Budget 2025 Expectations Highlights: Will FM Nirmala Sitharaman lower income tax rates to boost consumption, GDP growth?

“We expect the Union Budget 2025-2026 to address key legal and financial challenges to enhance ease of doing business and promote economic growth. Strengthening judicial infrastructure, incentivizing alternative dispute resolution mechanisms, and introducing technology-driven reforms in courts could significantly improve access to justice. On the financial front, simplification of tax structures, rationalization of GST rates, and enhanced clarity in compliance requirements for professionals, startups, and MSMEs would bolster confidence in India’s legal and economic framework. Greater alignment between legal and financial policies will be crucial to sustaining investor trust and fostering innovation,” says Dinesh Jotwani, Co-Managing Partner, Jotwani Associates.

"As we look forward to 2025, technology development will play a pivotal role in accelerating the growth of the electric vehicle (EV) ecosystem in India. Innovations in battery technology, charging infrastructure, and smart mobility solutions are essential to overcoming existing challenges and enhancing the overall EV experience. By leveraging cutting-edge technologies such as AI and IoT, we can optimize charging networks and improve battery efficiency, ultimately making electric vehicles more accessible and reliable for consumers.

We hope that the upcoming budget will prioritize investments in technology-driven initiatives that support startups and established players alike in their quest to innovate within the EV space. This focus on technological advancement is crucial for positioning India as a global leader in sustainable mobility. Additionally, we urge the government to reduce the current GST rate of 18% on EV charging services and lithium-ion batteries to 5%. Lowering these taxes would make EV adoption more affordable and drive higher demand for electric vehicles, aligning with our vision for a greener and more sustainable future." says Raghav Arora, Co-Founder & CTO, Statiq.

"The government will have its task cut out setting budgetary expectations amidst concerns over lagging growth, with full-year FY25 GDP growth expected to settle at 6.4%, a four-year low. The RBI revised its inflation forecast for FY25 to 4.8% from 4.5%, reflecting challenges from mixed domestic demand, struggling urban pockets, global turmoil, INR depreciation, and weak exports. How policy balancing is approached, given the current growth-inflation dynamics, will be crucial.
A continued emphasis on fiscal prudence is expected, with the government committed to maintaining a sub-4.5% fiscal deficit target for FY26. Public capex, infrastructure development, and employment creation are likely to remain priorities, reflecting sustained improvements in spending quality. However, nominal GDP projections remain subdued. While direct tax collections may witness healthy growth, indirect tax collections could be impacted by a global tariff war. A significant overhaul of direct taxes or material relief on personal income tax is not anticipated, though boosting consumption may feature in broader reforms.

The extent of fiscal space from the RBI’s dividend payout remains uncertain. Estimates suggest the government may undershoot the current fiscal’s capex target by INR 1 trillion. For FY25, capex growth of 10%-12% is anticipated, alongside continued PLI-linked incentives to support manufacturing. Addressing the distorted demand outlook and lagging private capex will be critical,” says Pradeep Gupta, Executive Director and India Head of Investment at Lighthouse Canton.

“The agriculture sector in India faced several challenges in 2024, from unpredictable weather patterns and supply chain disruptions to growing sustainability pressures. However, there has also been significant progress, particularly in agri-tech innovations and the government’s commitment to farmer welfare. Looking ahead to Budget 2025, there’s a valuable opportunity to build on this momentum.

For the agrochemical sector, the focus should be on incentivising research into eco-friendly and latest new age solutions and PLI. Supporting small-scale farmers with better access to technologies and crop protection solutions will be crucial to increasing yields and reducing losses.

I am hopeful that the Budget will prioritise improving infrastructure to support rural communities. Expanding access to digital tools and technologies will empower farmers to make data-driven decisions, enhancing productivity and food security. Additionally, increased budget allocation for R&D will drive the development of novel products and solutions, enabling organizations to better meet the evolving needs of the sector.” says Rajesh Aggarwal, Managing Director, Insecticides (India) Ltd.

