Finance Minister Nirmala Sitharaman recently addressed the Lok Sabha, outlining crucial proposals in the Finance Bill 2025. The speech covered significant tax reforms, customs duty rationalization, investment fund amendments, and new import policies. Here’s a detailed look at the key takeaways.
1. Increased Tax Benefits for Salaried Individuals
Salaried taxpayers will receive a higher tax benefit of ₹12.75 lakh annually, providing much-needed relief and improving disposable income. This move aligns with the government's objective of easing the tax burden on the middle class.
2. Customs Duty Rationalization
The government has proposed multiple customs duty reforms to enhance domestic manufacturing and encourage ease of business. Key changes include:
a)Removal of seven custom tariff rates to simplify the tax structure.
b)Exemption of 35 additional capital goods for EV battery production to boost India’s electric vehicle industry.
c)Exemption of 28 capital goods for mobile manufacturing, supporting the "Make in India" initiative.
3. Amendments to TDS & TCS Thresholds
The Finance Minister announced relaxed thresholds for TDS (Tax Deducted at Source) and TCS (Tax Collected at Source) to improve liquidity and ease compliance for businesses and individuals.
4. New Investment Fund Regulations
To attract global and domestic investments, the government is introducing amendments to the Safe Harbour Regime for investment funds. This will provide greater clarity and ease of operations for investors.
5. Changes in Import Taxation
The Finance Bill 2025 proposes that imports will attract either a cess or a surcharge, but not both. This aims to reduce the overall tax burden on imported goods and streamline the tax system.
6. New Income Tax Bill Discussion in Monsoon Session
The Finance Minister hinted at discussions on a new Income Tax Bill in the upcoming Monsoon Session of Parliament. This could bring major reforms in the Indian taxation system.
The proposed changes in Budget 2025 reflect the government's focus on tax relief, business-friendly policies, and boosting key sectors like EVs and mobile manufacturing. The upcoming Monsoon Session discussions on the new Income Tax Bill could introduce further transformations in the taxation framework.
Disclaimer:
The information provided in this article is for informational purposes only and should not be considered as financial or tax advice. Readers are advised to consult with a tax professional or financial advisor for specific guidance related to their financial situation.