Explore the major tax reforms and financial measures introduced in the Union Budget 2025, impacting both direct and indirect taxes for FY 2025-26.
Direct Tax Highlights
Indirect Tax Highlights
Inclusive Development Initiatives
FAQs on Budget 2025
Changes in New Tax Regime
The new tax regime has been made more attractive with several changes.
Income up to ₹3,00,000 is tax-free.
Tax rebate on income up to ₹7,50,000, effectively making it tax-free.
Standard deduction of ₹50,000 for salaried individuals.
Presumptive Taxation Limits
Revised limits for small businesses and professionals.
Section 44AD limit increased to ₹3 crores.
Section 44ADA limit increased to ₹75 lakhs.
95% of receipts must be through digital modes.
Start-up Tax Benefits
Extended benefits for start-ups to encourage innovation.
Incorporation date for tax benefits extended to 31st March 2025.
Loss carry forward period extended to 10 years.
Shareholding continuity condition applies.
Co-operative Societies
Incentives for co-operative societies to boost rural economy.
Concessional tax rate of 15% for new manufacturing co-operatives.
TDS limit on cash withdrawals increased to ₹3 crores.
Cash deposit limit for primary agricultural societies increased.
Customs Duty Adjustments
Revisions in customs duty to promote domestic manufacturing.
Increased duty on imported electronics.
Reduced duty on raw materials for solar panels.
Duty exemptions for certain medical devices.
GST Reforms
GST changes to streamline tax structure and compliance.
Simplified GST return filing process.
Increased threshold for GST registration to ₹40 lakhs.
Introduction of e-invoicing for businesses above ₹5 crores turnover.
Agricultural Support
Initiatives to enhance agricultural productivity and income.
Increased allocation for PM-KISAN scheme.
Subsidies for organic farming inputs.
Expansion of irrigation infrastructure.
Healthcare Investments
Boosting healthcare infrastructure and accessibility.
Increased funding for Ayushman Bharat.
Establishment of new AIIMS in underserved regions.
Tax incentives for healthcare start-ups.
What are the new income tax slabs for FY 2025-26?
The new tax regime for FY 2025-26 includes a nil rate for income up to ₹3,00,000, 5% for ₹3,00,001 to ₹6,00,000, 10% for ₹6,00,001 to ₹9,00,000, 15% for ₹9,00,001 to ₹12,00,000, 20% for ₹12,00,001 to ₹15,00,000, and 30% for income above ₹15,00,000.
How does the tax rebate work under the new regime?
Under the new tax regime, a tax rebate is available for individuals with an income of up to ₹7,50,000, effectively making their tax liability zero after accounting for the standard deduction.
What are the conditions for presumptive taxation?
For presumptive taxation under Section 44AD and 44ADA, businesses must ensure that at least 95% of their receipts are through digital transactions to benefit from the increased limits of ₹3 crores and ₹75 lakhs respectively.
What benefits are available for start-ups?
Start-ups incorporated until 31st March 2025 can avail tax benefits, including a 10-year period for carrying forward losses, provided the original shareholders maintain at least 51% shareholding.
How has the GST registration threshold changed?
The GST registration threshold has been increased to ₹40 lakhs for businesses, simplifying compliance for small enterprises and reducing the tax burden.
What are the new healthcare tax incentives?
Healthcare start-ups can benefit from tax incentives, including deductions for research and development expenses and reduced GST rates on medical equipment.
How does the customs duty change affect electronics?
The customs duty on imported electronics has been increased to encourage domestic manufacturing, making locally produced electronics more competitive in pricing.
What is the impact of the new e-invoicing rule?
Businesses with a turnover above ₹5 crores are required to implement e-invoicing, which aims to streamline GST compliance and reduce tax evasion through better tracking of transactions.