Budget 2025-2026
Speech of
Nirmala Sitharaman
Minister of Finance
February 1, 2025
Hon’ble Speaker,
I
present the Budget for 2025-26.
Introduction
1.
This Budget
continues our Government’s efforts to:
a)
accelerate
growth,
b)
secure
inclusive development,
c)
invigorate
private sector investments,
d)
uplift
household sentiments, and
e)
enhance
spending power of India’s rising middle class.
2.
Together, we
embark on a journey to unlock our nation’s tremendous potential for greater
prosperity and global positioning under the leadership of Hon’ble Prime
Minister Shri Narendra Modi.
3.
As we
complete the first quarter of the 21st century, continuing
geopolitical headwinds suggest lower global economic growth over the medium term. However, our aspiration for
a Viksit Bharat inspires us, and the transformative work we have done during
our Government’s first two terms guides us, to march forward resolutely.
Budget
Theme
4.
Our economy
is the fastest-growing among all major global economies. Our development track
record of the past 10 years and structural reforms have drawn global attention.
Confidence in India’s capability and potential has only grown in this period.
We see the next five years as a unique opportunity to realize ‘Sabka Vikas’,
stimulating balanced growth of all regions.
5.
The great Telugu poet and playwright
Gurajada Appa Rao had said, ‘Desamante Matti Kaadoi, Desamante Manushuloi’;
meaning, ‘A country is not just its soil, a country is its people.’ In line
with this, for us, Viksit Bharat, encompasses:
a) zero-poverty;
b) hundred
per cent good quality school education;
c) access
to high-quality, affordable, and comprehensive healthcare;
d) hundred
per cent skilled labour with meaningful employment;
e) seventy
per cent women in economic activities; and
f) farmers
making our country the ‘food basket of the world’.
6.
In this Budget, the proposed
development measures span ten broad areas focusing on Garib, Youth, Annadata
and Nari.
1)
Spurring Agricultural Growth and
Productivity;
2)
Building Rural Prosperity and
Resilience;
3)
Taking Everyone Together on an
Inclusive Growth path;
4)
Boosting Manufacturing and Furthering
Make in India;
5)
Supporting MSMEs;
6)
Enabling Employment-led Development;
7)
Investing in people, economy and
innovation;
8)
Securing Energy Supplies;
9)
Promoting Exports; and
10)
Nurturing Innovation.
7.
For this
journey of development,
a) Our
four powerful engines are: Agriculture, MSME, Investment, and Exports
b) The
fuel: our Reforms
c) Our
guiding spirit: Inclusivity
d) And
the destination: Viksit Bharat
8.
This Budget aims to initiate
transformative reforms across six domains. During the next five years, these
will augment our growth potential and global competitiveness. The domains are:
1)
Taxation;
2)
Power Sector;
3)
Urban Development;
4)
Mining;
5)
Financial Sector; and
6)
Regulatory Reforms.
Agriculture as the 1st Engine
9.
Now I move to specific proposals,
beginning with ‘Agriculture as the 1st Engine’.
Prime Minister Dhan-Dhaanya Krishi Yojana -
Developing Agri Districts Programme
10.
Motivated by the success of the
Aspirational Districts Programme, our Government will undertake a ‘Prime
Minister Dhan-Dhaanya Krishi Yojana’ in partnership with states. Through
the convergence of existing schemes and specialized measures, the programme
will cover 100 districts with low productivity, moderate crop intensity and
below-average credit parameters. It aims to (1) enhance agricultural
productivity, (2) adopt crop diversification and sustainable agriculture
practices, (3) augment post-harvest storage at the panchayat and block level,
(4) improve irrigation facilities, and (5) facilitate availability of long-term
and short-term credit. This programme is likely to help 1.7 crore farmers.
Building Rural Prosperity and Resilience
11.
A comprehensive multi-sectoral ‘Rural
Prosperity and Resilience’ programme will be launched in partnership with
states. This will address under-employment in agriculture through skilling,
investment, technology, and invigorating the rural economy. The goal is to
generate ample opportunities in rural areas so that migration is an option, but
not a necessity.
12.
The programme will focus on rural
women, young farmers, rural youth, marginal and small farmers, and landless
families. Details are in Annexure A.
13.
Global and domestic best practices
will be incorporated and appropriate technical and financial assistance will be
sought from multilateral development banks. In Phase-1, 100 developing
agri-districts will be covered.
Aatmanirbharta in Pulses
14.
Our Government is implementing the
National Mission for Edible Oilseed for achieving atmanirbhrata in edible oils.
Our farmers have the capability to grow enough for our needs and more.
15.
Ten years ago, we made concerted
efforts and succeeded in achieving near self-sufficiency in pulses. Farmers
responded to the need by increasing the cultivated area by 50 per cent and Government
arranged for procurement and remunerative prices. Since then, with rising
incomes and better affordability, our consumption of pulses has increased
significantly.
16.
Our Government will now launch a
6-year “Mission for Aatmanirbharta in Pulses” with a special focus on Tur, Urad
and Masoor. Details are in Annexure B.
Central agencies (NAFED and NCCF) will be ready to procure these 3 pulses, as
much as offered during the next 4 years from farmers who register with these
agencies and enter into agreements.
Comprehensive Programme for Vegetables
& Fruits
17.
It is encouraging that our people are
increasingly becoming aware of their nutritional needs. It is a sign of a
society becoming healthier. With rising income levels, the consumption of
vegetables, fruits and shree-anna is increasing significantly. A comprehensive
programme to promote production, efficient supplies, processing, and
remunerative prices for farmers will be launched in partnership with states.
Appropriate institutional mechanisms for implementation and participation of
farmer producer organizations and cooperatives will be set up.
Makhana Board in Bihar
18.
For this, there is a special
opportunity for the people of Bihar. A Makhana Board will be established in the
state to improve production, processing, value addition, and marketing of
makhana. The people engaged in these activities will be organized into FPOs.
The Board will provide handholding and training support to makhana farmers and
will also work to ensure they receive the benefits of all relevant Government
schemes.
National Mission on High Yielding
Seeds
19.
A National Mission on High Yielding
Seeds will be launched, aimed at (1) strengthening the research ecosystem, (2)
targeted development and propagation of seeds with high yield, pest resistance
and climate resilience, and (3) commercial availability of more than 100 seed
varieties released since July 2024.
Fisheries
20.
India ranks second-largest globally in
fish production and aquaculture. Seafood exports are valued at `
60 thousand crore. To unlock the untapped potential of the marine sector, our Government
will bring in an enabling framework for sustainable harnessing of fisheries
from Indian Exclusive Economic Zone and High Seas, with a special focus on the
Andaman & Nicobar and Lakshadweep Islands.
Mission for Cotton Productivity
21.
For the benefit of lakhs of cotton
growing farmers, I am pleased to announce a ‘Mission for Cotton Productivity’.
This 5-year mission will facilitate significant improvements in productivity
and sustainability of cotton farming, and promote extra-long staple cotton
varieties. The best of science & technology support will be provided to
farmers. Aligned with our integrated 5F vision for the textile sector, this
will help in increasing incomes of the farmers, and ensure a steady supply of
quality cotton for rejuvenating India’s traditional textile sector.
Enhanced Credit through KCC
22.
Kisan Credit Cards (KCC) facilitate
short term loans for 7.7 crore farmers, fishermen, and dairy farmers. The loan
limit under the Modified Interest Subvention Scheme will be enhanced from `
3 lakh to 5 lakh for loans taken through the KCC.
Urea Plant in Assam
23.
For Atmanirbharta in urea production,
our Government had reopened three dormant urea plants in the Eastern region. To
further augment urea supply, a plant with annual capacity of 12.7 lakh metric
tons will be set up at Namrup, Assam.
India Post as a Catalyst for the Rural Economy
24.
India Post with
1.5 lakh rural post offices, complemented by the India Post Payment Bank and a
vast network of 2.4 lakh Dak Sevaks, will be repositioned to act as a catalyst
for the rural economy. Details are at Annexure C.
25.
India Post will also be transformed as
a large public logistics organization. This will meet the rising needs of
Viswakarmas, new entrepreneurs, women, self-help groups, MSMEs, and large
business organizations.
Support to NCDC
26.
Our Government will provide support to
NCDC for its lending operations for the cooperative sector.
MSMEs as the 2nd engine
27.
Now, I move to MSMEs as the 2nd
engine, which encompasses manufacturing and services with a focus on MSMEs
numbering 5.7 crore.
Revision in classification criteria
for MSMEs
28.
Currently, over 1
crore registered MSMEs, employing 7.5 crore people, and generating 36 per cent
of our manufacturing, have come together to position India as a global
manufacturing hub. With their quality products, these MSMEs are responsible for
45 per cent of our exports. To help them achieve higher efficiencies of scale,
technological upgradation and better access to capital, the investment and
turnover limits for classification of all MSMEs will be enhanced to 2.5 and 2
times respectively. This will give them the confidence to grow and generate
employment for our youth. The details are in Annexure D.
Significant enhancement of credit
availability with guarantee cover
29.
To improve access to credit, the
credit guarantee cover will be enhanced:
a)
For Micro and Small Enterprises, from `
5 crore to 10 crore, leading to additional credit of `
1.5 lakh crore in the next 5 years;
b)
For Startups, from `
10 crore to 20 crore, with the guarantee fee being moderated to 1 per cent for
loans in 27 focus sectors important for Atmanirbhar Bharat; and
c)
For well-run exporter MSMEs, for term
loans up to ` 20 crore.
Credit Cards for Micro Enterprises
30.
We will introduce customized Credit
Cards with a ` 5 lakh limit for
micro enterprises registered on Udyam portal. In the first year, 10 lakh such
cards will be issued.
Fund of Funds for Startups
31.
The Alternate Investment Funds (AIFs)
for startups have received commitments of more than `
91,000 crore. These are supported by the Fund of Funds set up with a Government
contribution of ` 10,000 crore.
Now, a new Fund of Funds, with expanded scope and a fresh contribution of
another
` 10,000 crore will be set up.