"As we approach the announcement of the 2025-26 budget, India stands at a critical juncture where energy security and environmental health intersect. The budget presents an opportunity for the government to address pressing issues of pollution and dependency on fossil fuels. With approximately 33 crore vehicles contributing to air pollution, it is imperative to find a sustainable solution. Auto LPG emerges as a pragmatic alternative, significantly reducing emissions of particulates (PM), carbon monoxide (CO), nitrogen oxides (NOx), and hydrocarbons (HC), while also aligning with global efforts to combat climate change.

We urge the government to prioritize Auto LPG in the upcoming budget. Reducing the GST on Auto LPG from the current 18% to 5% will level the playing field and make it more competitively priced, fostering greater adoption. Encouraging Original Equipment Manufacturers (OEMs) to produce more LPG variants through consistent incentives will expand choices for consumers and enhance public mobility fuel options. By investing in Auto LPG infrastructure, we can ensure a cleaner, greener future for India, addressing both energy security and pollution challenges head-on. Together, we can make significant strides towards a healthier and more sustainable India." says Suyash Gupta, Director General, Indian Auto LPG Coalition.

"Over the last few years, there has been an increased commitment from the Indian government towards healthcare through initiatives like Ayushman Bharat, Pradhan Mantri Suraksha Bima Yojana, Mission Parivar Vikas, and Pradhan Mantri Surakshit Matritva Abhiyan. While these initiatives have significantly advanced many areas of healthcare, the fertility space requires a higher impetus. Fertility treatments such as IVF are still not covered under Ayushman Bharat or other key health schemes, limiting accessibility for many who need it.

"As we await Budget 2025, it is crucial for the government to focus on further enhancing the inclusivity of the healthcare system, particularly for fertility-related treatments. We recommend the inclusion of fertility treatments under the Ayushman Bharat scheme to improve access for economically disadvantaged groups. Additionally, the government should consider tax incentives for fertility treatments and extend their coverage in health insurance policies. We also propose the establishment of a national fertility register to track success rates and outcomes, enabling policy adjustments based on this data,” says Abhishek Aggrawal, Chief Executive Officer, Birla Fertility and IVF.

A report by the State Bank of India (SBI) has highlighted the need for reforms in the insurance and healthcare sectors. It suggested key measures such as exempting GST and taxes on term and health insurance premiums, increasing the healthcare budget to 5 per cent of GDP, and rationalising GST rates on medical devices to a standard 5–12 per cent range.

The report recommends,"No GST/Tax on Term/Pure Life Insurance and health insurance premiums. In line with NPS, a separate deduction for life/health insurance in the new/old tax regime, say Rs 25,000/50,000. All the government-sponsored pension schemes, APY, PM-SYM, PM-KMY, and NPS-Traders may be brought under one umbrella."

It also raises concerns about the falling insurance penetration in India, which dipped to 3.7 per cent in FY24, down from 4 per cent in FY23 and 4.2 per cent in FY22. Life insurance penetration has seen a sharper drop to 2.8 per cent, while non-life insurance has stagnated at 1 per cent.

With IRDAI’s goal of achieving "Insurance for All by 2047," the report stresses the importance of urgent action. It highlights that waiving GST and taxes on insurance premiums could incentivise more people to opt for these critical covers, contributing to increased penetration in the sector.

"The 2025 budget will play a key role in making the electric vehicle (EV) sector more affordable and accessible to consumers. The EV industry anticipates significant initiatives from the government to support its growth towards sustainable mobility. Measures such as reducing the GST on EV batteries, upgrading the infrastructure status for charging stations, and implementing performance-linked incentives for manufacturing are essential. These steps would make the EV market more affordable and accessible to a broader audience.

