Finance Minister Nirmala Sitharaman, in her eighth consecutive Budget speech on Saturday, offered tax relief to the middle class by exempting direct tax on income up to ₹12 lakh. The announcement is expected to spur consumption, which has of late softened, especially in urban areas.

After the Narendra Modi government came to power in 2014, the 'nil tax' slab was raised to ₹2.5 lakh, which was further raised to ₹5 lakh in 2019 and to ₹7 lakh in 2023, says Sitharaman. "This is reflective of our government’s trust on the middle-class taxpayers."

The new structure is expected to substantially reduce the taxes of the middle class, leaving more money in their hands, boosting household consumption, savings and investment.

4:50 pm: Finance Minister Nirmala Sitharaman says the old tax regime will not be phased out.

4:49 pm: The government says 75% of individual taxpayers have moved to the new tax regime. It now expects almost everyone to shift to the new tax regime.

4:45 pm: Sonal Varma, chief economist of Nomura, says the budget has tried to balance the twin objectives of fiscal discipline and supporting growth. "At the margin, there is a tilt towards supporting consumption through tax cuts for middle class households, relative to the public capex push seen over the last four years. This shift takes into account the difficulty in executing public capex projects due to budget and institutional capacity constraints, and the need to support private consumption this year, given weakness in urban consumption...The growth impulse from the budget should be marginally positive for FY26, in our view. Fiscal prudence will keep India’s fiscal risk premia low and provide greater leeway to the RBI to begin lowering its policy rate at the February MPC," says Varma.

4:40 pm: Finance Minister Nirmala Sitharaman says the government has responded to the people's voice and cut income tax rates in the new tax regime.

4:18 pm: "When we brought the new tax regime, we didn't want the old tax regime to be copied," says Finance Minister Nirmala Sitharaman.

4:12 pm: With the new tax regime, the government has put substantial amount of money in the hands of people who deserve it, says Finance Minister Nirmala Sitharaman.

4:10 pm: No reduction in capital expenditure in Budget 2025, says Finance Minister Nirmala Sitharaman.

4:07 pm: Income tax simplification is already completed. "We shall bring the bill in the next week," says Finance Minister Nirmala Sitharaman.

4:00 pm: Finance Minister's press conference begins.

3:50 pm: Welcoming the Budget announcements, Shailesh Chandra, president of SIAM, says, the specific focus on rural prosperity and agriculture, coupled with reforms in the personal income tax, is likely to have a positive effect on the auto industry, and will help in creating demand.

3:35 pm: Srikumar Krishnamurthy, senior vice president and co-group head, ICRA, says the Budget proposals are expected to have a constructive impact on the auto sector. "Expected rise in consumer disposable income amidst higher tax exemptions, government’s continued thrust on agri cash flows through rural infrastructure development and enhanced cum easier credit access supporting rural demand shall support overall automotive demand," Krishnamurthy says.

3:07 pm: Commenting on Union Budget 2025-26, Christian de Guzman, senior vice president, Moody's Ratings, says the announced tax relief measures have constrained the growth of revenue receipts, which will rise at its slowest pace since 2022-23; as such, falling expenditure as a share of GDP has borne the brunt of the projected narrowing of the fiscal deficit even as the emphasis on capital expenditure has been sustained. "Although the Union government remains on track to meet its near-term policy goals, we do not expect a sufficient improvement in the debt burden, or the proportion of the budget earmarked for debt servicing to change our broader assessment that India’s fiscal strength will remain weaker than most of its investment-grade peers," says Moody's.

3:01 pm: Anish Shah, Group CEO & MD, Mahindra Group, says the theme of 'Make in India for the world' remains a key focus in this budget, with efforts to reduce India's manufacturing costs poised to significantly enhance the country's global competitiveness. The new tax structure will encourage private sector capex to move in a positive direction, says Shah.