Scheme
for First-time Entrepreneurs
32.
A new scheme will be launched for 5
lakh women, Scheduled Castes and Scheduled Tribes first-time entrepreneurs.
This will provide term loans up
to ` 2 crore during the next 5 years. The
scheme will incorporate lessons from the successful Stand-Up India scheme.
Online capacity building for entrepreneurship and managerial skills will also
be organized.
Measures for Labour-Intensive Sectors
33.
To promote employment and
entrepreneurship opportunities in labour-intensive sectors, our Government will
undertake specific policy and facilitation measures.
Focus Product Scheme for Footwear
& Leather Sectors
34.
To enhance the productivity, quality
and competitiveness of India’s footwear and leather sector, a focus product
scheme will be implemented. The scheme will support design capacity, component
manufacturing, and machinery required for production of non-leather quality
footwear, besides the support for leather footwear and products. The scheme is
expected to facilitate employment for 22 lakh persons, generate turnover of `
4 lakh crore and exports of over ` 1.1 lakh crore.
Measures for the
Toy Sector
35.
Building on the National Action Plan
for Toys, we will implement a scheme to make India a global hub for toys. The
scheme will focus on development of clusters, skills, and a manufacturing
ecosystem that will create high-quality, unique, innovative, and sustainable
toys that will represent the 'Made in India' brand.
Support for Food Processing
36.
In line with our commitment towards
‘Purvodaya’, we will establish a National Institute of Food Technology,
Entrepreneurship and Management in Bihar. The institute will provide a strong
fillip to food processing activities in the entire Eastern region. This will
result in (1) enhanced income for the farmers through value addition to their
produce, and (2) skilling, entrepreneurship and employment opportunities for
the youth.
Manufacturing Mission - Furthering
“Make in India”
37.
Our Government will set up a National
Manufacturing Mission covering small, medium and large industries for
furthering “Make in India” by providing policy support, execution roadmaps,
governance and monitoring framework for central ministries and states. Details
are in Annexure E.
Clean Tech Manufacturing
38.
Given our commitment to
climate-friendly development, the Mission will also support Clean Tech
manufacturing. This will aim to improve domestic value addition and build our
ecosystem for solar PV cells, EV batteries, motors and controllers,
electrolyzers, wind turbines, very high voltage transmission equipment and grid
scale batteries.
Investment as the 3rd engine
39.
Now, I move to Investment as the 3rd
engine, which encompasses investing in people, investing in the economy and
investing in innovation.
A.
Investing in People
Saksham Anganwadi and Poshan 2.0
40.
The Saksham Anganwadi and Poshan 2.0
programme provides nutritional support to more than 8 crore children, 1 crore
pregnant women and lactating mothers all over the country, and about 20 lakh
adolescent girls in aspirational districts and the north-east region. The cost
norms for the nutritional support will be enhanced appropriately.
Atal Tinkering Labs
41.
Fifty thousand Atal Tinkering Labs
will be set up in Government schools in next 5 years to cultivate the spirit of
curiosity and innovation, and foster a scientific temper among young minds.
Broadband Connectivity to Government
Secondary Schools and PHCs
42.
Broadband connectivity will be
provided to all Government secondary schools and primary health centres in
rural areas under the Bharatnet project.
Bharatiya Bhasha Pustak Scheme
43.
We propose to implement a Bharatiya
Bhasha Pustak Scheme to provide digital-form Indian language books for school
and higher education. This aims to help students understand their subjects
better.
National Centres of Excellence for Skilling
44.
Building on the initiative announced
in the July 2024 Budget, five National Centres of Excellence for skilling will
be set up with global expertise and partnerships to equip our youth with the
skills required for “Make for India, Make for the World” manufacturing. The
partnerships will cover curriculum design, training of trainers, a skills
certification framework, and periodic reviews.
Expansion of Capacity in IITs
45.
Total number of students in 23 IITs
has increased 100 per cent from 65,000 to 1.35 lakh in the past 10 years.
Additional infrastructure will be created in the 5 IITs started after 2014 to
facilitate education for 6,500 more students. Hostel and other infrastructure
capacity at IIT, Patna will also be expanded.
Centre of Excellence in AI for
Education
46.
I had announced three Centres of
Excellence in Artificial Intelligence for agriculture, health, and sustainable cities in 2023. Now a Centre
of Excellence in Artificial Intelligence for education will be set up with a
total outlay of ` 500 crore.
Expansion of medical education
47.
Our Government has added almost 1.1
lakh UG and PG medical education seats in ten years, an increase of 130 per
cent. In the next year, 10,000 additional seats will be added in medical
colleges and hospitals, towards the goal of adding 75,000 seats in the next 5
years.
Day Care Cancer Centres in all
District Hospitals
48.
Our Government
will facilitate setting up of Day Care Cancer Centres in all district hospitals
in the next 3 years. 200 Centres will be established in 2025-26.
Strengthening urban livelihoods
49.
Our Government has been giving
priority to assisting urban poor and vulnerable groups. A scheme for
socio-economic upliftment of urban workers will be implemented to help them
improve their incomes, have sustainable livelihoods and a better quality of
life.
PM SVANidhi
50.
PM SVANidhi scheme has benefitted more
than 68 lakh street vendors giving them respite from high-interest informal
sector loans. Building on this success, the scheme will be revamped with
enhanced loans from banks, UPI linked credit cards with `
30,000 limit, and capacity building support.
Social Security Scheme for Welfare of
Online Platform Workers
51.
Gig workers of online platforms
provide great dynamism to the new-age services economy. Recognising their contribution, our Government
will arrange for their identity cards and registration on the e-Shram portal.
They will be provided healthcare under PM Jan Arogya Yojana. This measure is
likely to assist nearly 1 crore gig-workers.
B.
Investing in the Economy
Public Private Partnership in Infrastructure
52.
Each infrastructure-related ministry
will come up with a 3-year pipeline of projects that can be implemented in PPP
mode. States will also be encouraged to do so and can seek support from the
IIPDF (India Infrastructure Project Development Fund) scheme to prepare PPP
proposals.
Support to States for Infrastructure
53.
An outlay of `
1.5 lakh crore is proposed for the 50-year interest free loans to states for
capital expenditure and incentives for reforms.
Asset Monetization Plan 2025-30
54.
Building on the success of the first
Asset Monetization Plan announced in 2021, the second Plan for 2025-30 will be
launched to plough back capital of ` 10 lakh crore in
new projects. Regulatory and fiscal measures will be fine-tuned to support the
Plan.
Jal Jeevan Mission
55.
Since 2019, 15 crore households
representing 80 per cent of India’s rural population have been provided access
to potable tap water connections. To achieve 100 per cent coverage, I am
pleased to announce the extension of the Mission until 2028 with an enhanced total
outlay.
56.
The Mission’s focus will be on the
quality of infrastructure and O&M of rural piped water supply schemes
through “Jan Bhagidhari”. Separate MoUs will be signed with states/UTs, to
ensure sustainability and citizen-centric water service delivery.
Urban Sector Reforms
57.
Building on the July Budget proposals,
urban sector reforms related to governance, municipal services, urban land, and
planning will be incentivized.
Urban Challenge Fund
58.
The Government will set up an Urban
Challenge Fund of ` 1 lakh crore to
implement the proposals for ‘Cities as Growth Hubs’, ‘Creative Redevelopment of
Cities’ and ‘Water and Sanitation’ announced in the July Budget.
59.
This fund will finance up to 25 per
cent of the cost of bankable projects with a stipulation that at least 50 per
cent of the cost is funded from bonds, bank loans, and PPPs. An allocation of `
10,000 crore is proposed for 2025-26.
Power Sector Reforms
60.
We will incentivize electricity
distribution reforms and augmentation of intra-state transmission capacity by
states. This will improve financial health and capacity of electricity
companies. Additional borrowing of 0.5 per cent of GSDP will be allowed to
states, contingent on these reforms.
Nuclear Energy Mission for Viksit
Bharat
61.
Development of at least 100 GW of
nuclear energy by 2047 is essential for our energy transition efforts. For an
active partnership with the private sector towards this goal, amendments to the
Atomic Energy Act and the Civil Liability for Nuclear Damage Act will be taken
up.
62.
A Nuclear Energy Mission for research
& development of Small Modular Reactors (SMR) with an outlay of `
20,000 crore will be set up. At least 5
indigenously developed SMRs will be operationalized by 2033.
Shipbuilding
63.
The Shipbuilding Financial Assistance
Policy will be revamped to address cost disadvantages. This will also include
Credit Notes for shipbreaking in Indian yards to promote the circular economy.
64.
Large ships above a specified size
will be included in the infrastructure harmonized master list (HML).
65.
Shipbuilding Clusters will be
facilitated to increase the range, categories and capacity of ships. This will
include additional infrastructure facilities, skilling and technology to
develop the entire ecosystem.
Maritime Development Fund
66.
For long-term financing for the
maritime industry, a Maritime Development Fund with a corpus of `
25,000 crore will be set up. This will be for distributed support and promoting
competition. This will have up to 49 per cent contribution by the Government,
and the balance will be mobilized from ports and private sector.
UDAN - Regional Connectivity
Scheme
67.
UDAN has enabled 1.5 crore
middle-class people to meet their aspirations for speedier travel. The scheme
has connected 88 airports and operationalized 619 routes. Inspired by that
success, a modified UDAN scheme will be launched to enhance regional connectivity
to 120 new destinations and carry 4 crore passengers in the next 10 years. The scheme will also support helipads and
smaller airports in hilly, aspirational, and North East region districts.
Greenfield Airport in Bihar
68.
Greenfield airports will be
facilitated in Bihar to meet the future needs of the State. These will be in
addition to the expansion of the capacity of Patna airport and a brownfield
airport at Bihta.
Western Koshi Canal Project in
Mithilanchal
69.
Financial support will be provided for
the Western Koshi Canal ERM Project benefitting a large number of farmers
cultivating over 50,000 hectares of land in the Mithilanchal region of Bihar.
Mining Sector Reforms
70.
