As the Union Budget 2025 approaches, businesses such as spirits, tobacco and gambling are anxiously awaiting measures to reduce the constraints of high taxes and complex regulations. These industries, in particular, are searching for reforms to promote corporate development, simplify operations, and support innovation.
With the government wanting to improve economic development and strengthen its worldwide standing, industry participants believe the budget would help them achieve these aims. From tax reform to trade facilitation, the 2019 budget is intended to establish the framework for long-term prosperity, responding to businesses’ changing requirements while addressing socioeconomic goals.
Budget 2025 Expectations
With only one day until the Budget 2025 address, hopes for tax relief have risen. Top income-tax recommendations include considerable adjustments to the new regime’s tax bands, as well as potential relief measures to stimulate consumption and economic development. The emphasis is on fiscal stability, tax reform, and increased investment. To stimulate innovation and growth, the budget aims to increase public expenditure, close the budgetary gap, encourage private investment, and reform taxation.
The Union Budget 2025-26 presents a chance to address outstanding concerns, implement sector-specific incentives, and guarantee the tax structure is in line with the country’s long-term economic goals. In this environment, the indirect tax sector expects rationalization, simplification, and industry-specific changes, all of that might have a considerable influence on both local and global firms.
Key Tax Changes
- The Budget 2025 is expected to include a rearrangement of import tariffs on raw materials, critical inputs, and capital items. This step is most likely intended to encourage local manufacture of completed items and machinery under the Phased manufacture Program (PMP). Customs compliance might potentially be considerably improved through digital transformation projects. This includes using API connectors to speed up data interchange, enhancing data filing accuracy and efficiency, and providing easy access to ICEGATE. There has long been a call for an amnesty plan to resolve historical conflicts under Customs legislation. The government should surely consider ways to remove the backlog of cases and give firms a fresh start.
- According to rumors, the FM may provide assistance to salaried taxpayers in the Rs. 15-20 lakh category by enlarging the 20% tax slab or creating a new 25% tax slab, the budget may increase the basic exemption ceiling to Rs. 5 lakh under the new tax regime.
- While big GST changes are not expected, the business is hopeful that the government would outline a path for simplifying the rate structure, which is growing increasingly difficult year after year. Similarly, E-commerce businesses are seeking for appropriate clarity on removing the TCS requirement on zero-rated supplies. Furthermore, each state’s need for TCS registration may be waived.
- GST rates on critical FMCG goods are expected to be reduced from 18% to 12% in order to promote consumer demand and alleviate financial burdens. The industry seeks specific tax breaks to boost rural distribution networks and stimulate investment in cheap product lines designed for rural customers. To minimize administrative hassles for MSME service providers in fields such as hospitality, tourism, and logistics, single-window compliance and automated Input Credit reconciliation are likely to be implemented.
- Elders are increasingly looking forward to the Union Budget 2025-26, hoping for considerable tax breaks and deductions on FD, savings account, and medical expenses, among other things. The budget will set the course for the next five years and provide a glimpse into the Government’s priority areas for maintaining India’s position as the world’s fastest-growing economy.
Sector Demands and Expectations
Agriculture:
Farmers’ Welfare: Farmers are expected to get sustained support in the form of fertilizer subsidies, improved irrigation schemes, and enhanced access to agricultural loans.
Concentrate on Agri-Tech: Budget 2025 may contain steps to encourage technological adoption in agriculture, such as increased production, sustainability, and value-added goods.
Healthcare:
Enhanced Public Health Funding: Budget allocations to the healthcare sector may be increased, particularly for public health programs, rural infrastructure development, and health insurance coverage expansion.
Pharmaceuticals: Incentives, such as tax credits for innovation, may be available to encourage research and development in the pharmaceutical business.
Infrastructure: Infrastructure Development: Given the government’s emphasis on infrastructure, funding for transportation, urban infrastructure, and renewable energy projects may grow. This might include incentives for renewable energy and smart cities.
Education:
Digitization and Skill Development: Expect to see investments in the education sector’s digitalization, including support for online learning platforms and skill development initiatives, particularly in technology and AI.
Technology and innovation
Incentives for R&D: The government may propose more financing or tax incentives for research and development, with a focus on growing areas such as artificial intelligence, clean energy and biotechnology.
Electric vehicles (EVs)
Tax Cuts and Incentives: As the demand for sustainable transportation grows, more incentives, such as tax breaks for electric cars or the construction of new charging infrastructure, may be implemented to promote this industry.
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Samarth Choudhary is a Chief Editor at keralacobank.com. He has overall editorial experience of 10 years in online media. He has completed his graduation from University of California and masters in Finance from University of Dallas in year 2010. His major interest and expertise is in Finance, Taxes, Government Aid and Schemes. His Major focus is to help users to get relevant information which are published on keralacobank.com in easy and precise form.