CA and financial educator Sakchi Jain helps simplify the Union Budget 2025

From reforms that will help empower women to the ones that reduce the financial burden for middle-class families, CA and financial educator Sakchi Jain share the highlights of Union Budget 2025.

Finance Minister Nirmala Sitaraman recently announced the Union Budget 2025, introducing various schemes and policies that cover various sectors. The budget talked about new reforms that will help ease the financial burden and aid various sections of society. But it's also understandable to be confused about what was shared during the budget. To help us understand what these policies mean, CA and financial educator Sakchi Jain jots down the highlights.

Living in a world where financial literacy and independence are something that everyone wants, Sakchi is deeply committed to giving back to the community and nurturing the next generation of finance professionals. Understanding how the budget can be confusing for a few, she shares highlights on how this budget impacts senior citizens, women, the middle class, and more.

Also Read: 8 finance creators share Union Budget 2025 highlights you shouldn't miss out on!

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Here's every highlight from the Union Budget 2025 according to Sakchi!

Measures introduced to benefit senior citizens:

The Union Budget 2025 has introduced several key financial relaxations for senior citizens, ensuring higher savings, reduced tax burdens, and improved financial security. One of the most significant changes is the increase in the TDS exemption limit on interest income.

Earlier, if a senior citizen earned more than ₹50,000 per year in interest, they had to pay TDS at a 10% rate. Now, the exemption limit has been raised to ₹1,00,000 per year, meaning senior citizens will be able to retain a larger portion of their interest earnings. This move provides much-needed relief, as many retirees depend on interest income for their daily expenses, and this exemption ensures higher post-tax returns on savings.

Secondly, the government has provided tax relief for individuals, particularly senior citizens, holding long-standing National Savings Scheme (NSS) accounts. The budget proposes that any withdrawals made from NSS accounts on or after August 29, 2024, will be tax-free. This ensures that senior citizens don’t face unnecessary tax burdens on their accumulated savings, making it easier for them to access their funds without deductions.

Previously, if a person earned rental income exceeding ₹2,40,000 annually, they had to pay TDS. The budget has now raised this limit to ₹6,00,000,This increases cash flow for retirees who depend on rental income for financial stability.

Overall, these changes ensure that senior citizens have greater control over their finances, face fewer tax deductions, and can access their retirement savings with ease. Budget 2025 provides much-needed relief, making retirement planning more secure and stress-free for the elderly.

Initiatives that will empower women economically!

In my opinion, Budget 2025 has taken some strong steps to support women economically, though there is still room for more targeted tax benefits. One of the biggest moves is the financial assistance scheme, which will provide loans of up to ₹2 crore to five lakh first-time women, SC, and ST entrepreneurs over the next five years. This is a significant step because access to funding has always been a major challenge for women entrepreneurs. By reducing dependency on traditional lending sources, this scheme could help more women turn their business ideas into reality.

I also feel that enhancing credit access for women-led businesses, especially in the MSME sector, is a much-needed push. Many women hesitate to start businesses due to financial constraints, and better credit availability can change that.

Overall, I think Budget 2025 does create new opportunities for women, especially in entrepreneurship, but there’s still scope for more direct financial incentives to strengthen their economic participation even further.

Government allocated funds for women-centric schemes

One of the key initiatives in Budget 2025 is the expansion of Saksham Anganwadi and Poshan 2.0, which aims to benefit 8 crore children, 1 crore pregnant women, and 20 lakh adolescent girls. This initiative focuses on improving nutrition and healthcare support for mothers and children, ensuring that women receive better maternal care during pregnancy and after childbirth.

While this is not a direct maternity benefit, it strengthens the overall support system for women, especially in rural and underprivileged areas. Access to better nutrition and healthcare services plays a crucial role in reducing maternal and infant mortality rates and improving overall well-being. I believe that such initiatives are a step in the right direction, but additional direct financial and workplace support for working mothers could further strengthen women’s participation in the workforce.

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Policies that will reduce the financial burden on the middle class!

The Union Budget 2025 introduces several measures that provide direct relief to the middle class by reducing their tax burden and increasing disposable income.

One of the most significant changes is the new tax regime, where income up to ₹12 lakh is effectively tax-free due to the enhanced Section 87A rebate. This is a game-changer for salaried professionals and small business owners, as it allows them to save more and invest in their future without worrying about high tax deductions.

For homebuyers, the budget eliminates the notional rental income tax on the second self-occupied property. Previously, if someone owned two houses, the second house was taxed even if it wasn’t rented out. Now, middle-class families can invest in a second home without facing an extra tax burden, making homeownership more affordable. Additionally, the increase in the TDS exemption limit on rental income from ₹2.4 lakh to ₹6 lakh per year benefits individuals who earn rental income, allowing them to keep more of their earnings without immediate tax deductions.

The government has also made indirect savings easier for families by reducing TCS on foreign remittances, which helps those funding overseas education or travel. Overall, this budget prioritizes tax relief, homeownership, and financial ease—all of which are crucial for middle-class families trying to balance their expenses, savings, and investments.

Changes in the income tax slabs

The Union Budget 2025 has introduced a revised tax structure under the new tax regime, aiming to reduce the tax burden on individuals and increase disposable income. Here’s how the new slabs look:

The biggest highlight is that income up to ₹12 lakh is effectively tax-free due to an enhanced Section 87A rebate. This means that if your taxable income is ₹12 lakh or below, your total tax liability will be nullified.

For middle-income earners, this change provides substantial savings. For instance, someone earning ₹12 lakh will save around ₹80,000, while an individual earning ₹25 lakh will save ₹1.1 lakh compared to the previous tax structure.

The introduction of marginal tax relief also prevents individuals from facing a steep tax jump when their income slightly exceeds ₹12 lakh. This ensures that small income increases don’t lead to disproportionate tax liabilities.

It makes the new tax regime more attractive, reducing the appeal of the old regime, which relied on multiple exemptions and deductions.

New income tax slabs and how they will benefit

The Union Budget 2025 takes a strategic approach by increasing disposable income, particularly for the middle class, through revised tax slabs and a higher rebate under Section 87A. The most impactful change is that income up to ₹12 lakh is now effectively tax-free under the new tax regime. This means individuals in this bracket will have more money in hand, which can be used for savings, investments, or consumption, directly benefiting the economy.

By reducing the tax burden, the government aims to encourage higher spending, especially in sectors like housing, retail, and financial markets. When people have more disposable income, they tend to invest in property, spend on goods and services, and boost small businesses, leading to increased demand and economic growth.

This budget signals a shift toward simplified taxation and financial empowerment, encouraging individuals to make long-term financial decisions without worrying about high tax deductions. Ultimately, it supports the broader goal of economic expansion by ensuring that taxpayers have the flexibility to save, invest, or spend as per their financial goals.

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Did you find these highlights helpful? Let us know in the comments below.