Mining sector reforms, including those
for minor minerals, will be encouraged through sharing of best practices and
institution of a State Mining Index.
71.
A policy for
recovery of critical minerals from tailings will be brought out.
SWAMIH Fund 2
72.
Under the Special Window for
Affordable and Mid-Income Housing (SWAMIH) fifty thousand dwelling units in
stressed housing projects have been completed, and keys handed over to
home-buyers. Another forty thousand units will be completed in 2025, further helping
middle-class families who were paying EMIs on loans taken for apartments, while
also paying rent for their current dwellings.
73.
Building on this success, SWAMIH Fund
2 will be established as a blended finance facility with contribution from the Government,
banks and private investors. This fund of ` 15,000 crore
will aim for expeditious completion of another 1 lakh units.
PM Gati Shakti Data for Private Sector
74.
For furthering PPPs and assisting the
private sector in project planning, access to relevant data and maps from the
PM Gati Shakti portal will be provided.
Tourism for employment-led growth
75.
Top 50 tourist destination sites in
the country will be developed in partnership with states through a challenge
mode. Land for building key infrastructure will have to be provided by states.
Hotels in those destinations will be included in the infrastructure HML.
76.
The following measures will be taken
for facilitating employment-led growth:
1)
Organizing intensive skill-development
programmes for our youth including in Institutes of Hospitality Management;
2)
Providing MUDRA loans for homestays;
3)
Improving ease of travel and
connectivity to tourist destinations;
4)
Providing performance-linked
incentives to states for effective destination management including tourist
amenities, cleanliness, and marketing efforts; and
5)
Introducing streamlined e-visa
facilities along with visa-fee waivers for certain tourist groups.
77.
Continuing with the emphasis on places
of spiritual and religious significance in the July Budget, there will be a
special focus on destinations related to the life and times of Lord Buddha.
Medical Tourism and Heal in India
78.
Medical Tourism and Heal in India will
be promoted in partnership with the private sector along with capacity building
and easier visa norms.
C. Investing
in Innovation
Research, Development and Innovation
79.
To implement private sector driven
Research, Development and Innovation initiative announced in the July Budget, I
am now allocating
` 20,000 crore.
Deep Tech Fund of Funds
80.
A Deep Tech Fund of Funds will also be
explored to catalyze the next generation startups as a part of this initiative.
PM Research Fellowship
81.
In the next five years, under the PM
Research Fellowship scheme, we will provide ten thousand fellowships for
technological research in IITs and IISc with enhanced financial support.
Gene Bank for Crops Germplasm
82.
The 2nd Gene Bank with 10
lakh germplasm lines will be set up for future food and nutritional security.
This will provide conservation support to both public and private sectors for
genetic resources.
National Geospatial Mission
83.
We will start a National Geospatial
Mission to develop foundational geospatial infrastructure and data. Using PM
Gati Shakti, this Mission will facilitate modernization of land records, urban
planning, and design of infrastructure projects.
Gyan Bharatam Mission
84.
A Gyan Bharatam Mission for survey,
documentation and conservation of our manuscript heritage with academic
institutions, museums, libraries and private collectors will be undertaken to
cover more than 1 crore manuscripts. We will set up a National Digital
Repository of Indian knowledge systems for knowledge sharing.
85.
Now, I move to Exports as the 4th
engine.
Exports as the 4th engine
Export Promotion Mission
86.
We will set up an Export Promotion
Mission, with sectoral and ministerial targets, driven jointly by the
Ministries of Commerce, MSME, and Finance. It will facilitate easy access to
export credit, cross-border factoring support, and support to MSMEs to tackle
non-tariff measures in overseas markets.
BharatTradeNet
87.
A digital public infrastructure,
‘BharatTradeNet’ (BTN) for international trade will be set-up as a unified
platform for trade documentation and financing solutions. This will complement
the Unified Logistics Interface Platform. The BTN will be aligned with
international practices.
Support for integration with Global
Supply Chains
88.
Support will be provided to develop
domestic manufacturing capacities for our economy’s integration with global
supply chains. Sectors will be identified based on objective criteria.
89.
Facilitation groups with participation
of senior officers and industry representatives will be formed for select
products and supply chains.
90.
Through this, there are huge opportunities
related to Industry 4.0, which needs high skills and talent. Our youth have
both. Our Government will support the domestic electronic equipment industry to
leverage this opportunity for the benefit of the youth.
National Framework for GCC
91.
A national framework will be
formulated as guidance to states for promoting Global Capability Centres in
emerging tier 2 cities. This will suggest measures for enhancing availability
of talent and infrastructure, building-byelaw reforms, and mechanisms for
collaboration with industry.
Warehousing facility for air cargo
92.
Our Government will facilitate
upgradation of infrastructure and warehousing for air cargo including high
value perishable horticulture produce. Cargo screening and customs protocols
will be streamlined and made user-friendly.
Reforms as the Fuel
93.
Now I move to ‘Reforms as the Fuel’,
and detail specific reforms.
Tax Reforms
94.
Over the past 10
years, our Government has implemented several reforms for convenience of tax
payers, such as (1) faceless assessment, (2) tax payers charter, (3) faster
returns, (4) almost 99 per cent returns being on self-assessment, and (5) Vivad
se Vishwas scheme. Continuing these efforts,
I reaffirm the commitment of the tax department to “trust first, scrutinize
later”. I also propose to introduce the new income-tax bill next week. I will
detail the indirect tax reforms and changes in direct taxes in Part B.
Financial Sector Reforms and Development
95.
The FDI limit for the insurance sector
will be raised from 74 to 100 per cent. This enhanced limit will be available
for those companies which invest the entire premium in India. The current
guardrails and conditionalities associated with foreign investment will be
reviewed and simplified.
Expanding Services of India Post Payment Bank
96.
The services of India Post Payment
Bank will be deepened and expanded in rural areas.
Credit Enhancement Facility by NaBFID
97.
NaBFID will set up a ‘Partial Credit
Enhancement Facility’ for corporate bonds for infrastructure.
Grameen Credit Score
98.
Public Sector Banks will develop
‘Grameen Credit Score’ framework to serve the credit needs of SHG members and
people in rural areas.
Pension Sector
99.
A forum for regulatory coordination
and development of pension products will be set up.
KYC Simplification
100.
To implement the earlier announcement
on simplifying the KYC process, the revamped Central KYC Registry will be
rolled out in 2025. We will also implement a streamlined system for periodic
updating.
Merger of Companies
101.
Requirements and procedures for speedy
approval of company mergers will be rationalized. The scope for fast-track
mergers will also be widened and the process made simpler.
Bilateral Investment Treaties
102.
As proposed in the Interim Budget, we
signed Bilateral Investment Treaties (BIT) with two countries in 2024. To
encourage sustained foreign investment and in the spirit of ‘first develop
India’, the current model BIT will be revamped and made more investor-friendly.
Regulatory Reforms
103.
In the last ten years in several
aspects, including financial and non-financial, our Government has demonstrated
a steadfast commitment to ‘Ease of Doing Business’. We are determined to ensure
that our regulations must keep up with technological innovations and global
policy developments. A light-touch regulatory framework based on principles and
trust will unleash productivity and employment. Through this framework, we will
update regulations that were made under old laws. To develop this modern,
flexible, people-friendly, and trust-based regulatory framework appropriate for
the twenty-first century, I propose four specific measures:
High Level Committee for Regulatory
Reforms
104.
A High-Level Committee for Regulatory
Reforms will be set up for a review of all non-financial sector regulations,
certifications, licenses, and permissions. The committee will be expected make
recommendations within a year. The objective is to strengthen trust-based
economic governance and take transformational measures to enhance ‘ease of
doing business’, especially in matters of inspections and compliances. States will be encouraged to join in this
endeavour.
Investment Friendliness Index of States
105.
An Investment Friendliness Index of
States will be launched in 2025 to further the spirit of competitive
cooperative federalism.
FSDC Mechanism
106.
Under the Financial Stability and
Development Council, a mechanism will be set up to evaluate impact of the
current financial regulations and subsidiary instructions. It will also
formulate a framework to enhance their responsiveness and development of the
financial sector.
Jan Vishwas Bill 2.0
107.
In the Jan Vishwas Act 2023, more than
180 legal provisions were decriminalized. Our Government will now bring up the
Jan Vishwas Bill 2.0 to decriminalize more than 100 provisions in various
laws.
108.
Now I move to fiscal policy matters.
Fiscal
Consolidation
109.
In the July Budget, I had committed to
staying the course for fiscal consolidation. Our endeavour will be to keep the
fiscal deficit each year such that the Central Government debt remains on a
declining path as a percentage of the GDP. The roadmap for the next 6 years has
been detailed in the FRBM statement.
Revised
Estimates 2024-25
110.
The Revised Estimate
of the total receipts other than borrowings is
` 31.47 lakh
crore, of which the net
tax receipts
are `
25.57 lakh crore. The Revised Estimate of the total expenditure is `
47.16 lakh crore, of which
the capital expenditure is about
` 10.18 lakh crore.
111.
The Revised Estimate of the fiscal
deficit is 4.8 per cent of GDP.
Budget
Estimates 2025-26
112.
Coming to 2025-26, the total
receipts other than borrowings and the total expenditure are estimated
at ` 34.96 lakh crore and `
50.65 lakh crore respectively. The net tax receipts are estimated at `
28.37 lakh crore.
113.
The
fiscal deficit is estimated to be 4.4 per cent of
GDP.
114.
To finance the fiscal deficit, the net
market borrowings from dated securities are estimated at `
11.54 lakh crore. The balance financing is expected to come from small savings
and other sources. The gross market borrowings are estimated at `
14.82 lakh crore.
I will now move
to Part B.
PART
B
Indirect Taxes
115.
My proposals relating to Customs aim
to rationalize tariff structure and address duty inversion. These will also
support domestic manufacturing and value addition, promote exports, facilitate
trade and provide relief to common people.
Rationalisation of Customs Tariff Structure
for Industrial Goods
116.
