Union Budget 2025: Tax Reliefs to Stimulate Domestic Consumption
- Team Exportduniya
- Apr 28
- 2 min read
The Union Budget 2025, presented by Finance Minister Nirmala Sitharaman, includes significant tax reliefs aimed at boosting domestic consumption and enhancing export competitiveness. These measures are designed to stimulate economic growth by putting more money in the hands of consumers and supporting businesses, particularly Micro, Small, and Medium Enterprises (MSMEs).
Tax Reliefs
Income Tax Exemption: The income tax exemption limit has been increased to ₹12 lakh from ₹7 lakh under the new tax regime. Individuals earning up to ₹12 lakh annually will not pay any income tax, thanks to a rebate that offsets the tax liability.
Standard Deduction: For salaried individuals under the new tax regime, the standard deduction has been raised from ₹50,000 to ₹75,000—resulting in additional tax savings.
Tax Savings: Individuals earning up to ₹12 lakh can now save approximately ₹80,000 annually. This increased disposable income is expected to boost domestic consumption and benefit sectors like retail, housing, and consumer goods.
Boosting Export Competitiveness
The budget also includes several initiatives to enhance export competitiveness, particularly for MSMEs:
MSMEs Scale Up: Expanded credit guarantees and financial support will help MSMEs scale operations and increase exports.
Higher Local Demand: Increased domestic consumption creates a robust local demand, which indirectly supports MSMEs' export capabilities.
Reduce Costs & Improve Export Pricing: Customs duty rationalization and exemptions on raw materials lower production costs, making Indian products more globally competitive.
More Working Capital for Exporters: Financial instruments like the Udyam Credit Card give exporters better access to working capital, enhancing liquidity and operations.
Better Global Market Access: Initiatives like BharatTradeNet and the Export Promotion Mission will improve India’s global trade integration and market access for exporters.
More Savings & Tax Relief: The tax reliefs provided in the budget not only boost domestic consumption but also offer MSMEs and exporters more savings, which can be reinvested in business expansion and export growth.
In Summary
The Union Budget 2025 aims to stimulate domestic consumption through significant tax reliefs while enhancing export competitiveness by supporting MSMEs and improving market access. These measures are crucial for driving economic growth and positioning India as a major player in global trade.
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