
➤ 36 life-saving drugs made duty-free
➤ Customs duty cut on lithium batteries and cobalt powder
➤ Reduced basic customs duty on several EV, electronics and telecom components
➤ Open-cell manufacturing for TVs exempted from customs duty
➤ Additional capital goods exempted for EV and mobile battery manufacturing
➤ The government also committed to removing multiple cesses and surcharges, allowing not more than one levy per item.
➤ FY25 fiscal deficit pegged at 4.8%, with a target of 4.4% in FY26
➤ FY26 expenditure estimated at ₹50.65 lakh crore
➤ Net market borrowing set at ₹11.54 lakh crore
➤ Asset monetisation plan to raise ₹10 lakh crore
➤ National Manufacturing Mission announced: Focus areas include
- Footwear and leather manufacturing
- Toys manufacturing
- Solar PV cells ecosystem
➤ A dedicated focus product scheme for footwear and leather aims to create 22 lakh jobs and boost exports.
➤ MSMEs, startups and gig workers get support
➤ MSME classification limits enhanced
➤ Credit guarantee cover doubled to ₹10 crore
➤ New ₹10,000 crore fund-of-funds for startups
➤ Customised credit cards for micro enterprises
➤ Term loans up to ₹2 crore for first-time women, SC and ST entrepreneurs
➤ Gig workers will get social security cover, ID cards, and access to government services.
➤ ₹1.5 lakh crore in 50-year interest-free loans to states
➤ A ₹1 lakh crore Urban Challenge Fund for next-generation cities
➤ A Maritime Development Fund of ₹25,000 crore
➤ 50,000 new Atal Tinkering Labs in schools
➤ 10,000 tech fellowships at IITs and IISc
➤ Centre of Excellence in AI for education
➤ 10,000 new medical seats in FY26
➤ Day-care cancer centres in district hospitals
➤ Expanded Kisan Credit Scheme loan limits
➤ New missions for pulses, fisheries, fruits and vegetables
➤ A Makhana Board will be set up in Bihar, alongside investments in irrigation and crop diversification.
➤ New greenfield airports and Patna airport expansion
➤ Western Koshi Canal project support
➤ New food technology institute
➤ Expansion of IIT Patna infrastructure
