Union Budget 2025, scheduled to be presented by Finance Minister Nirmala Sitharaman on February 1, 2025, will likely introduce radical reforms into the tax structure, in order to make it simple, boost economic growth and enhance social welfare. This budget should focus on critical areas that include middle-class income tax relief, restructuring capital gains tax and increasing focus on infrastructure development, which are likely to continue strengthening the recovery and growth path in India. Industry leaders will look for a review of STT and other fiscal policies that may affect investments and market dynamics.
What is a Budget?
The Union Budget of India, also referred to as the Annual Financial Statement in Article 112 of the Constitution of India and is classified into Revenue Budget and Capital Budget. Revenue budget includes the government’s revenue receipts and expenditure. There are two kinds of revenue receipts – tax and non-tax revenue.
In terms of governing, a government budget explains how the money will be divided among sectors for it to show what the government considers to be its economic priorities and directions in policy.
It includes details about:
- Revenue: Sources like taxes, dividends and fees.
- Expenditure: Allocations for sectors like healthcare, education, railway, infrastructure, defense, etc.
- Deficit or Surplus: The difference between revenue and expenditure.
BUDGET 2025 Date
The Union Budget 2025-26 will be submitted by the finance minister, Nirmala Sitharaman, on February 1, 2025. This will be her eighth successive budget presentation, living up to the government’s guidelines on fiscal policy. The budget is likely to focus on major areas like tax reforms, where the middle class is demanding relief and capital expenditure, mainly on infrastructure development to promote economic growth.
Budget 2025 Expectations
Finance Minister Nirmala Sitharaman is expected to prioritize:
- Tax Reforms: CII, FICCI, PHDCCI and Assocham have been urging tax reductions on personal income as the best way to add more disposable income to the pockets of the middle class.
- Capital Expenditure: Increased focus on infrastructure investment to improve the economy and jobs.
- Fiscal Consolidation: There will be a balance sought between fiscal prudence and growth objectives, keeping the uncertainty of the world while maintaining its fiscal consolidation trajectory.
- Securities Transaction Tax: STT has been recommended to be abolished to equate tax rates and enhance investment in the securities market.
Union Budget 2024
Union Budget 2024, presented by Finance Minister Nirmala Sitharaman, has introduced changes concerning taxes on many goods and services and also on various types of incomes. Below are some important details about the taxes introduced or revised:
Tax Area | Details |
Income Tax |
|
Corporate Tax | Corporate tax rate is maintained at 25% for companies with turnover up to ₹400 crore. |
Securities Transaction Tax (STT) | No significant changes in STT, but there was talk of reducing it for better market liquidity. |
Customs Duty | Increased customs duty on mobile phone parts and lithium-ion batteries to encourage local manufacturing |
Excise Duty on Tobacco | Excise duty on cigarettes and tobacco products increased. |
Tax on Sugary Drinks | Proposed increase in taxes on sugary drinks to address health concerns like obesity. |
GST Changes | GST rate to be changed for some products (aerated drinks have been taxed at a higher GST rate). |
Luxury Goods | Revised customs duties on luxury goods like high-end automobiles and watches. |
Conclusion
The Finance Minister will present the Union Budget 2025-26 to the nation on February 1, 2025. This would be her eighth consecutive budget and second full budget for the Modi 3.0 government. The budget, therefore, assumes importance because it will set the trend for India’s economic growth for the next fiscal year.
Union Budget 2025 FAQs
Finance Minister Nirmala Sitharaman will present Budget 2025 on February 1, 2025.
The Budget may cut or rebate tax amounts and alter personal and corporate tax rates.
Tax reforms, higher capital expenditure, focus on infrastructure, fiscal consolidation, and Securities Transaction Tax (STT) reduction.
Fiscal consolidation is the process of balancing revenue and expenditure with a reduction in fiscal deficit.
Income tax rebates, corporate tax maintenance, and excise duty on tobacco were intact in Budget 2024.