While EVs enjoy a 5% GST, lithium-ion batteries and charging services are subjected to an 18% GST. We urge the government to reduce this GST rate to 5% for both charging services and lithium-ion batteries. Additionally, there is an urgent need to focus on the domestic production of key EV components, rather than relying on imports. Promoting Atmanirbhar Bharat by introducing special Production Linked Incentives (PLI) and incentives for manufacturing EV components will boost production, reduce the cost of EV vehicles, and make them more affordable for Indian consumers. Such measures will not only advance the EV sector but also position India as a leader in sustainable mobility." said Ishaan Parwanda, Director, Trinity Touch.

"As 2025 budget is approaching, the growth trajectory of the electric vehicle (EV) industry in India presents a tremendous opportunity to push for deeper Tier II cities penetration. This is essential for advancing green and sustainable mobility across the nation. To facilitate this transition, robust infrastructure is paramount, particularly in the form of widespread EV charging stations. Establishing a reliable charging network will instill trust among consumers and encourage greater adoption of electric vehicles.

Additionally, we urge the government to reconsider the current GST rate of 18% on EV charging services and reduce it to 5%. Lowering this tax would not only make EV charging more affordable but also stimulate demand for electric vehicles, aligning with our goals for a cleaner and more sustainable future. Furthermore, there is an urgent need to convert heavy commercial vehicles to eco-friendly alternatives, such as electric vehicles, to significantly reduce pollution in major cities. By addressing both consumer and commercial sectors, we can pave the way for a comprehensive and sustainable transformation in India's transportation landscape." said Akshit Bansal, Founder & CEO, Statiq.

"With India’s agriculture sector evolving rapidly, Budget 2025 presents a significant opportunity to champion policies that promote sustainable practices, particularly natural farming. By offering incentives, certification subsidies, and improved market access for organic growers, we can drive a meaningful shift toward healthier and more environmentally conscious farming methods. A gradual transition from chemical-based conventional farming to natural farming is essential, and this shift must be supported through comprehensive policies and financial assistance.

Encouraging urban farming and creating opportunities for people to grow fresh produce at home can also play a crucial role in enhancing food security, fostering self-sufficient and resilient communities. This initiative could additionally help mitigate air pollution in major cities.

Furthermore, allocating dedicated budgetary resources for farmers' education and skilling will be pivotal in equipping them with the knowledge and tools necessary for sustainable agriculture. Building smart villages—rather than focusing solely on smart cities—can foster a more inclusive rural development model, integrating technology, sustainability, and a strong sense of community.

This budget has the potential to serve as a turning point in aligning India’s agricultural practices with long-term sustainability goals, while also nurturing rural ecosystems that contribute to the nation’s broader growth and prosperity." Maninder Singh Nayyar, CEO and Founder, CEF Group.

“The upcoming Budget 2025-26 is a defining moment to position India as a global AI hub. With the recent discussions emphasizing a national AI policy, including the formation of an AI committee by the Reserve Bank of India to develop a comprehensive framework, we see a clear commitment to enabling responsible and innovative AI adoption.

We expect the government to further bolster this vision with dedicated funds and grants for AI startups, enabling them to innovate and contribute significantly to the global AI ecosystem. Addressing the talent gap is equally crucial. Government-backed skill development programs, such as the All India Council for Technical Education's (AICTE) declaration of 2025 as the 'Year of Artificial Intelligence' to empower colleges and students, and the National Skill Development Corporation's (NSDC) aim to skill 100,000 youth in AI, drones, and cloud computing by 2025-end, can equip our workforce with the expertise required to thrive in this evolving landscape.

Additionally, the introduction of a regulatory framework for responsible AI development is crucial to ensure that artificial intelligence technologies are developed and deployed ethically, safely, and transparently. Such frameworks help mitigate risks associated with AI, including biases, lack of transparency, and potential misuse. For instance, the European Union's AI Act emphasizes the necessity of trust in AI, highlighting the dual nature of AI as both a beneficial tool and a potential weapon, thereby underscoring the urgent need for international regulation. Implementing such regulatory frameworks not only protects individual rights and freedoms but also fosters innovation,” says Niraj Kumar, CTO, Onix.

