Budget 2025 highlights:
With focus on enhancing consumption, generation of employment and reducing fiscal deficit, various policy and tax amendments are proposed, summary of which is as under:
A. Policy measurements:
- Current year fiscal deficit to be at 4.8% of GDP and budgeted to be 4.4% for next fiscal;
- Budget theme emphasise on People, Economy, and Innovation;
- Proposed introduction of new income tax rules;
- Empowering Key Sectors: Focus on agriculture, MSMEs, women entrepreneurs, and overall economic upliftment;
- Substantial investments allocation on high growth trajectory sectors such as Infrastructure, Entrepreneurship, Technology and Healthcare;
- Announcement of high level committee for review of regulatory reforms for non-financial sectors;
- Increase in FDI limit in Insurance sector from 74% to 100%;
- Proposal for simplification and fast track mergers;
- National framework for GCC introduced;
- Outlays for various socio-economic development enhanced;
- Set up of Bharat Trade Net for international Trade;
- Decriminalization of 100 provisions under various laws;
B. Taxation related:
Personal Taxation:
- No income-tax up to INR 12 lakh;
- Highest rate of 30% applicable on income above INR 24 lakh;
- Allowance for claim of Nil annual value up to two self occupied properties without any conditions;
Corporate Taxation:
- Removal of benefit of fresh 8 years of carry forward of accumulated losses on mergers for industrial undertaking;
- Extension of tonnage scheme for inland vessels;
- Extension of presumptive taxation regime to non-residents providing services for electronics manufacturing schemes;
- Introduction of a scheme for determining arm’s length price of international transaction for a block of three years;
- Scope of Safe Harbour Rules to be expanded;
Other Taxation updates:
- Rationalisation in TDS and TCS provisions in relation to rates and threshold limits;
- No TCS on sale of goods;
- TCS threshold increase on LRS remittances of NR 10 lakh and above;
- Extension of 5 years to Start-Ups and units in GIFT-IFSC for incorporation/commencement of operations to seek tax incentives;
- GIFT IFSC boost – Specific benefits to ship-leasing units, insurance offices and treasury centres of global companies;
- Certainty of taxation for Category I and Category II AIFs for gains on securities;
- Extension of time-limit to file updated returns from the current limit of 2 years to 4 years;
- Increase in period of validity of registration of smaller charitable trusts from 5 to 10 years;
- Extension in sunset clause for startup incentive for tax benefits extended to 2030;
The proposed budget amendments are well equipped to provide much awaited relief to ‘aam aadmi’ of India. Additionally, various measurements have been proposed for ease of doing business.