Tax Reforms

Personal Income Tax Adjustments: Expected revisions in tax slabs to enhance disposable income. Proposal to raise the exemption limit to ₹10 lakh. Introduction of a 25% tax slab for incomes between ₹15 lakh and ₹20 lakh.

Capital Gains Tax Simplification:

Calls for a streamlined structure with reduced rates and enhanced indexation benefits to encourage long-term investments.

GST Rate Rationalization

Hospitality Sector: Reduction in GST rate from 18% to 12% for hotels with tariffs above ₹7,500 per night.

Food & Beverage Industry: Reinstating Input Tax Credit (ITC) for restaurants and cloud kitchens.

Health Insurance: Proposal to lower GST on health insurance premiums from 18% to 5% or 12%.

Infrastructure and Capital Expenditure Railways:

A projected 15-20% increase in capital allocation for enhanced connectivity.

Roads & Highways: Continued investments in road networks and multi-modal logistics parks.

Green Energy Transition: Enhanced funding for offshore wind farms and green hydrogen initiatives.

Measures to Boost Consumption

Rural and Urban Focus: Job creation initiatives, increased funding for affordable housing (PM Awas Yojana), and MSME support through tax incentives and easier credit access.

While some challenges like inflation and oil price fluctuations may arise, the mutual fund industry is expected to continue its upward trajectory in 2025.

Sectoral Incentives

Manufacturing: Expansion of the Production-Linked Incentive (PLI) scheme to electronics and textiles.

Tourism & Hospitality: Incentives for eco-tourism, development of regional tourism hubs, and simplified GST norms.

Real Estate: Increase in home loan interest deduction limits to stimulate demand.

Addressing Inflation and Employment

Inflation Control: Targeted schemes like Direct Benefit Transfers and structural reforms in agriculture to manage rising prices. Employment Generation: Incentives for MSMEs, upskilling initiatives, and job creation programs.

Foreign Direct Investment (FDI)

Attracting Investments: Policies to increase FDI in technology, manufacturing, and renewable energy sectors through enhanced incentives and tax benefits.

Fiscal Deficit and Expenditure

Fiscal Deficit Reduction: Government aims to reduce the fiscal deficit to 4.5% of GDP by 2025-26.

Expenditure Projections:

Total Expenditure: Estimated at ₹48.21 lakh crore.

Revenue Expenditure: ₹37.09 lakh crore.

Capital Expenditure: ₹11.11 lakh crore.

Subsidies:

Government plans an 8% increase in spending on food and energy subsidies, totaling $47.41 billion.

Revenue Projections:

Gross Tax Revenue: Estimated at ₹38.40 lakh crore (11.8% of GDP).

Non-Debt Receipts: ₹32.07 lakh crore (including net tax revenue, non-tax revenue, and miscellaneous capital receipts).

Privatization and Disinvestment

Policy shift toward revitalizing state-run enterprises rather than pursuing extensive privatization.

This comprehensive budget expectation document highlights key focus areas that balance economic growth with fiscal prudence, ensuring sustainable development and financial stability.