Budget 2025
The Union Budget 2025 has brought significant reforms across income tax, GST, customs, and financial regulations. Here’s a breakdown of the key highlights that will impact individuals and businesses alike.
Income Tax Reforms: Relief for the Middle Class!
New Income Tax Bill: A simplified tax regime is set to be introduced.
Revised Tax Slabs: The new regime increases the basic exemption limit to ₹4 lakh from ₹3 lakh.
Higher Rebate: Resident taxpayers earning up to ₹12 lakh (previously ₹7 lakh) will now pay zero tax under the new tax regime.
Capital Gains on ULIPs: Non-exempt ULIPs to be taxed as capital gains.
Updated Return Filing: Time limit extended from 24 months to 48 months.
Start-Up Tax Incentives: The tax benefit period for start-ups extended from April 2025 to April 2030.
💡 More savings, less tax!
TDS/TCS Changes: Higher Thresholds, Fewer Deductions!
TCS on Foreign Remittance: Exemption for education loans up to ₹10 lakh.
TCS on Goods Sales: Completely removed!
Higher TDS Thresholds:
Dividend & Mutual Fund Payouts: ₹10,000 (earlier ₹5,000)
Commission & Insurance Payments: ₹20,000 (earlier ₹15,000)
Professional Fees & Royalties: ₹50,000 (earlier ₹30,000)
Rental Income: ₹50,000/month (earlier ₹2.4 lakh annually)
💡 More take-home income, fewer deductions!
Corporate and Business Taxation: Boosting Growth!
REITs/InVITs Tax Rate: Reduced to 12.5% for long-term equity sales.
Loss Carry Forward: Restricted to 8 years for amalgamating companies.
Safe Harbour in Transfer Pricing: Expanded to simplify compliance.
💡 More incentives, stronger businesses!
GST Updates: Simplification and Clarity!
SEZ & FTWZ Transactions: Defined as neither goods nor services.
Retrospective GST Amendment: “Plant and Machinery” exemption clarified.
Reverse Charge Input Tax Credit: Streamlined from April 1, 2025.
Vouchers: No longer considered taxable goods/services.
Mandatory 10% Penalty Deposit: For GST appeal cases.
💡 Simpler GST rules, easier compliance!
Customs & Import Reforms: Encouraging Domestic Growth!
Import Tariffs Reduced: Number of tariff slabs cut to eight.
Duty-Free Lifesaving Medicines: 36 drugs fully exempt, including for cancer and rare diseases.
Support for EV and Mobile Sectors: BCD exemptions extended for battery manufacturing.
Time Limits for Assessments: Provisional customs assessments to be finalized within two years.
💡 Lower costs, better healthcare, and faster trade processes!
Special Provisions for IFSC: Attracting Global Investments!
Tax-Free Dividends for Ship Leasing: Within IFSC entities.
Capital Gains Exemption: On non-resident transactions involving IFSC entities.
Corporate Treasury Relief: No deemed dividend on loans to parent companies.
💡 India’s financial hub is growing stronger!
Other Key Announcements!
100% FDI in Insurance: Now allowed, provided premiums are invested in India.
Faster Mergers: Simplified fast-track merger processes.
Service Tax Relief: Retrospective exemption for weather-based crop insurance from 2011-2017.
💡 Investor confidence, economic growth, and ease of doing business!
The Finance Bill 2025 is a bold step toward economic growth, tax simplification, and business-friendly policies. It offers significant benefits to individuals and corporations while strengthening India's global competitiveness.