The Union Minister of Finance and Corporate Affairs, Nirmala Sitharaman, presented her eighth Union Budget in Parliament on Saturday 1 February 2025, and the second under the current Government.
The Indian economy has shown resilience even amidst multiple economic stresses like the pandemic, geopolitical conflict and general elections, consistently performing at an average of over 6.3% GDP growth since 2006. This year’s Budget continues to focus on priorities and reforms working towards a ‘Viksit Bharat’ (a Developed India) by 2047.
We are pleased to share with you our summary of the Budget highlights:
India Union Budget 2025 Highlights
Key priorities of the budget include accelerated growth, inclusive development, enhanced spending power in the hands of growing middle class, private sector participation, rationalisation of federal tax structure, ease of doing business, regulatory reforms, trust first policy, rural and urban development, boost to agriculture, infrastructure, tourism and other sectors.
Tax-free income up to INR 12 lakhs, enhanced threshold for tax deduction at source (TDS) and reducing the compliance burden are going to bring a significant relief to the middle-class segment who has been the most affected, with no tangible benefits, in the past.
Regarding the global business sector, the government announced path-breaking changes in alternative investment funds (AIFs), support to foreign portfolio investors (FPIs), liberalised remittance scheme (LRS), shipping and insurance business, as well as extending tax neutrality to retail funds and exchange traded funds (ETFs). These steps in the right direction should further attract global business houses and fund managers to GIFT City’s International Financial Services Centre (IFSC).
Enhancing the ease of doing business and India’s competitiveness on the international stage was also a key component of the economic dynamism agenda through measures like the rationalisation of customs tariffs, modernising the central KYC registry and introducing the Bharat Trade Net with the objective of smoothing international trade processes.
Overall, it is a Budget that seeks to focus on positioning India as more integrated globally, while simultaneously working to enhance the wellbeing of its citizens.
We look forward to more clarity on the measures announced with publication of the new income tax bill in a week’s time, which is anticipated to be much shorter and more streamlined than the current version, further facilitating transition and a favourable business environment.
If you have any queries or comments regarding the Union Budget 2025, feel free to reach out to our team.
