Budget 2025-26: Reforms as the Fuel of Growth
✅ Key Taxpayer-Friendly Reforms:
- Faceless assessment, Taxpayer’s charter, Faster refunds.
- 99% returns on self-assessment.
- Vivad se Vishwas scheme for dispute resolution.
- Continued commitment to “Trust First, Scrutinize Later” tax policies.
Financial Sector Reforms & Investment Growth
✅ FDI in Insurance Raised: From 74% to 100% (if the entire premium is
invested in India).
✅ Light-Touch Regulatory Framework:
- High-Level Committee for reducing regulatory burdens.
- Investment Friendliness Index of States introduced to promote competition.
- Financial Stability and Development Council (FSDC) to review regulations.
- Jan Vishwas Bill 2.0: Decriminalizes 100+ legal provisions for ease of doing business.
🔹 Fiscal Consolidation & Budget Estimates
✅ Fiscal Deficit Targets:
- 2024-25 (RE): 4.8% of GDP
- 2025-26 (BE): 4.4% of GDP
✅ Budget Estimates 2025-26:
- Total Receipts (excl. borrowings): ₹34.96 lakh crore
- Net Tax Receipts: ₹28.37 lakh crore
- Total Expenditure: ₹50.65 lakh crore
- Capital Expenditure: ₹10.18 lakh crore
Middle-Class Tax Relief & Personal Income Tax Reforms
✅ New Tax Regime:
- No Income Tax for income up to ₹12 lakh per annum.
- Salaried individuals up to ₹12.75 lakh pay NIL tax (with ₹75,000 standard deduction).
- Estimated revenue loss: ₹1 lakh crore due to tax cuts.
✅ TDS/TCS Rationalization:
- Senior citizens’ tax deduction limit on interest doubled to ₹1 lakh.
- TDS threshold on rent increased from ₹2.4 lakh to ₹6 lakh.
- TCS collection threshold increased to ₹10 lakh.
- Delay in TCS payments decriminalized.
✅ Compliance Ease & Incentives:
- Updated return filing extended from 2 years to 4 years.
- Small charitable trusts registration extended from 5 to 10 years.
- Two self-occupied properties can be claimed as NIL without conditions.
- National Savings Scheme withdrawals & NPS Vatsalya accounts exempted from tax.
Ease of Doing Business & Investment Promotion
✅ New Scheme for International Transactions: Arm’s length pricing for 3 years to ensure tax certainty.
✅ Presumptive Taxation for Non-Residents: Covers services to electronics manufacturing companies.
✅ Tonnage Tax Benefits: Extended to inland vessels.
✅ Startup Incentives: Incorporation period extended by 5 years.
✅ Infrastructure Investment Boost: Sovereign Wealth & Pension Fund investment deadline extended to 2030.
🔹 Customs Reforms & Trade Promotion
✅ Industrial Tariff Rationalization:
- 7 tariffs removed, introducing a single cess/surcharge per category.
✅ Healthcare & Essential Medicines:
- 36 life-saving drugs (cancer, rare diseases) fully exempted from Basic Customs Duty (BCD).
- 37 more medicines & 13 Patient Assistance Program drugs also exempted.
✅ Boost for Domestic Manufacturing:
- 25 critical minerals (Cobalt, Lithium-ion battery waste, Zinc, etc.) fully exempted from BCD.
- Shuttle-less looms for textiles fully exempted.
- BCD on knitted fabrics increased to 20% or ₹115/kg (whichever is higher).
✅ Electronics & Make in India:
- BCD on Interactive Flat Panel Displays (IFPDs) raised to 20%.
- BCD on Open Cells reduced to 5%, parts fully exempted.
- Lithium-ion battery manufacturing: 35 capital goods for EVs & 28 for mobile batteries added to exemption list.
✅ Shipbuilding Industry:
- BCD exemption extended for 10 years on raw materials.
✅ Export Promotion Measures:
- Handicrafts exports facilitated with BCD exemptions.
- Leather Industry: BCD fully exempted on Wet Blue leather to boost employment.
✅ Fisheries Export Support:
- BCD on Frozen Fish Paste reduced from 30% to 5%.
- BCD on Fish Hydrolysate for shrimp/fish feeds reduced from 15% to 5%.
🔹 Vision for Viksit Bharat
✅ Three Pillars of Growth: Democracy, Demography, Demand.
✅ Boosting Consumption, Savings, and Investment by putting more money in the hands of the middle class.
🔹 Conclusion
The Union Budget 2025-26 balances tax relief, regulatory ease, and investment growth while maintaining fiscal discipline. It aims to empower the middle class, attract global investments, and strengthen India’s economic resilience. 🚀