🪄2025 Budget Session: All eyes on FM Nirmala Sitaraman's Speech🪄

🪄₹2025 Budget: All eyes on Feb 1 announcements By FM Nirmala Sitaraman ₹🪄

Union Finance Minister Nirmala Sitharaman is scheduled to present the Budget 2025 on February 1. Taxpayers, including the middle class and corporate India, are looking for tax reforms, such as revised income tax slabs, lower GST rates, regulatory updates, and anticipation of various capex allocation announcements. Amid the current economic situation, Indian taxpayers are seeking some relief.

The first part of the Parliament's Budget session will begin on January 31 and end on February 13, 2025. The second part will start on March 10 and conclude on April 4, 2025.

Nirmala Sitharaman will present the Union Budget 2025 in Parliament on February 1, 2025. Her speech will begin at 11 am in the Lok Sabha.

Union Budget 2025 speech will be Sitharaman's second full-fledged budget under the newly formed Narendra Modi-led-NDA government and her eighth overall budget presentation in Parliament.

Indian stock market, including the BSE and NSE, will remain open on February 1, 2025, despite it being a Saturday due to the Union Budget 2025-26.

With just two days to go for the Budget 2025, there are concerns over whether Finance Minister Nirmala Sitharaman will abandon the previous income tax system as the Union Budget 2025 deadline draws near. Many experts speculate that it may soon be eliminated with an increasing number of taxpayers opting for the new tax system and the government’s push for a simplified, transparent approach.

Budget 2025 Expectations

Rajneesh Chopra, Managing Director, Amway India, expects that lowering tax slabs will help direct sellers who are sole proprietors of their businesses foster overall economic growth.

“We urge the government to consider lowering income tax slabs helping direct sellers who are sole proprietors or small businesses. This adjustment would support the spirit of entrepreneurship and contribute to overall economic growth. Furthermore, lowering taxes would improve disposable power, allowing more number of people to invest in their health and wellbeing," said Chopra.

Reduce GST on compostable products

"As we approach the upcoming budget, one key issue demands immediate attention: the high cost of compostable cutlery and glasses. These eco-friendly alternatives are already more expensive than plastic options due to production costs, and the current 18% GST only aggravates the problem. This steep tax burden makes it even harder for businesses and consumers to embrace sustainable choices, hindering the widespread adoption of compostable products.

To accelerate the shift towards sustainability, it is crucial that the government reduces the GST on compostable products. A reduction to 5% or, ideally, an exemption from GST would make these alternatives far more accessible and affordable for consumers and businesses alike. By lowering the tax rate, we could significantly drive down the cost of eco-friendly cutlery and glasses, making it easier for industries to switch from plastic to compostable options. This change would not only help reduce our reliance on harmful plastics but also create a positive ripple effect in the market. As the demand for sustainable products increases, more businesses will invest in eco-friendly solutions, leading to a cleaner environment and a boost in the green economy. The potential benefits are clear: reduced plastic pollution, more sustainable production practices, and a stronger commitment to a circular economy.

By lowering the GST on compostable products, the government would provide the necessary push to make eco-friendly alternatives the norm rather than the exception. It’s time to create a market where sustainability and affordability go hand in hand, paving the way for a greener, more sustainable future,” says Shubham Sharma, COO, One Bamboo Pvt Ltd.

Will the government sunset the old tax regime?

“The new tax regime was introduced as an optional tax regime from FY 2020-21 onwards. While the new tax regime disallowed popular exemptions deductions like Section 80C related investments, medical insurance premium, house rent allowance etc. it offered a lower rate of tax with beneficial income slab rates. Ever since the introduction, the finance minister has made various changes in the new tax regime including changing the slab rates to make it more attractive for the taxpayer. For example, the standard deduction from taxable salary has been increased to INR 75,000 from INR 50,000 (as available in the old tax regime). Further, the employer’s contribution to the NPS is allowed as deduction up to 14% of specified salary as compared to 10% of salary in old tax regime. Also, from FY 2023-24 onwards, the new tax regime which was optional earlier was made the default tax regime unless the taxpayer expressly opted out of the same and selected the old tax regime. All of this has resulted in the increase in the number of taxpayers adopting the new tax regime. As per the Central Board of Direct Taxes for FY 2023-25 approximately 72 per cent of the taxpayers adopted the new tax regime as at July 2024 reflecting an increasing trend of taxpayers adopting the new tax regime. At the same time, there has been negligible or minimum changes to the old tax regime overall.

Having said this, the old tax regime continues to be beneficial for individuals with higher house property rental or other tax saving investments etc.

