For forming government, a party needs to secure more than half of the total seats. So if total number of seats are 250, then a party needs to secure 126 seats to form a governemnt. However, in a scenario given by you, if both the parties secure 125 seats each, then there will be a deadlock and fresh elections could be announced again.
However, please note that such situation usually does not arise in a country like India which is has a multiparty system where many parties contest elections and win seats. (Though there have been many instances of a single party sweeping the elections).