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.

Disclaimer: The contents herein are only for information and do not amount to an offer, invitation or solicitation to buy or sell securities or any other financial product offered by Indiabulls Securities Limited (formerly Dhani Stocks Limited / DSL). The content mentioned herein is subject to updation, completion, amendment without notice and is not intended for distribution to, or use by, any person in any jurisdiction where such distribution or use would be contrary to law or would subject Indiabulls Securities Ltd. (formerly Dhani Stocks Ltd. / DSL) to any licensing or registration requirements. No content mentioned herein is intended to constitute any investment advice or opinion. ISL disclaims any liability with respect to accuracy of information or any error or omission or any loss or damage incurred by anyone in reliance on the contents herein. This blog is based on information obtained from public sources and sources believed to be reliable, but no independent verification has been made about its accuracy or its completeness is guaranteed. This content mentioned in this blog is solely for informational purpose and shall not be used and/or considered as an offer or invitation or solicitation to buy or sell securities or other financial instruments. ISL will not treat recipients as customers by virtue of their receiving this report. The securities / Mutual Fund units (if any) discussed and opinions expressed in this blog/report may not be suitable for all investors. Such investors must make their own investment decisions, based on their investment objectives, financial positions and specific needs. ISL accepts no liabilities whatsoever for any loss or damage of any kind arising out of the use of this report. Past performance is not necessarily a guide to future performance. Investors are advised to see Risk Disclosure Document to understand the risks associated before investing in the securities markets. ISL may have issued other blogs that are inconsistent with and reach different conclusion from the information presented in this blog.

Indiabulls Securities Limited (formerly Dhani Stocks Limited) is a Mutual Fund Distributor registered with ‘Association of Mutual Fund of India’ (AMFI) vide ARN number ARN-160411. Corporate Identification Number: U74999DL2003PLC122874; Registered office address: 1/1E, First Floor, East Patel Nagar, New Delhi - 110008. Tel.: 011-41052775, Fax: 011-42137986.; Correspondence office address: Plot no. 108, 5th Floor, IT Park, Udyog Vihar, Phase - I, Gurugram - 122016, Haryana. Tel: 022-61446300. Email: helpdesk@dhani.com