2:00 pm: Girish Wagh, executive director of Tata Motors, says the continued allocation of over ₹11 lakh crore in capital expenditure, alongside targeted initiatives to boost consumption, support ‘Make in India’, and promote agricultural growth, is set to create a more dynamic economic environment. "The removal of basic customs duties on key materials for battery manufacturing is a strategic move to boost domestic EV production, foster a sustainable ecosystem, and drive India's transition to a greener economy," says Wagh.

1:42 pm: Reacting to the Union Budget 2025-26, Krishnamurthy V Subramanian, executive director of the International Monetary Fund, estimates consumption in FY26 to go up by over 10% and GDP to rise by over 8%.

1:30 pm: "This budget achieves the delicate balance between responsible spending and establishing growth catalysts across sectors, industries, MSMEs and the salaried class with a special focus on women," says Gayathri Parthasarathy, partner and leader – Financial Services, PwC India.

1:13 pm: Commenting on the Budget, Promod Batra, partner, Deloitte India, says the announcements are expected to bring money in the hands of farmers and the middles class. "We will see a demand push as a result. This is a demand-driven budget, Batra says.

1:00 pm: "The Budget 2025's increase in FDI to 100% from the current 74% will aid foreign insurers' interest in investing in the growing Indian insurance market, where we expect strong premium growth to boost profitability," says Mohammed Ali Londe, vice president, senior analyst, Moody's Ratings.

12:43 pm: InfoEdge founder Sanjeev Bikhchandani says the additional allocation of ₹10,000 crore to the 'Fund of Funds' for startups is a great move. "The first fund done a few years ago gave a huge fillip to the Indian Venture Capital industry. Dozens of Indian VC funds got set up providing risk capital to hundreds of startups. India needs domestic venture capital," says Bikhchandani.

12:30 pm: Commenting on the Union Budget 2025-26, Abhinav Akhilesh, partner, Grant Thornton Bharat, says "What stood out was the focus on increasing rural consumption and that too addressing very specific themes including enhanced credit access and the announcement on gig workers. There has been a focus on creating a social security net. These are long-term measures that will be very helpful." "It was overall a growth oriented budget. There may have been a shift from infrastructure to consumption but it would interesting to see how these measures are executed," says Akhilesh.

12:15 pm: A tax payer in the new regime with an income of ₹12 lakh will get a benefit of ₹80,000 in tax (which is 100% of tax payable as per existing rates). A person having income of ₹18 lakh will get a benefit of ₹70,000 in tax (30% of tax payable as per existing rates). A person with an income of ₹25 lakh gets a benefit of ₹1.10 lakh (25% of his tax payable as per existing rates). As a result of these proposals, revenue of about ₹ 1 lakh crore in direct taxes and ₹2,600 crore in indirect taxes will be forgone, says Finance Minister Nirmala Sitharaman.

12:14 pm: "To taxpayers up to ₹12 lakh of normal income (other than special rate income such as capital gains), tax rebate is being provided in addition to the benefit due to slab rate reduction in such a manner that there is no tax payable by them," says Finance Minister Nirmala Sitharaman.

12:12 pm: The middle class provides strength for India's growth. "We have periodically reduced their tax burden. "I am now happy to announce that there will be no income tax payable up to income of ₹12 lakh," says Nirmala Sitharaman. This limit will be ₹12.75 lakh for salaried tax payers, due to standard deduction of ₹75,000.

12:06 pm: Time limit to file revised IT returns extended from two years to four years, says the finance minister.

12:05 pm: Personal income tax reform focuses on the middle class, says Finance Minister Nirmala Sitharaman.

12:04 pm: The finance minister proposes to reduce the number of rates above which TDS (tax deduction at source) is deducted.

12:02 pm: New Income Tax Bill will be simple for taxpayers, leading to reduced litigation, says the finance minister.

12:00 pm: FM Sitharaman announces direct tax proposals.

11:53 am: Revised estimate for FY25 capex stands at ₹10.18 lakh crore.

11:52 am: 36 life-saving drugs for cancer and rare diseases to be added to the fully exempted list of customs duty, says the finance minister.

