Union Budget India 2025-26: A Game-Changer for Middle Class, MSMEs, and Senior Citizens

The Union Budget 2025-26 has been designed to provide significant relief to taxpayers, boost MSME growth, and support senior citizens. With reforms focused on tax simplification, increased exemptions, and financial inclusion, this budget aims to strengthen India's economic landscape.

1. Personal Income Tax Reforms (New Tax Regime)

One of the biggest takeaways from this budget is the enhanced tax benefits under the new regime.

• Zero Income Tax for individuals earning up to ?12 lakh (?12.75 lakh for salaried taxpayers with a standard deduction of ?75,000).
• Revised Tax Slabs:

This move aims to boost household savings, increase disposable income, and drive investments.

2. MSME Classification Reforms

The government has revised the MSME classification, making it easier for small and medium enterprises to scale up.

• Micro Enterprises: Investment limit raised to ?2.5 Cr, Turnover limit to ?10 Cr.
• Small Enterprises: Investment limit raised to ?25 Cr, Turnover limit to ?100 Cr.
• Medium Enterprises: Investment limit raised to ?125 Cr, Turnover limit to ?500 Cr.

Over 1 crore registered MSMEs employing 7.8 crore people will benefit from increased funding opportunities, incentives, and relaxed compliance.

3. Tax Deduction at Source (TDS) Reforms

• TDS threshold for rent: Increased from ?2.4 lakh → ?6 lakh.
• Liberalized Remittance Scheme (LRS): ?7 lakh → ?10 lakh.
• Only TDS (not TCS) will be levied on goods, simplifying compliance for businesses.
• TDS/TCS Threshold Changes:

4. Senior Citizen Benefits

• Interest Deduction Limit Doubled: ?50,000 → ?1 lakh.
• Tax Rebate under Section 87A:
• No Advance Tax for senior citizens without business income.
• No ITR Filing for seniors aged 75+ with only pension and interest income (if conditions met).

5. Updated Return Filing

• Time limit extended from 24 months → 48 months.
• Additional tax rates for updated returns:

6. Other Key Announcements

• Standard Deduction Increased: ?50,000 → ?75,000.
• Family Pension Exemption: ?15,000 → ?25,000.
• Long-Term Capital Gains (LTCG) Exemption: ?1 lakh → ?1.25 lakh.
• Medical Deductions:

Conclusion

The Union Budget 2025-26 is a well-balanced budget aimed at taxpayer relief, MSME expansion, and senior citizen welfare. With a focus on simplifying taxation and boosting disposable income, the reforms are expected to increase consumption, enhance savings, and strengthen economic growth.

#UnionBudget #IndiaBudget2025 #TaxReforms #MSME #EconomicGrowth