As a part of comprehensive review of
Customs rate structure announced in July 2024 Budget, I propose to:
(i)
remove seven tariff rates. This is
over and above the seven tariff rates removed in 2023-24 budget. After this,
there will be only eight remaining tariff rates including ‘zero’ rate.
(ii)
apply appropriate cess to broadly
maintain effective duty incidence except on a few items, where such incidence
will reduce marginally.
(iii)
levy not more than one cess or
surcharge. Therefore, I propose to exempt Social Welfare Surcharge on 82 tariff
lines that are subject to a cess.
117.
I shall now take up sector specific
proposals.
Relief on import
of Drugs/Medicines
118.
To provide relief to patients, particularly
those suffering from cancer, rare diseases and other severe chronic diseases, I
propose to add 36 lifesaving drugs and medicines to the list of medicines fully
exempted from Basic Customs Duty (BCD).
I also propose to add 6 lifesaving medicines to the list attracting
concessional customs duty of 5%. Full exemption and concessional duty will also
respectively apply on the bulk drugs for manufacture of the above.
119.
Specified drugs and medicines under
Patient Assistance Programmes run by pharmaceutical companies are fully exempt
from BCD, provided the medicines are supplied free of cost to patients. I
propose to add 37 more medicines along with 13 new patient assistance
programmes.
Support to
Domestic Manufacturing and Value addition
Critical Minerals
120.
In the July 2024 Budget, I had fully
exempted BCD on 25 critical minerals that are not domestically available. I had
also reduced BCD of 2 other such minerals to provide a major fillip to their
processing especially by MSMEs. Now, I propose to fully exempt cobalt powder
and waste, the scrap of lithium-ion battery, Lead, Zinc and 12 more critical
minerals. This will help secure their availability for manufacturing in India
and promote more jobs for our youth.
Textiles
121.
To promote domestic production of technical
textile products such as agro-textiles, medical textiles and geo textiles at
competitive prices, I propose to add two more types of shuttle-less looms to
the list of fully exempted textile machinery.
I also propose to revise the BCD rate on knitted fabrics covered by nine
tariff lines from “10% or 20%” to “20% or ` 115 per kg,
whichever is higher”.
Electronic Goods
122.
In line with our ‘Make in India’
policy, and to rectify inverted duty structure, I propose to increase the BCD
on Interactive Flat Panel Display (IFPD) from 10% to 20% and reduce the BCD to
5% on Open Cell and other components.
123.
In 2023 -24 Budget, for the
manufacture of Open Cells of LCD/LED TVs, I had reduced the BCD on parts of
Open Cells from 5% to 2.5% . To further boost the manufacture of such Open
Cells, the BCD on these parts will now stand exempted.
Lithium Ion Battery
124.
To the list of exempted capital goods,
I propose to add 35 additional capital goods for EV battery manufacturing, and
28 additional capital goods for mobile phone battery manufacturing. This will
boost domestic manufacture of lithium-ion battery, both for mobile phones and
electric vehicles.
Shipping Sector
125.
Considering that
shipbuilding has a long gestation period, I propose to continue the exemption
of BCD on raw materials, components, consumables or parts for the manufacture
of ships for another ten years. I also propose the same dispensation for ship
breaking to make it more competitive.
Telecommunication
126.
To prevent classification disputes, I
propose to reduce the BCD from 20% to 10% on Carrier Grade ethernet switches to
make it at par with Non-Carrier Grade ethernet switches.
Export Promotion
Handicraft Goods
127. To facilitate exports of handicrafts, I propose
to extend the time period for export from six months to one year, further
extendable by another three months, if required. I also propose to add nine items to the list of
duty-free inputs.
Leather sector
128. I
propose to fully exempt BCD on Wet Blue leather to facilitate imports for
domestic value addition and employment. I also propose to exempt crust leather
from 20% export duty to facilitate exports by small tanners.
Marine products
129. To enhance India's competitiveness in the
global seafood market, I propose to reduce BCD from 30% to 5% on Frozen Fish
Paste (Surimi) for manufacture and export of its analogue products. I also
propose to reduce BCD from 15% to 5% on fish hydrolysate for manufacture of
fish and shrimp feeds.
Domestic MROs for Railway Goods
130. In
July 2024 Budget, to promote development of domestic MROs for aircraft and
ships, I had extended the time limit for export of foreign origin goods that
were imported for repairs, from 6 months to one year and further extendable by
one year. I now propose to extend the
same dispensation for railway goods.
Trade facilitation
Time limit for Provisional Assessment
131.
Presently, the Customs Act, 1962 does not provide any time limit to finalize
Provisional Assessments leading to uncertainty and cost to trade. As a measure
of promoting ease of doing business, I propose to fix a time-limit of two
years, extendable by a year, for finalising the provisional assessment.
Voluntary
Compliance
132. I
propose to introduce a new provision that will enable importers or exporters,
after clearance of goods, to voluntarily declare material facts and pay duty
with interest but without penalty. This will incentivise voluntary compliance. However, this will not apply in cases where
department has already initiated audit or investigation proceedings.
Extended Time for End Use
133. For industry to better plan their imports,
I propose to extend the time limit for the end-use of imported inputs in the
relevant rules, from six months to one year. This will provide operational
flexibility in view of cost and uncertainty of supply. Further, such importers
will now have to file only quarterly statements instead of a monthly statement.
Direct
Taxes
I now come to
my Direct tax proposals.
134.
In Part A, I have briefly
underlined Taxation Reforms as one of key reforms to realize our vision of
Viksit Bharat. In respect of criminal
law, Our Government had earlier ushered in Bharatiya Nyaya Sanhita replacing
Bharatiya Danda Sanhita. I am happy to inform this August House and the country
that the new income-tax bill will carry forward the same spirit of “Nyaya”. The
new bill will be clear and direct in text with close to half of the present
law, in terms of both chapters and words. It will be simple to understand for
taxpayers and tax administration, leading to tax certainty and reduced
litigation.
135.
Reforms, however, are not a destination. They are a means to achieve
good governance for our people and economy. Providing good governance primarily
involves being responsive. The Thirukkural captures this in Verse 542, which
reads:
வானோக்கி வாழும் உலகெல்லாம் மன்னவன்
கோல்நோக்கி
வாழுங் குடி.
vaanokki vaalum
ulakellaam mannavan
koalnokki vaalung kuti
Meaning:
Just as living beings live expecting rains,
Citizens live
expecting good governance.
Our Government is committed to keeping an ear to the ground and a finger
on the pulse, and responding while balancing our nation-building efforts. The
following measures will detail just how our Government under the guidance of PM
Modi has taken steps to understand and address the needs voiced by our
citizens. My tax proposals are guided by this spirit.
136.
The objectives of my proposals are as follows:
(i)
Personal Income Tax reforms with special focus on middle class
(ii)
Rationalization of TDS/TCS for easing difficulties
(iii)
Encouraging voluntary compliance
(iv)
Reducing compliance burden
(v)
Ease of doing business
(vi)
Employment and investment
I will come to my proposal on personal income tax towards the end.
TDS/TCS rationalization for easing difficulties
137.
I propose to rationalize Tax Deduction at Source (TDS) by reducing the
number of rates and thresholds above which TDS is deducted. Further, threshold
amounts for tax deduction will be increased for better clarity and uniformity.
The limit for tax deduction on interest for senior citizens is being doubled
from the present ` 50,000 to ` 1 lakh. Similarly, the annual limit of ` 2.40 lakh for TDS on rent is being
increased to ` 6 lakh. This will reduce the number of transactions liable to TDS, thus
benefitting small tax payers receiving small payments.
138.
The threshold to collect tax at source (TCS) on remittances under RBI’s
Liberalized Remittance Scheme (LRS) is proposed to be increased from ` 7 lakh to ` 10 lakh. I
also propose to remove TCS on remittances for education purposes, where such
remittance is out of a loan taken from a specified financial institution.
139.
Both TDS and TCS are being applied on any transaction relating to sale
of goods. To prevent such compliance difficulties, I propose to omit the TCS. I
also propose that the provisions of the higher TDS deduction will now apply
only in non-PAN cases.
140.
In July 2024, the delay for
payment of TDS up to the due date of filing statement was decriminalized. I
propose to provide the same relaxation to TCS provisions as well.
Encouraging Voluntary Compliance
141.
The Government under the leadership of Prime Minister Modi believes in
“Sabka Saath, Sabka Vikas, Sabka Vishwas and Sabka Prayas”. In line with this,
we brought in updated return facility in 2022 for voluntary compliance by
taxpayers who had omitted to report their correct income. Our trust in
taxpayers was proved right. Nearly 90 lakh taxpayers voluntarily updated their
incomes by paying additional tax. Taking this trust further, I now propose to
extend the time-limit to file updated returns for any
assessment year, from the current limit of two years, to four years.
Reducing Compliance Burden
142.
I propose to reduce the compliance burden for small charitable
trusts/institutions by increasing their period of registration from 5 years to
10 years. It is also proposed that disproportionate consequences do not arise
for minor defaults, such as incomplete applications filed by charitable
entities.
143.
Presently tax-payers can claim the annual value of self-occupied
properties as nil only on the fulfilment of certain conditions. Considering the
difficulties faced by taxpayers, it is proposed to allow the benefit of two
such self-occupied properties without any condition.
Ease of Doing Business
144.
To streamline the process of transfer pricing and to provide an
alternative to yearly examination, I propose to introduce a scheme for
determining arm's length price of international transaction for a block period
of three years. This will be in line with global best practices.
145.
With a view to reduce litigation and provide certainty in international
taxation, the scope of safe harbour rules is being expanded.
146.
A number of senior and very senior
citizens have very old National Savings Scheme accounts. As interest is no
longer payable on such accounts, I propose to exempt withdrawals made from NSS
by individuals on or after the 29th of August, 2024. I am also proposing to
allow similar treatment to NPS Vatsalya accounts as is available to normal NPS
accounts, subject to overall limits.
147.
In my speech in July 2024, I had promised that all processes including
giving effect to appellate orders shall be digitalized and made paper-less over
the next two years. I am happy to announce that digitalization is being made
operational.