11:50: FY26 fiscal deficit expected at 4.4% of GDP, says Finance Minister Nirmala Sitharaman.

11:49: Jan Vishwas Bill 2.0 will decriminalise more than 100 provisions from previous laws, says Nirmala Sitharaman.

11:45 am: Foreign Direct Investment (FDI) limit for insurance will be raised from 74% to 100% for those companies that invest their entire premium in India, says the finance minister.

11:44 am: A new Income Tax Bill will be introduced next week, says Finance Minister Nirmala Sitharaman.

11:42 am: On exports, FM Nirmala Sitharaman says Bharat Trade Net will be set up for trade documents and financing solutions.

11:40 am: PM Research Fellowship scheme to provide 10,000 fellowships.

11:38 am: Medical tourism will be promoted with easier visa norms, says the finance minister.

11:35 am: Finance Minister Nirmala Sitharaman announces new greenfield airports for Bihar.

11:34 am: The government will launch a modified UDAN scheme to enhance regional connectivity to 120 more destinations and adding 4 crore passengers.

11:30 am: Development of 100 gigawatt (GW) of nuclear energy capacity by 2047 is essential for Viksit Bharat, says Nirmala Sitharaman. A nuclear energy mission for R&D on small modular reactors will be set up, says Sitharaman. "5,000 small modular reactors will be operationalised by 2033."

11:28 am: FM announces ₹1.58 lakh crore capex for states and incentives for reforms.

11:27 am: Gig workers will be provided healthcare under Jan Aarogya Yojana, says the finance minister. An estimated 1 crore gig workers are likely to benefit.

11:26 am: The government will establish day care cancer centres in all district hospitals, says Nirmala Sitharaman.

11:22 am: Expansion of capacity in IITs and medical colleges: Additional infrastructure will be created in IITs and medical colleges to accommodate more students, says Sitharaman.

11:19 am: "We will introduce a scheme to make India a global hub of toys," says FM Sitharaman. "Our govt will set up a manufacturing mission covering medium, small and large industries."

11:17 am: For startups, Finance Minister Nirmala Sitharaman says a fund of funds with expanded scope and a fresh contribution of ₹10,000 crore will be set up.

11:16 am: "We will introduce customised credit cards for micro enterprises. In the first year, 10 lakh such cards will be issued," says Sitharaman. A new scheme for SC/ST women will provide term loans for up to ₹2 crore, the finance minister says.

11:15 am: Credit guarantee cover will be enhanced for micro enterprises, startups, and well-run exporter MSMEs, says FM Sitharaman. "Credit guarantee cover for MSMEs will be enhanced from ₹5 crore to ₹10 crore."

11:14 am: Investment and turnover limit of all MSMEs will be enhanced, says the finance minister.

11:12 am: Makhana Board to be set up for processing, marketing Makhana in Bihar.

11:08 am: Government will launch a 6-year mission for Atma Nirbharta on pulses, says Nirmala Sitharaman.

11:05 am: This Budget aims to initiate transformative reforms, says the finance minister.

11:03 am: Aspiration of Viksit Bharat inspires us, says the finance minister. "We see the next five years as a unique opportunity."

11:02 am Finance Minister Nirmala Sitharaman begins budget speech. "We embark on a journey to unlock our nation's tremendous potential," she says.

10:38 am: Cabinet approves the Union Budget 2025-26.

10:35 am: Union Cabinet meeting begins in Parliament, ahead of the presentation of Budget 2025-26.

10:30 am: Ahead of the finance minister's Budget speech, Indian equity benchmarks, the BSE Sensex and the NSE Nifty, were trading higher by 1.2% each.

10:05 am: Union Finance Minister arrives at Parliament ahead of the Union Budget presentation.

9:50 am: Finance Minister Nirmala Sitharaman leaves from Rashtrapati Bhavan after meeting President Droupadi Murmu.

9:40 am: President Droupadi Murmu offered 'dahi-cheeni' (curd-sugar), considered auspicious, to Finance Minister Nirmala Sitharaman ahead of her Budget speech.

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