“The Union Budget 2025 offers a significant opportunity to accelerate the adoption of health insurance and enhance financial security across India. By introducing additional sops and tax incentives for individuals and corporate entities, the budget can boost health insurance penetration, aligning with the national vision of achieving universal insurance coverage by 2047. This would ensure greater financial protection for all.

Targeted incentives for corporate entities to provide enhanced employee benefits, such as comprehensive health insurance plans, can further strengthen the country’s economic resilience. Additionally, with the increasing frequency of natural disasters, promoting disaster resilience through incentives for catastrophe insurance products can facilitate timely recovery and reduce financial losses, particularly in high-risk regions. Our vision at Lockton India, is to provide innovative insurance solutions and believe that progressive reforms in this budget can enable the insurance sector to play a crucial role in creating a secure and inclusive future,” says Mukul Bhatia, Managing Director – Head of Corporate Solutions Group, Lockton India.

“The education budget in 2023-2024 is stagnating at 2.9% of GDP, which falls far short of the National Education Policy's visionary recommendation of 6% GDP allocation. It limits our capacity to implement transformational educational reforms, invest in infrastructure, support research initiatives, and enhance overall quality of education. A significant increase in budgetary allocation is not just desirable but absolutely essential for achieving the ambitious goals outlined in the National Education Policy.

The e-journal resource subscription project that is presently available only for public sector universities and institutes must be expanded forthwith. If the private universities and higher education institutions are brought under this initiative, it will give a much-needed relief from the very high costs of academic research resources. Collaborative partnerships between government agencies, technology companies, educational institutions, and local administrations are vital to create accessible and relevant skill development modules that empower rural youth.

Establishing advanced research centers across the country equipped with cutting-edge technology will encourage young people to engage in research and experimentation. Additionally, innovation centers should be created to foster a culture of creativity and problem-solving,” says Col. (Hon) Dr. S.N. Sridhara, Vice Chancellor of Hindustan Institute of Technology & Science.

“The Indian agriculture sector is undergoing major transformation on the back of technological innovations and the upcoming budget presents an integral opportunity to bolster the sector further and empower our farmers.

Increased access to affordable credit remains essential for our farmers. We urge the government to expand interest rate allocation programs and streamline loan processes. Strengthening the PM-Kisan scheme through increased payouts and broader coverage will provide essential income support. A more comprehensive and affordable crop insurance program is also critical to mitigate risks from unpredictable weather and market volatility.

Additionally, the budget must prioritise investments in agricultural research and development (R&D), with a focus on developing new, climate-resilient crop varieties. We also believe that the cost of farming must be reduced. To this end, we strongly recommend a drastic reduction in import duties and GST on pesticides, ensuring farmers have access to high-quality, innovative products. While increased customs duties on pesticides might be beneficial for many, we believe this would be detrimental to farmers. We recommend the budget to focus on two key areas i.e. making innovative technologies accessible and reducing the cost burden on farmers. This requires minimising levies on farm inputs. Specifically, we propose reducing customs duties on intermediates required for manufacturing pesticides from 7.5% to 2.5% and reducing customs duties on pesticides from 10% to 5%.

Furthermore, driving innovation in crop improvement, pest management, and sustainable farming practices is essential. Supporting and expanding Production Linked Incentive (PLI) schemes for the agrochemical and fertiliser sectors will encourage domestic production and reduce reliance on imports. We need to prioritize policies that encourage the adoption of new technologies, including precision agriculture and biotechnology which will help our farmers in the longer run. Sustainable agriculture practices and climate-resilient crops are paramount for the long-term benefit of our agricultural sector.

The 2025-26 budget can be a transformative one for Indian agriculture. In essence, it can lay the foundation for a more resilient, productive, and sustainable agricultural sector by being more inclusive, which will ultimately benefit both farmers and the nation’s economy holistically,” says Ravi Annavarapu, President, FMC India.

