Income Tax Union Budget 2025 Expectations: Tax Relief and Growth Initiatives Expected

Taxpayers are anticipating income tax relief in the Income Tax Union Budget 2025, hoping it will increase their take-home pay and help boost consumer demand.

As the Income Tax Union Budget 2025 approaches, taxpayers, including the middle class and corporate India, are eagerly awaiting measures to boost their income and improve demand. Finance Minister Nirmala Sitharaman is set to present the Union Budget on February 1, 2025, with a strong focus on income tax relief, revised tax slabs, lower GST rates, and more initiatives to support businesses and the economy.

Key Budget Dates and Details:

• The first part of the Parliament’s Budget session begins on January 31 and concludes on February 13, 2025. The second part will run from March 10 to April 4, 2025.
• Finance Minister Sitharaman will deliver her speech on February 1, 2025, at 11 am in the Lok Sabha. The Budget will be broadcast live on Doordarshan, Sansad TV, and YouTube.

Nirmala Sitharaman’s 8th Budget Presentation: This will be Sitharaman’s second full budget under the current Modi government, and her eighth budget presentation overall. The stock market will remain open on February 1, 2025, despite the Union Budget presentation.

Sector-wise Expectations:

1. NBFCs Seek Support: Non-Banking Financial Companies (NBFCs) are calling for changes in the TDS (Tax Deducted at Source) on interest payments. Currently, the 10% TDS creates cash flow challenges for the sector. They also seek help for sustainable urbanization and digitization, which can expand access to affordable credit and support business growth.
2. MSMEs and Financial Inclusion: Micro, Small, and Medium Enterprises (MSMEs) are hoping for special liquidity windows and microfinance schemes to ease financial access. They also expect green financing initiatives that could fund environmentally sustainable projects.
3. Affordable Housing Boost: The affordable housing sector is looking for more government support, including a higher loan limit for homes in metro cities and quicker approval processes to address rising land costs. Developers are asking for incentives to increase the supply of affordable housing.
4. IT Industry Wants Innovation Focus: The IT sector expects increased funding for research and development in emerging technologies like AI, machine learning, and quantum computing. There are also calls for tax benefits to help IT startups and MSMEs scale their businesses and create job opportunities.
5. E-commerce Growth Support: E-commerce companies are expecting more focus on skill development and job creation. With a growing labor force, these companies believe that upskilling workers will lead to more spending power, which in turn boosts online shopping demand. Investments in logistics and digital infrastructure are also key to faster and more reliable deliveries.
6. Support for Senior Citizens: With India’s elderly population set to grow, there are calls for greater incentives for pension products and tax breaks on life insurance premiums, particularly for senior citizens, to ensure financial security in retirement.
7. Healthcare Sector Needs More Funding: The healthcare sector is asking for a larger budget allocation to improve public healthcare and achieve universal health coverage. They also hope for tax relief on health insurance premiums to reduce the financial burden on families.
8. Education Needs More Digital Focus: The education sector expects more investment in digital infrastructure to support the goals of the National Education Policy (NEP). There are also calls for reducing GST on educational products and strengthening programs for upskilling workers in new fields like AI.
9. MSME Challenges: The MSME sector is urging changes to the GST payment structure to reduce cash flow issues, especially since businesses have to pay GST before receiving payments from customers. Adjusting this would ease liquidity pressures and help MSMEs stay afloat.

Conclusion: As the Union Budget 2025 approaches, various sectors are looking for targeted measures that will boost economic growth, improve financial access, and support innovation. Tax relief, infrastructure development, and sector-specific incentives are expected to be key themes in the upcoming Budget.

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