Hence, if the Government does consider bringing an end/ sunset to the old tax regime, they may adopt a gradual phased out approach and provide a roadmap of the same in the current Budget scheduled to be presented on 1 Feb 2025,” says Parizad Sirwalla, Partner and Head, Global Mobility Services, Tax, KPMG in India.

What are your expectations from this year's budget?

A few expectations from the people---

Reforms Under Section 80D

As the health concerns for the individuals are increasing the government may increase the deduction limit under Section 80D from Rs. 25,000 to Rs. 50,000.

Incentives for Homeowners

The government can increase the deduction limit on home loan interest unders Section 24(b) from Rs. 2 lakhs to Rs. 3 lakhs. This would promote homeownership and real estate development.

Increase in Limit Under Section 80C

The deduction limit under section 80C may be increased to Rs. 2,00,000 from Rs. 1,50,000 as it has remained unchanged since 2014. This will promote investments in tax saving FDs, PPF, LIC, etc.

Corporate Tax Adjustments

With the dollar rising against the dollar, it is important for the government to support the Make in India initiatives. For the corporate sector, particularly new manufacturing units, the 15% concessional tax rate under Section 115BAB should be extended. This incentive was initially set to expire in March 2024 but should be extended to attract more investments in manufacturing, driving the pace of economic growth.

Production Linked Incentives for R&D

To foster innovation, the government might introduce new production-linked incentives for Research and Development (R&D) activities. These could include additional deductions for specified R&D expenditures based on certain criteria, such as increased turnover, employment generation, or capital investment.

Changes in Tax Slabs

The government should consider revising tax slabs to provide relief to middle-class taxpayers by potentially reducing the income tax rates for individuals earning up to Rs 15 lakh annually. This can increase the overall disposable income and boost consumption.​

Relief for MSMEs

MSMEs are expecting significant relief from the upcoming Budget 2025, with hopes for measures that will drive growth. Key areas of focus include financial support, tax relief, and improved access to credit, all aimed at creating a more favorable environment for these businesses.

Union Budget 2025 News Live: AI to be focus in the upcoming budget?

Union Budget 2025 News Live: “As we approach Union Budget 2025, it’s crucial to recognize India’s immense potential to lead the global innovation landscape, especially with emerging technologies like AI. AI is not just a driver of innovation; it is key to economic growth and global competitiveness. This budget presents an opportunity to introduce forward-thinking policies that promote responsible AI innovation ensuring strong regulatory frameworks that protect data privacy and ethical deployment.

India has already taken significant strides in this direction. The government's AI Mission is one step further to reinforcing India's commitment to AI-led growth. In parallel, the exponential growth of GCCs in India highlights our country’s strategic importance as a global innovation hub. To sustain this momentum, we must ensure robust support for deep tech innovation. We also need to create a dedicated deep tech fund to support startups in critical areas; this will further need significant investment, and a structured funding mechanism. Crucially, this must be linked to strong learning and upskilling initiatives to cultivate the next generation of AI and deep tech talent. As AI and automation redefine job roles, it is essential to prioritize upskilling and reskilling initiatives.

With the right policies in place, India will emerge as a global leader in AI, driving economic progress and technological advancement for the future,” said Sindhu Gangadharan, MD, SAP Labs India.

Budget 2025 expectations highlights: The Union Budget 2025, which will be the second full budget of Modi 3.0, is expected to be presented by Finance Minister Nirmala Sitharaman in Parliament at 11 am on Saturday, February 1, 2025, marking her eighth consecutive presentation of a Union Budget. This also makes her the first Finance Minister to present eight union budgets in a row. The previous record was held by Morarji Desai who presented six consecutive budgets.

The Budget 2025 is expected to have an increased focus on the agriculture sector with some tax reforms potentially taking place, such as the old tax regime getting phased out and introduction of zero income tax for those earning less than ₹10 lakh per annum.

Balancing between fiscal consolidation and economic growth will be another prominent theme due to rising inflation figures.

Looking fwds to some tax benefits for commoners like me .

What are your views on Budget this year?

I have no hopes. Mostly it should be non-event. For markets FM will leave it to RBI to announce rate cuts. No changes in personal tax. Few duty increases and decreases here and there. Big talk about support to agriculture, education, other sources of energy etc increase in defence expenditure.

No hopes from the budget. In every budget they find some way to extract more tax from the middle class.

The stock markets are usually closed on Saturdays. Despite February 1st falling on a Saturday, there is a special trading session on that day coinciding with the budget. So, business line would run parallel lives, one for the Union Budget and one for the stock Market.

The Union Budget is one of the most anticipated events every year for people across all walks of life. Be it the general public, government employees, private employees, corporate heads, business owners; everyone tunes wants to know what is in the budget for them or in some cases, what might affect them. Going by that norm, this year is no different either.