Budget 2025: Income Tax, MSME & New Tax Regime Changes

Budget 2025: Income Tax, MSME & New Tax Regime Changes

Union Budget 2025 shall be presented before the Parliament on 1 February 2025 by Nirmala Sitharaman. Most experts and taxpayers are quite hopeful for major income tax changes. Some of those expectations include the modification of income slabs in the new tax regime, extra benefits in the old tax regime, and an increase in exempted income or deductions. 

Also on the common man's wish list for the budget 2025 is the introduction of a voluntary deduction against NPS contributions, as well as any increase of deductions available for health and life insurance premiums paid.

Budget 2025-capital-markets

• According to the report, PLIs should be introduced for key sectors such as textiles, garments handicrafts, food processing, leather, electronics, and auto components for MSME operations in coming money-budget.

• Furthermore, an increase in allocation to the Credit Guarantee Fund Trust, Micro and Small Enterprises (CGTMSE) seems to have been advised, with simultaneous incentivization being sought for banks so as to enlarge coverage for MSME loans in the budget markets.

• In agriculture, the report suggested the establishment of an omnibus Credit Guarantee Fund Trust for Agri & Allied Sectors (CGFTAAS) that would serve as a credit accelerator by providing coverage for new agricultural loans, including Agri Value Chain Financing (AVCF) in Union Budget 2025.

• However, given the stupendous scam that has been going on with respect to deepfakes, massive threats related to exploited vulnerabilities, such as malicious links or leaking of sensitive information, have made companies once again anxious about whether things are really what they seem. 

• Investment in technologies that can detect threats along with the promotion of good digital behavior, in addition to encouraging innovative solutions to enhance cyber resilience, greatly serves to complement the journey of transformation of the nation.

• Cybersecurity would not be the top priority for many organizations now as resources skilled in cybersecurity are lacking in number. Thus, investment should also go into educating cybersecurity in colleges while also providing the workforce with continuous training opportunities to keep the industry well-versed in all applicable threats and their responses.

What changes do taxpayers hope this budget will bring about?

The Income Tax Union Budget is expected to extend some reliefs to standard salaries by lowering standard deductions. The income tax budget 2024 has proposed a modification that increases the standard deduction under the new income tax regime from Rs.50,000 to 75,000.

Experts’ Opinion

(Source: TOI)

Conclusion

Tax reliefs, increased deductions, and more support for MSMEs and agriculture will be extended under these provisions by the Union Budget 2025. Furthermore, a big hand in strengthening the cyber world and innovations can boost the country in considerable ways. Taxpayers keep a hope for a favorable budget. Final announcements on February 1 will explain what the government intends to satisfy and prioritize.

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