Union Budget 2025-26

 Hon’ble FM Ms. Nirmala Sitharaman presented Central Budget for FY 2025-26 Today.

The theme of this budget was GYAN.

Garib (Poor), Youth (Young), Annadata (Farmer) and Nari (Women).

Some Important Key Features of Budget:

1. Revision in classification criteria for MSMEs : 100% increase in Turnover limit and 250% in Investment Limit.

Customized Credit Cards with 5 lakh limit for micro enterprises registered on Udyam portal will be issued. In the first year, 10 lakh such cards will be issued.

2. Income Tax Slabs revised for New Tax Regime. There will be no income tax payable up to Rs 12 lakh. (up to Rs 12.75 lakh including standard deductions) *

*Even there is no change in Old Tax Regime, Still Salaried Class Taxpayers in High Tax Brackets (Rs. 36 Lakhs and above) claiming HRA Exemption, 80C, 80D with Housing Loan will find old tax regime more beneficial. Also, in my opinion it is not a good decision to exclude 80C benefits from New Tax Regime as just to avail 80C and other such benefits Tax Payers were forced to invest in LIC and Post-Office Schemes, it used to help in their bad times, as it is easy to get loan against LIC Polices or using post office savings comparing to other loan options. But now as saving habits will be broken, People will depend on high interest loans and credit cards, whenever face any financial crises.

However good for young people starting their career with good pay scale, if they learn to manage their finances.

3. TDS/TCS rationalization: To rationalize TDS/TCS, Budget doubles limit for tax deduction on interest earned by senior citizens from the present Rs. 50,000 to Rs. 1 Lakh. Further, TDS threshold on rent has been increased to Rs. 6 Lakh from Rs. 2.4 Lakh per annum. TCS won’t be applicable on transactions relating to sale of goods, the higher TDS deduction will now apply only in non-PAN cases.

4. The way other countries and proceeding in Technology Area and how China Surprised the World recently by their Innovations in AI lead by their very talented young professional team, to compete it is must for India to invest in Education and Skill Development of Talented Youth of India. Budget 2025 proposes Fifty thousand Atal Tinkering Labs to be set up in Government schools in next 5 years to cultivate the spirit of curiosity and innovation, and foster a scientific temper among young minds. Also, Broadband connectivity will be provided to all Government secondary schools and primary health centres in rural areas under the Bharatnet project. Further propose to implement a Bharatiya Bhasha Pustak Scheme to provide digital-form Indian language books for school and higher education, five National Centres of Excellence for skilling will be set up with global expertise, to facilitate education for 6,500 more students, a Centre of Excellence in Artificial Intelligence for education will be set up with a total outlay of  500 crore, In the next year, 10,000 additional seats will be added in medical colleges and hospitals, towards the goal of adding 75,000 seats in the next 5 years.

(Unfortunately, due to political reasons many important seats of prestigious institutes like IIT occupied by some student under reservation system even getting low grades get wasted, as they could not handle pressure and leave without completing their courses, in past 5 years approx. 13600 students have dropped out of IIT. Further as talented professionals do not get opportunities to match the level of their skills and knowledge, they leave with no other option than moving to other countries and there they play very important roles in technology advancement of their countries. Govt must do something to free education sector from all such political schemes and help them in other areas where they could succeed, if we truly want Brilliant Indian Minds to Contribute in Growth of India.)

5. A digital public infrastructure, ‘BharatTradeNet’ (BTN) for international trade will be set-up as a unified platform for trade documentation and financing solutions.

6. Requirements and procedures for speedy approval of company mergers will be rationalized. The scope for fast-track mergers will also be widened and the process made simpler. (Good Step, as This is the area where responsibility and accountability of related regulatory officers is required, it take years for small and medium size companies to get approval, on the other hand for big companies it is matter of few months.)

7. To streamline the process of transfer pricing and to provide an alternative to yearly examination, propose to introduce a scheme for determining arm's length price of international transaction for a block period of three years. This will be in line with global best practices.

8. Propose to extend the period of incorporation by 5 years to allow the benefit available to start-ups which are incorporated before 1.4.2030.

Hon’ble FM also proposed to introduce the new income-tax bill next week. that will carry forward the spirit of “Nyaya”. The new bill will be clear and direct in text with close to half of the present law, in terms of both chapters and words. It will be simple to understand for taxpayers and tax administration, leading to tax certainty and reduced litigation.

(This sounds terrible as We have already seen, whenever Govt talks about simplicity, things get more complex and complicated as in the case of GST, Hope Govt won’t repeat the same mistake as in implementation of GST).

Just reading highlights of Budget or some fancy headlines about Budget won’t give complete knowledge of Budget Proposals.

To understand provisions of Budget 2025-26 in Detail Please Refer Finance Bill. Link of the same is as here under:

https://www.indiabudget.gov.in/doc/Finance_Bill.pdf

Thanks.