148.
In July 2024, we brought in the Vivad Se Vishwas Scheme to resolve
income tax disputes pending in appeal. The scheme has received a great
response, with nearly 33,000 tax payers having availed of this scheme to settle
their disputes.
Employment and Investment
149.
I have a few proposals to promote investment and employment.
Tax certainty for electronics manufacturing Schemes
150.
It is proposed to provide a presumptive taxation regime for
non-residents who provide services to a resident company that is establishing
or operating an electronics manufacturing facility. I further propose to
introduce a safe harbour for tax certainty for non-residents who store
components for supply to specified electronics manufacturing units.
Tonnage Tax Scheme for Inland Vessels
151.
Presently the tonnage tax scheme is available to only sea going ships.
The benefits of existing tonnage tax scheme are proposed to be extended to
inland vessels registered under the Indian Vessels Act, 2021 to promote inland
water transport in the country.
Extension for incorporation of Start-Ups
152.
We continue to support the Indian start-up eco-system. I propose
to extend the period of incorporation by 5 years to allow the benefit available
to start-ups which are incorporated before 1.4.2030.
International
Financial Services Centre (IFSC)
153.
In order to attract and promote
additional activities in the IFSC, I am inter alia proposing specific
benefits to ship-leasing units, insurance offices and treasury centres of
global companies which are set up in IFSC.
Further, to claim benefits, the cut-off date for commencement in IFSC
has also been extended by five years to 31.3.2030.
Alternate
Investment Funds (AIFs)
154.
Category I and category II AIFs are undertaking investments in
infrastructure and other such sectors. I propose to provide certainty of
taxation to these entities on the gains from securities.
Extension of investment date for Sovereign and Pension Funds
155.
To promote funding from Sovereign Wealth Funds and Pension Funds to the
infrastructure sector, I propose to extend the date of making an investment by
five more years, to 31st March, 2030.
Personal Income- tax Reforms with special
focus on middle class
156.
Democracy, Demography and Demand are the key support pillars in our
journey towards Viksit Bharat. The middle class provides strength for India’s
growth. This Government under the leadership of Prime Minister Modi has always
believed in the admirable energy and ability of the middle class in nation
building. In recognition of their contribution, we have periodically reduced
their tax burden. Right after 2014, the ‘Nil tax’ slab was raised to
` 2.5 lakh, which was further raised to ` 5 lakh in
2019 and to ` 7 lakh in 2023. This is reflective of our
Government’s trust on the middle-class tax payers. I am now happy to announce
that there will be no income tax payable upto income of ` 12 lakh (i.e.
average income of ` 1 lakh per month other than special rate
income such as capital gains) under the new regime. This limit will be ` 12.75 lakh
for salaried tax payers, due to standard deduction of ` 75,000.
157.
Slabs and rates are being changed across the board to benefit all
tax-payers. The new structure will substantially reduce the taxes of the middle
class and leave more money in their hands, boosting household consumption,
savings and investment.
158.
In the new tax regime, I propose
to revise tax rate structure as follows:
|
0-4 lakh rupees |
Nil |
|
4-8 lakh rupees |
5 per cent |
|
8-12 lakh rupees |
10 per cent |
|
12-16 lakh rupees |
15 per cent |
|
16-20 lakh rupees |
20 per cent |
|
20- 24 lakh rupees |
25 per cent |
|
Above 24 lakh rupees |
30 per cent |
159.
To tax payers upto ` 12 lakh of normal income (other than
special rate income such as capital gains) tax rebate is being provided in
addition to the benefit due to slab rate reduction in such a manner that there
is no tax payable by them. The total tax benefit of slab rate changes and
rebate at different income levels can be illustrated with examples. A tax payer
in the new regime with an income of ` 12 lakh will
get a benefit of ` 80,000 in tax (which is 100% of tax
payable as per existing rates). A person having income of ` 18 lakh will
get a benefit of ` 70,000 in tax (30% of tax payable as per existing
rates).
A person with an income of ` 25 lakh gets a benefit of ` 1,10,000 (25%
of his tax payable as per existing rates).
160.
Details of my tax proposals are given in the Annexure.
161.
As a result of these proposals, revenue of about ₹ 1 lakh crore in
direct taxes and ₹ 2600 crore in indirect taxes will be forgone.
Mr. Speaker Sir, with this, I commend the budget to this august House.
Jai Hind.
Annexures to Part A
Annexure A
Building Rural Prosperity and Resilience
The programme will focus at:
1)
catalyzing
enterprise development, employment and financial independence for rural women;
2)
accelerating
creation of new employment and businesses for young farmers and rural youth;
3)
nurturing and
modernizing agriculture for productivity improvement and warehousing,
especially for marginal and small farmers; and
4)
diversifying
opportunities for landless families.
Annexure B
Mission for
Aatmanirbharta in Pulses
The Mission will place emphasis on:
1)
development and
commercial availability of climate resilient seeds,
2)
enhancing protein
content,
3)
increasing
productivity,
4)
improving
post-harvest storage and management, and
5)
assuring
remunerative prices to the farmers.
Annexure C
India Post as a Catalyst for the Rural
Economy
The expanded range of services will
include:
1)
rural community
hub colocation;
2)
institutional
account services;
3)
DBT, cash out and
EMI pick-up;
4)
credit services
to micro enterprises;
5)
insurance; and
6)
assisted digital
services.
Annexure D
Annexure E
Manufacturing Mission - Furthering
“Make in India
The Mission’s mandate will include 5
focus areas:
1)
ease and cost of
doing business;
2)
future ready workforce
for in-demand jobs;
3)
a vibrant and
dynamic MSME sector;
4)
availability of
technology; and
5)
quality products.
Annexure
to Part B
Amendments
relating to Indirect Taxes
|
A. LEGISLATIVE CHANGES IN CUSTOMS LAWS |
|
A.1 Amendments in the Customs Act, 1962 (i)
A new sub-section (1B)
is being inserted in Section 18 to provide time limit of two years for
finalization of provisional assessment. It also provides that this time limit
may be extended by the Commissioner of Customs for a further period of one
year if sufficient cause is shown. It further provides that, for the pending
cases, the time-limit shall be computed from the date of assent of the
Finance Bill, 2025. (ii)
A new sub-section (1C) is being inserted to
provide for certain grounds on which the time-limit of two years for
finalizing provisional assessment shall remain suspended. (iii)
A new section 18A is
being inserted for voluntary revision of entry after clearance of goods to
allow importers and exporters to revise any entry made in relation to the
goods within a prescribed time and subject to conditions as may be
prescribed. It also provides for treating such revised entry as
self-assessment and allow payment of duty or treat the revised entry as a
refund claim under section 27. It further provides for certain cases where
this section will not apply. (iv)
A new Explanation is being
inserted in sub-section 1 of section 27 to clarify that the period of
limitation for claim of refund consequent to the revised entry under section
18A or amendment under Section 149 of the Customs Act, 1962, shall be one
year from the date of payment of duty or interest. (v)
A new clause is being inserted in
Explanation 1 to Section 28 to provide that the relevant date in the case of
payment of duty as per the revised entry under section 18A is the date of
payment of duty or interest. (vi)
A new clause is being inserted after clause
(d) and (e) of section 127A to define Interim Board, Member of the Interim
Board and pending applications. (vii)
A new sub-section (6) is being inserted
after sub-section (5) in section 127B to provide end date for receipt of
applications under this section. (viii)
A new sub-section (12) is being inserted
after sub-section (11) in section 127C to make applicable the sub-sections of
Section 127C of the Customs Act, 1962 to the Interim Board. (ix)
A new sub-section (3) is being inserted
after sub-section (2) in section 127D clarifying that the powers of
Settlement Commission shall be exercised by the Interim Board and the
provisions of this section shall, mutatis mutandis, apply to the Interim
Board as they apply to the Settlement Commission. (x)
A new sub-section (5) is being inserted
after sub-section (4) of section 127F providing that the powers and functions
of Settlement Commission shall be exercised or performed by the Interim Board. (xi)
A Proviso to section 127G of the Customs
Act, 1962 is being inserted to provide that the powers and functions of
Settlement Commission under this section shall be exercised or performed by
the Interim Board. (xii)
A new sub-section (4) is being inserted
after sub-section (3) in section 127H of the Customs Act, 1962 to provide
that the powers and functions of Settlement Commission under this section
shall be exercised or performed by the Interim Board. These changes shall
come into effect from date of assent to the Finance Bill, 2025 A.2 Amendments in the
Customs Tariff Act, 1975 a) The First
Schedule to the Customs Tariff Act, 1975 is being amended to, -
(i)
revise tariff rates on certain industrial tariff items
(ii)
add 178 new tariff entries in chapter 10, 20, 27, 28, 29, 38 and 71
and substitute/delete 63 tariff entries; insert supplementary notes in
chapter 10, 20, 29 and 38 and amend 2 supplementary notes. This is to align
the tariff lines with WCO classification and better identification of goods. These changes shall
come into effect from 1.5.2025. |
|
B.
LEGISLATIVE CHANGES IN GST LAWS [Save as otherwise provided, these
changes will be brought into effect from a date to be notified in
coordination with States, as per recommendations of the GST council] |
|
AMENDMENT FOR TRADE FACILITATION B.1 Amendments in section 2 of the CGST Act, 2017:
a) Clause (61) is being amended to
explicitly provide for distribution of input tax credit by the Input Service Distributor
in respect of inter-state supplies on which tax has to be paid on reverse
charge basis, by inserting reference to sub-section (3) and sub-section (4)
of section 5 of Integrated Goods and Services Tax Act. This amendment will be
effective from 1st April, 2025. b) Clause (69) (c) is being amended to
insert an Explanation to provide for definitions of the terms 'Local Fund'
and 'Municipal Fund' used in the definition of "local authority"
under the said clause so as to clarify the scope of the said terms. c) A new clause (112A) is being inserted to
provide definition of Unique Identification Marking for implementation of
Track and Trace Mechanism B.2 Amendments in Section 12 and 13 of the CGST Act, 2017 Sub-section (4) of Section 12 and
Sub-section (4) of Section 13 relating to time of supply in respect of
vouchers are being omitted. B.3 Amendments in Section 17 of the CGST Act, 2017 Clause (d) of sub-section (5) is being
amended to substitute the words "plant or machinery" with the words
"plant and machinery" with effect from 1st July, 2017. B.4 Amendments in Section
20 of the CGST Act, 2017 Section 20(1) and Section 20(2) are
being amended to explicitly provide for distribution of input tax credit by
the Input Service Distributor in respect of inter-state supplies, on which
tax has to be paid on reverse charge basis, by inserting reference to
sub-section (3) and sub-section (4) of section 5 of Integrated Goods and
Services Tax Act in sub-section (1) of section 20. The amendment will be
effective from 1st April, 2025.
B.5
Amendments in Section 34 of the CGST Act, 2017 The Proviso to sub-section (2) is being
amended to explicitly provide for requirement of reversal of corresponding
input tax credit in respect of a credit-note, if availed, by the registered
recipient, for the purpose of reduction of tax liability of the supplier in
respect of the said credit note. B.6 Amendments in Section
38 of the CGST Act, 2017 a) Section 38(1) is being amended to omit
the expression "auto-generated". b) Section 38(2) is being amended to omit
the expression "auto-generated" and to insert the expression
"including" after the words "by the recipient" in clause
(b) to make the said clause more inclusive. c) Section 38(2) is also being amended to
insert a new clause (c) to provide an enabling clause to prescribe other
details to be made available in statement of input tax credit. B.7 Amendments in Section
39 of the CGST Act, 2017 Section 39(1) is being amended to
provide an enabling clause to prescribe certain conditions and restriction
for filing of return. B.8. Amendments in
Section 107 and 112 of the CGST Act, 2017 a) Section 107(6) is being amended to
provide for 10% mandatory pre-deposit of penalty amount for appeals before
Appellate Authority in cases involving only demand of penalty without any
demand for tax. b) Section 112(8) is amended to provide for
10% mandatory pre-deposit of penalty amount for appeals before Appellate
Tribunal in cases involving only demand of penalty without any demand for
tax. B.9 Insertion of a new
section 122B of the CGST Act, 2017 A new Section 122B is being inserted to
provide penalties for contraventions of provisions related to the Track and
Trace Mechanism provided under section 148A. B.10 Insertion of a new
section 148A of the CGST Act, 2017 Section 148A is being inserted to
provide for enabling mechanism for a Track and Trace Mechanism for specified
commodities.
B.11
Amendments in Schedule III of the CGST Act,2017 Schedule III is being amended, w.e.f. 01.7.2017 to,₋ a) insert
a new Entry (aa) in paragraph 8 to provide that the supply of goods
warehoused in a Special Economic Zone or in a Free Trade Warehousing Zone to
any person before clearance for exports or to the Domestic Tariff Area shall
be treated neither as supply of goods nor as supply of services. b)
Amend
Explanation 2, w.e.f. 01.07.2017 to clarify that the said explanation would
be applicable in respect of entry (a) of paragraph 8. c) Insert
Explanation 3 to define the terms 'Special Economic Zone', 'Free Trade
Warehousing Zone' and 'Domestic Tariff Area', for the purpose of the proposed
entry (aa) in paragraph 8. d) To provide that no refund of tax already
paid will be available for the transactions referred above. |
|
C.1 Special Provision for Exemption from Service Tax in Certain Cases: Services provided or agreed to be
provided by insurance companies by way of reinsurance services under the
Weather Based Crop Insurance Scheme (WBCIS) and the Modified National
Agricultural Insurance Scheme (MNAIS), are being exempted from service tax for the period
commencing from 1st April, 2011 and ending with 30th
June, 2017. |
D. CUSTOMS
DUTY RATE CHANGES
D.1. Reduction
in customs duty to reduce input costs, deepen value addition, promote export
competitiveness, correct inverted duty structure, boost domestic manufacturing
etc [with effect from 2.2.2025]
|
S. No. |
Commodity |
From (per cent) |
To (per cent) |
|
I. |
Aquafarming & Marine exports |
||
|
1. |
Frozen fish paste (surimi) for manufacture of surimi analogue products
for export |
30 |
5 |
|
2. |
Fish hydrolysate for manufacture of aquatic feed |
15 |
5 |
|
II. |
Chemicals |
||
|
1. |
Other compounds containing a pyrimidine ring
(whether or not hydrogenated) or piperazine ring in the structure classified
under tariff sub heading 2933 59 |
10 |
7.5 |
|
2. |
Synthetic flavouring essences and mixtures
of odoriferous substances of a kind used in food or drink industries
classified under tariff sub heading 3302 10 |
100 |
20 |
|
3. |
Sorbitol classified
under tariff subheading 3824 60 |
30 |
20 |
|
III. |
Waste and Scrap of Critical
Minerals and others |
||
|
1. |
Waste and scrap of
Antimony, Beryllium, Bismuth, Cobalt, Cadmium, Molybdenum, Rhenium, Tantalum,
Tin, Tungsten, Zirconium, Copper scrap covered under tariff items 74040012,
74040019 and 74040022 |
10/5/2.5 |
Nil |
|
2. |
Waste and scrap of
Lithium-Ion Battery |
5 |
Nil |
|
3. |
Cobalt powder |
5 |
Nil |
|
4. |
Waste and scrap of Lead |
5 |
Nil |
|
5. |
Waste and scrap Zinc |
5 |
Nil |
|
IV. |
Drugs and
Medicines |
||
|
1. |
Addition of 6 more
medicines in List 3 and bulk drugs for their manufacture |
As applicable |
5 |
|
2. |
Addition of 36 more medicines
in List 4 and bulk drugs for their manufacture |
As applicable |
Nil |
|
3. |
Addition of 37 more
medicines and 13 Patient Assistance Programmes in the list of duty free
imports by pharmaceutical companies for supply free of cost to patients |
As applicable |
Nil |
|
V. |
Precious Metals |
||
|
1. |
Platinum findings |
25 |
6.4 (5 BCD + 1.4 AIDC) |
|
VI. |
Textile, Handicraft and Leather Sector |
||
|
1. |
Wet blue leather |
10 |
Nil |
|
2. |
Shuttle less loom
Rapier Looms (below 650 meters per minute) and Shuttle less loom Air jet
Looms (below 1000 meters per minute) for use in textile industry |
7.5 |
Nil |
|
3. |
Certain additional
items for duty free import by bonafide exporters for manufacture of
handicrafts |
As applicable |
Nil |
|
VII. |
Capital Goods |
||
|
1. |
Addition of 35
capital goods/machinery for use in the manufacture of lithium-ion battery of
EVs and 28 capital goods/machinery for use in the manufacture of lithium-ion battery
of mobile phones |
As applicable |
Nil |
|
VIII. |
IT and Electronics |
||
|
1. |
Inputs/ parts and
sub-parts of PCBA, camera module, connectors and inputs or raw materials for
use in manufacture of wired headset, microphone and receiver, USB cable,
fingerprint reader/ sensor of cellular mobile phone |
2.5 |
Nil |
|
2. |
Specified inputs/parts
(chip on film, PCBA, glass board / substrate cell) for use in manufacture of
open cells of TV panels of LED/LCD TV |
2.5 |
Nil |
|
3. |
Ethernet Switches
Carrier-Grade |
20 |
10 |
|
4. |
Open cell (with or
without touch) for interactive Flat Panel Display module, Touch Glass sheet
and Touch Sensor PCB for use in manufacture of Interactive Flat Panel Display
module |
15/10 |
5 |
|
IX. |
Space Sector |
||
|
1. |
Ground installation
for satellites including its spares and consumables |
As applicable |
Nil |
|
2. |
Goods used in the
building of launch vehicles and launching of satellites |
5 |
Nil |
|
X. |
Motorcycles |
||
|
1. |
(i)
Engine capacity not exceeding 1600 CC (CBU) (ii)
Semi-knocked down (SKD) (iii)
Completely knocked down (CKD) |
50 25 15 |
40 20 10 |
|
2 |
(i)
Engine capacity 1600 CC &
above (CBU) (ii)
Semi-knocked down (SKD) (iii)
Completely knocked down (CKD) |
50 25 15 |
30 20 10 |
D.2. Increase
in Customs duty [with effect from 02.02.2025]
|
S. No. |
Commodity
|
Rate of duties |
|
|
From (per cent) |
To (per cent) |
||
|
I. |
Textiles |
||
|
1. |
Knitted Fabrics
covered under tariff items 6004 10 00, 6004 90 00, 6006 22 00, 6006 31 00,
6006 32 00, 6006 33 00, 6006 34 00, 6006 42 00 and 6006 90 00 |
10/20 |
20 or Rs 115 per kg, whichever is higher |
|
II |
Electronics |
||
|
1 |
Interactive Flat
Panel Display classified under tariff item 8528 59 00 (CBU) |
10 |
20 |
D.3. Decrease in Tariff
rate with no change in Effective rate [With effect from 02.02.2025]
|
S. No. |
Commodity |
Rate of duties |
|
|
From (per cent) |
To (per cent) |
||
|
1. |
Glycerol
crude, glycerol waters, glycerol lye covered by tariff item 1520 00 00 |
30
|
20
|
|
2. |
Phosphoric
Acid |
20 |
7.5 |
|
3. |
Other
– Prepared Binders, chemical products and preparations of chemical or allied
industries covered under tariff item 3824 99 00 |
17.5 |
7.5 |
|
4. |
Marble
and travertine, granite, crude or roughly trimmed, merely cut into blocks,
slabs and other (tariff sub heading 2515 12 and tariff items, 2525 11 00,
2516 11 00, 2516 12 00) |
40
|
20 (+20 AIDC) |
|
5. |
Candles,
tapers and the like covered by tariff heading 3406 |
25 (+2.5 SWS) |
20 (+7.5 AIDC) |
|
6. |
Other
reference materials |
30 |
10 |
|
7. |
PVC
flex films including PVC flex banner and PVC flex sheets (tariff headings
3920, 3921) |
25 (+2.5 SWS) |
20 (+7.5 AIDC) |
|
8. |
Footwear
covered under tariff headings 6401 to 6405 |
35 (+3.5 SWS) |
20 (+18.5 AIDC) |
|
9. |
Worked
monumental or building stone and articles thereof under heading 6802 except
6802 99 00 |
40 |
20
|
|
10 |
Marble
slabs classified under tariff items 6802 10 00 , 6802 21 10 , 6802 21 20 ,
6802 21 90 , 6802 91 00 and 6802 92 00 |
40 |
20 (+20 AIDC) |
|
11. |
OTS/MR type-flat
rolled products of thickness less than 0.5 mm |
27.5 |
15 |
|
12. |
Other plates,
sheets, strips of thickness less than 0.5mm |
27.5 |
15 |
|
13. |
Flat -rolled products
in coils of thickness greater than or equal to 4.75 mm but not exceeding
10mm |
22.5 |
15 |
|
14. |
Flat-rolled
products in coils of thickness greater than or equal to 3 mm but less than
4.75 mm |
22.5 |
15 |
|
15. |
Flat-rolled
products of stainless steel of width 600mm or more- Other nickel chrome
austenitic type |
22.5 |
15 |
|
16. |
Flat-rolled
products of stainless steel of width 600mm or more- Other sheets and plates |
22.5 |
15 |
|
17. |
Flat-rolled
products of other alloy steel grain oriented |
20 |
15 |
|
18. |
Other tubes or pipe fittings of stainless steel |
25 |
15 |
|
19. |
Other
fittings of iron or steel, non-galvanised |
25 |
15 |
|
20. |
Other
structure and parts of structures of iron and steel |
25 |
15 |
|
21. |
Others-tanks
and drums etc. |
25 |
15 |
|
22. |
Other
screws and bolts w/n with nuts |
25 |
15 |
|
23. |
Threaded
nuts |
25 |
15 |
|
24. |
Other
non-threaded articles |
25 |
15 |
|
25. |
Others springs and leaves of iron/steel |
25 |
15 |
|
26. |
Other
cast articles of iron or steel |
25 |
15 |
|
27. |
Articles
of forged or stamped but not further worked |
25 |
15 |
|
28. |
All
other articles of iron/steel |
25 |
15 |
|
29. |
Solar
cells covered by tariff heading 8541 |
25 (+2.5 SWS) |
20 (+7.5 AIDC) |
|
30. |
Motor
cars and other motor vehicles principally designed for the transport of
persons, including station wagons and racing cars, under tariff heading 8703
>USD 40000 |
125
(tariff rate)
100 BCD + 10 SWS (effective rate) |
70 (tariff rate)
70+ 40 AIDC (effective rate) |
|
31. |
Used
Motor cars and other motor vehicles principally designed for the transport
of persons, including station wagons and racing cars, under tariff heading
8703 |
125 (tariff)
125 BCD + 12.5 SWS (effective rate) |
70 (tariff)
70+ 67.5 AIDC (effective rate) |
|
32. |
Motorcycles
(including mopeds) and cycles fitted with an auxiliary motor, with or
without side-cars under tariff heading 8711 |
100 (tariff) (No change in effective rate) |
70(tariff) (No change in effective rate) |
|
33. |
Used
Motorcycles (including mopeds) and cycles fitted with an auxiliary motor,
with or without side-cars under tariff heading 8711 |
100 (tariff)
100 BCD +10 SWS (effective rate) |
70 (tariff)
70+ 40 AIDC (effective rate) |
|
34. |
Bicycles
under tariff item 8712 00 10 |
35 |
20 (+15 AIDC) |
|
35. |
Yachts
and other vessels for pleasure or sports; rowing boats and canoes covered
under tariff heading 8903 |
25 (+2.5 SWS) |
20 (+7.5 AIDC) |
|
36 |
Electricity
meters for alternating current (Smart Meters) under tariff item 9028 30 10 |
25 (+2.5 SWS) |
20 (+7.5 AIDC) |
|
37 |
Parts
of electronic toys, under tariff item 9503 00 91 for manufacture of
electronic toys |
25 BCD + 2.5 SWS |
20 BCD+
7.5 AIDC |
D.4. Decrease in Tariff rate with reduction in
effective rate [With effect from 02.02.2025]
|
|
Commodity |
Rate of duties |
|
|
From (per cent) |
To (per cent) |
||
|
1. |
Synthetic
flavouring essences and mixtures of odoriferous substances for use in food
and drink industry |
100
|
20 (+2 SWS) |
|
2. |
Sorbitol
under tariff sub-heading 3824 60 |
30 (+3 SWS) |
20 (+2 SWS) |
|
3. |
Articles
of jewellery and parts thereof under tariff heading 7113; articles of
goldsmiths’ or silversmiths’ wares and parts thereof under tariff heading
7114 |
25
|
20
|
|
4. |
Solar
module under tariff heading 8541 |
40 (+4 SWS) |
20 (+20 AIDC) |
|
5. |
Motor
vehicles (for passenger) covered under tariff heading 8702 |
40 (+4 SWS) |
20 (+20 AIDC) |
|
6. |
Motor
vehicles (for goods) covered under tariff heading 8704 |
40 (+4 SWS) |
20 (+20 AIDC) |
|
7. |
Seats
(other than those of heading 9402), whether or not convertible into beds,
and parts thereof, covered under tariff heading 9401 |
25 (+2.5 SWS) |
20 (+5 AIDC) |
|
8. |
Other
furniture and parts thereof covered under tariff heading 9403 |
25 (+2.5 SWS) |
20 (+5 AIDC) |
|
9. |
Mattress
supports, articles of bedding and similar furnishing etc covered under
tariff heading 9405 |
25 (+2.5 SWS) |
20 (+5 AIDC) |
|
10. |
Luminaries
and light fittings including
searchlights and spotlights and parts thereof etc |
25 (+2.5 SWS) |
20 (+5 AIDC) |
|
11. |
Parts
of electronic toys, under tariff item 9503 00 91 |
70
|
20 (+20 AIDC) |
|
12. |
Laboratory
chemicals under tariff item 9802 00 00 (other than those attracting 10% BCD
on specified end use) |
150 (+ 15 SWS)
|
70 (+ 70 AIDC) |
|
13. |
All
dutiable articles, imported by a passenger or a member of a crew in his
baggage, under tariff heading 9803 |
100 (tariff rate)
35+ 3.5 SWS (effective rate) |
70 (tariff rate)
35 (effective rate) |
|
14. |
Dutiable
goods imported for personal use classified under heading 9804 other than
those at 10% BCD |
35 (+ 3.5 SWS) |
20
|
E. Export duty on Leather
[with effect from 2.2.2025]
|
S. No. |
Commodity
|
Rate of duties |
|
|
From (per cent) |
To (per cent) |
||
|
1 |
Crust Leather (hides and skins) |
20 |
0 |
F. Trade Facilitation
Measures
|
F.1. Increase in
duration for export of handicrafts The duration for export of handicrafts
manufactured from duty free inputs by bonafide exporters is being increased
from 6 months to 1 year, further extendable by 3 months. F.2. Removal of Customs (Import
of Goods at Concessional rate of duty or For Specific End Use) Rules 2022 (IGCR)
condition for import of seeds for use in manufacture of Lab Grown Diamonds The IGCR condition for custom duty
exemption on import of seeds for use in manufacture of rough Lab Grown Diamond
is being
removed. F.3. Extension of time
limit for export The time limit for
export of foreign origin goods imported for repairs is being extended from 6
months to one year further extendable by one year for railway goods. F.4. Amendment of Customs (Import of Goods at Concessional
Rate of Duty or For Specified End Use
) Rules, 2022 Rules 6 and 7 are
being amended to increase the time limit for fulfilling end use from current
six months to one year and to file only a quarterly statement instead of
monthly statement. |
Note: AIDC –
Agriculture Infrastructure and Development Cess; SWS – Social Welfare Surcharge
G. OTHERS
There
are few other changes of minor nature. For details of the budget proposals, the
Explanatory Memorandum and other relevant budget documents may be referred to.
Annexure to Part B
Amendments relating to Direct Taxes
|
(i) Personal Income-tax reforms with special focus
on middle class |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
1. Substantial relief is proposed under the new tax
regime with new slabs and tax rates as under: -
2. Rebate on income-tax ·
Resident individual
with total income up to ` 7,00,000 do not pay any tax due to rebate under the
new tax regime. It is proposed to increase the rebate for the resident
individual under the new regime so that they do not pay tax if their total
income is up to ` 12,00,000.
Marginal relief as provided earlier under the new tax regime is also
applicable for income marginally higher than ` 12,00,000. ·
A few examples for
calculation of tax benefit are given in the table below:
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
(ii) Rationalization of TDS/TCS for easing
difficulties |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
1. Rationalization tax deducted at source (TDS) and
tax collected at source (TCS) rates: · To reduce multiplicity of
rates and compliance burden, it is proposed to bring down certain TDS and TCS
rates in certain sections as below:
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
·
It is further proposed
to increase certain thresholds for requirement to deduct tax at source or
collect tax at source under certain sections, as below:
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
(iii) Encouraging voluntary compliance |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
1. Extending the time-limit to file the updated return: ·
It is proposed to
extend the time-limit to file the updated return from the existing 24 months
to 48 months from the end of the relevant assessment year. The additional tax
payable shall be 60% of the aggregate of tax and interest payable on
additional income for filing updated return during the period of 24 months to
36 months from the end of relevant assessment year. Additional tax payable
shall be 70% of the aggregate of tax and interest payable for filing updated
return during the period of 36 months to 48 months from the end of relevant
assessment year subject to certain conditions. 2. Obligation to furnish
information in respect of crypto-asset: · It is
proposed to bring amendment in the Act to provide for that a prescribed
reporting entity in respect of a crypto-asset shall furnish information in
respect of a transaction in such crypto asset, in a statement as prescribed.
It is also proposed to align the definition of virtual digital asset
accordingly. 3. Annual value of the
self-occupied property simplified: · It is proposed to provide that the annual value of
the property consisting of a house or any part thereof shall be taken as nil,
if the owner occupies it for his own residence or cannot actually occupy it
due to any reason. |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
(iv) Reducing compliance burden |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
1. Reduction in
compliance burden by omission of TCS on sale of specified goods: ·
To reduce compliance
burden of the taxpayers, it is proposed to no tax will be collected at source
on sale of specified goods of value of more than fifty lakhs. 2. Removal of higher TDS/TCS for non-filers of
return of income: ·
To reduce compliance
burden on the deductor/collector, it is proposed to omit section 206AB and
section 206CCA of the Act. 3. Definition of “forest produce”
rationalized: ·
It is proposed to
clarify the meaning of “forest produce” u/s 206C(1) of the Act to remove any
ambiguity regarding definition of the same. ·
It is also proposed
that TCS be collected only on “any other forest produce which is obtained
under a forest lease.” |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
(v) Ease of doing business |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
1. Extension of time limit u/s 80-IAC for startups: · It is proposed to extend
the benefit provided under Section 80-IAC to startups for another period of
five years, i.e. the benefit will be available to eligible start-ups
incorporated before 01.04.2030.
2. Parity in rates of long term capital gain on transfer of securities by
non-resident: · It is proposed to bring
parity between the taxation of capital gains on transfer of capital assets
between residents and non-residents being Foreign Institutional investors, on
their income by way of long-term capital gains on transfer of securities.
3. Simplification of tax
provisions for charitable trusts/institutions: · It is proposed to increase
the period of validity of registration of trust or institution from 5 years
to 10 years for smaller trusts or institutions. · It is proposed to
rationalize the definition of specified violation for cancellation of
registration of trust or institution so as to not apply the same for minor
default such as in-complete applications. · It is also proposed to
rationalize the definition of persons making substantial contribution to a
trust or institution for denial of exemption. 4. Rationalization in taxation of business trusts: · It is proposed to provide
that the total income of a business trust which is charged to tax at the
maximum marginal rate, shall be subject to the provisions of section 112A of
the Act as well, as it is subject to provisions of section 111A and section
112 of the Act. 5. Harmonization of Significant Economic Presence applicability with
business connection: · It is proposed to provide
that significant economic presence of a non-resident in India shall not
include the transactions or activities which are confined to the purchase of
goods in India for the purpose of export. 6. Bringing clarity in income on redemption of Unit Linked Insurance
Policy: · It is proposed to clarify
that the profit and gains from the redemption of unit linked insurance
policies to which exemption under section 10(10D) does not apply, shall be
charged to tax as capital gains. 7. Amendment of
definition of ‘capital asset’: · In order to bring clarity
on the chargeability of income arising out of transfer of capital asset being
securities held by an investment fund as referred to in section 115UB of the
Act, the definition of capital asset is proposed to be amended. 8. Rationalization of transfer pricing provisions
for carrying out multi-year arm’s length price determination ·
It is proposed to
provide that the transfer pricing provisions for arm’s length price
determination in relation to similar transactions shall now be applicable for
a period of 3 years. 9. Exemption from prosecution for delayed
payment of TCS: ·
It is proposed to provide for exemption from prosecution to a person
who has failed to pay tax collected at source (TCS) to the credit of the
Central Government, if such payment is made at any time on or before the time
prescribed for filing the quarterly TCS statement. 10. Amendment of
definition of ‘capital asset’: · In order to bring clarity
on the chargeability of income arising out of transfer of capital asset being
securities held by an investment fund as referred to in section 115UB of the
Act, the definition of capital asset is proposed to be amended. |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
(vi) Employment and Investment |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
1. Incentives to IFSC ·
It is proposed that the
sunset dates related to IFSC units for exemptions, deductions and relocation
in various sections shall be extended to 31st March, 2030. ·
It is proposed to
exempt the proceeds received on life insurance policy issued by IFSC
insurance intermediary office without the condition on maximum premium
amount. ·
It is proposed to
extend the exemption in section 10(4H) to capital gains for non-resident or a
unit of IFSC on transfer of equity shares of a ship leasing domestic company. ·
It is proposed to
extend the exemption in section 10(34B) to dividend paid by a ship leasing
company in IFSC to a unit of IFSC engaged in ship leasing. ·
It is proposed that any
advance or loan between two group entities, where one of the group entities
is set up in IFSC for undertaking treasury activities or treasury services,
shall be excluded from dividend. ·
It is proposed to
provide a simplified safe harbor regime for investment funds managed by fund
manager based in IFSC. It is further proposed to extend the relaxation of
conditions for IFSC units till 31st March, 2030. ·
It is proposed to provide exemption to any
income accruing or arising to or received by a non-resident as a result of
transfer of non-deliverable forward contracts entered into with any Foreign
Portfolio Investor, being a unit in an International Financial Services
Centre, which fulfills prescribed conditions. ·
It is proposed that transfer of a share or
unit or interest held by a shareholder in an original fund (being a retail
scheme or exchange traded fund regulated under IFSCA Regulations 2022) in
consideration for the share or unit or interest in a resultant fund in a
relocation, shall not be regarded as transfer for the purpose of calculating
capital gains. 2. Extension of
date of making investment by Sovereign Wealth Funds, Pension Funds and
others: · It is proposed
that in the case of person specified under section 10(23FE) the date of
making investment shall be extended from 31st day of March, 2025 to 31st day
of March, 2030. · It is further
proposed that in the case of such specified person exemption shall be
available to long-term capital gains under said section, even if such capital
gains are deemed as short-term capital gains under section 50AA. 3. Scheme of presumptive taxation extended
for non-resident providing services for electronics manufacturing facility: ·
It is proposed to provide a presumptive
taxation regime for non-residents, engaged in the business of establishing or
operating electronics manufacturing facility or a connected facility for
manufacturing or production of electronic goods, article or thing in India. 4. Extension of Tonnage Tax Scheme to Inland vessels: · It is proposed
that the benefits of existing tonnage tax scheme to be extended to inland
vessels registered under the Indian Vessels Act, 2021 to promote Inland Water
Transportation in the country.
5. Deduction
u/s 80CCD for contributions made to the NPS Vatsalya: ·
It is proposed to
extend the tax benefits available to the National Pension Scheme (NPS) under
sub-section (1B) of section 80CCD of the Income-tax Act, 1961 to the
contributions made to the NPS Vatsalya accounts, as applicable.
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
(vii) Other miscellaneous amendments |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
1. Exemption from withdrawals from National Savings
Scheme (NSS): · It is proposed to provide
exemption to the withdrawals made from National Savings Scheme (NSS) on or
after the 29th day of August, 2024, for any amount deposited under the scheme
and the interest accrued thereon in respect of which a deduction has been allowed.
2. Increase in the limits on the income of the employees for the purpose
of calculating perquisites: · The provisions of Section
17 are proposed to be amended so that the power to prescribe rules may be
obtained to increase these limits. 3. Extension of exemption to Specified Undertaking of Unit Trust of
India (SUUTI) ·
It is proposed to
extend the exemption of SUUTI created by the Unit Trust of India (Transfer of
Undertaking and Repeal) Act, 2002, to 31st March, 2027. 4. Non applicability of Section 271AAB of
the Act: ·
It is proposed that
provisions of the aforesaid section shall not be applicable to a case where
search has been initiated under section 132 on or after the 1st
day of September, 2024. 5. Certain penalties to be imposed by the Assessing Officer: ·
It is proposed to amend
various sections related to penalty to provide that penalties under these
sections shall be levied by the Assessing Officer, subject to the provisions
of the Act relating to prior approval of Joint Commissioner of Income-tax. 6. Removing date restrictions on framing the schemes in certain cases: · It is proposed that the end date prescribed for
notifying faceless schemes under certain sections may be omitted so as to provide that
Central Government may issue directions beyond the cut-off date of 31st
day of March, 2025. 7. Extending the processing period of Application
seeking immunity from penalty and prosecution: ·
It is proposed that
Assessing Officer shall pass an order accepting or rejecting the application
requesting immunity from penalty and prosecution, within a period of three
months from the end of the month in which such application is received. 8. Increasing time
limit available to pass order under section 115VP: ·
It is proposed to amend section 115VP to
provide that the order, accepting or rejecting, assessee’s option to opt for
tonnage tax scheme shall be passed before the expiry of three months from the
end of the quarter in which such application was received. 9. Excluding the
period such as court stay etc. for calculating time limit to pass an order: ·
It is proposed to exclude certain time
period such as period of stay on proceedings by any court order, etc. from
the time limit to pass an order deeming a person to be an assessee in default
with respect of failure to collect TCS. 10. Time limit to impose penalties rationalized: ·
It is proposed that any
order imposing a penalty shall not be passed after the expiry of six months
from the end of the quarter in which the connected proceedings are completed,
or the order of appeal is received. 11. Clarification regarding commencement date and
the end date of the period stayed by the Court: · It is proposed to amend the relevant sections of the
Act to clarify the commencement date and the end date of the period stayed by
an order or injunction of any court. 12. Time limit for retention of seized books of account or other
documents rationalized: · It is proposed make amendments to provide that retention of seized books of account or
other documents shall be one month from the end of the quarter in which the
assessment or reassessment or recomputation order has been made. 13. Rationalisation of provisions related to carry
forward of losses in case of amalgamation ·
It is proposed to amend section 72A and
section 72AA of the Act to provide that any loss forming part of the
accumulated loss of the predecessor entity, shall be carried forward for not
more than eight assessment years immediately succeeding the assessment year
for which such loss was first computed for original predecessor entity. 14. Amendments proposed in
provisions of Block assessment for search and requisition cases under Chapter
XIV-B ·
It is proposed to add
the term “virtual digital asset” to the said definition of undisclosed income
of the block period. The time-limit for completion of block assessment is
proposed to be made as twelve months from end of the quarter in which the
last of the authorisations for search or requisition has been executed. |
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COMMENTS