“Investments in the logistics sector can support India’s trade goals, enhance economic efficiency and encourage MSMEs to scale-up. To further strengthen India’s position in global markets, achieve the objective of the National Logistics policy, and reach the export target of US$2 trillion by 2030, the thrust should be to simplify export compliance procedures and reduce regulatory cost for logistics players.

We hope to see measures to expedite e-commerce clearances and simplify cross-border online transactions. There needs to be increased budget allocation for the healthcare sector, which relies heavily on a robust and integrated logistics network. This will ensure efficient delivery of medical supplies and increase the sector’s overall effectiveness to cater to pharmaceutical and patient requirements.

In the earlier budgets, the Government has announced programs and initiatives to support MSMEs and we expect that to continue. We hope MSMEs, especially in the tier 2-3 cities, are further empowered with capital and technology adoption for them to compete in global markets,” says Gregory Goba Ble, Head of UPS India and Director of MOVIN Express.

“As the Union Budget approaches, we look forward to decisive and visionary measures that will not only accelerate the adoption of digital payments but also position India as a global benchmark for a secure, inclusive, and innovation-driven digital economy. Groundbreaking initiatives, such as linking credit cards with UPI and leveraging UPI’s extensive reach across the country, have redefined payment convenience and empowered consumers with instant access to credit across diverse customer strata.

In the days to come, we hope the government will prioritize investments in advanced digital infrastructure, robust cybersecurity frameworks, and forward-looking regulatory enhancements. These measures are crucial to enabling alternative credit assessment models, encouraging responsible lending practices, and building consumer trust in an interconnected and fast-evolving digital world.

On a macroeconomic scale, nurturing a robust digital lending ecosystem and enhancing regulatory safeguards will not only fuel sustainable economic growth but also fortify India’s leadership in the global digital payments landscape. By deepening trust, expanding credit accessibility, and empowering financial resilience, we can lay a strong foundation for long-term economic progress and prosperity,” says Ravindra Rai, Managing Director, and CEO of Bobcard Limited.

A key expectation is that the exemption limit for LTCG on equities, currently capped at Rs1.25 lakh, may be increased to Rs2 lakh or higher, allowing investors to retain more of their returns. The new grandfathering rule in capital gains, which allows indexation benefits to resident individuals/HUF on the sale of residential property, needs to be rationalized. It should also be extended to other categories of assessments, such as non-residents, corporates, and other types of assets.

There is growing anticipation for a review of Sections 54 and 54F, which provide exemptions for reinvestment of capital gains in residential properties, potentially expanding eligibility and increasing the ceiling for investment. To address the significant housing shortage in the country, the restriction on investing the sale proceeds in acquiring two residential houses should be removed, and the scope should be broadened to exempt capital gains tax if the sale proceeds are invested in creating housing stock, without any limitation on the number of units for individuals and HUF. Additionally, for claiming deductions under Section 54, the minimum holding period of the new asset should be reduced from 3 years to 2 years, in line with the minimum period for an asset to be treated as a long-term capital asset under Section 2(42A).

Currently, exemptions under Sections 54 and 54F are limited to residential properties. These should be extended to business properties, as selling and reinvesting in business assets aims to support business growth, not generate capital gains. Expanding these exemptions would boost economic activity.

Additionally, the threshold limit of Rs. 50 lakh under Section 54EC should be substantially enhanced to Rs. 2 crore, considering the limit was fixed in 2007. These funds are used for infrastructure development and contribute to societal welfare. These changes, along with a possible reduction in Short-Term Capital Gains (STCG) tax, could create a more investor-friendly environment, encouraging both retail and foreign investments and making India’s tax regime more competitive on the global stage, says Dhruv Chopra, Managing Partner, Dewan P.N. Chopra & Co.

"Over the past year, the government has made commendable progress in promoting clean technologies, supporting startups, and enabling MSMEs. However, to truly unlock the potential of these efforts, it is imperative to address some critical challenges. MSMEs continue to face high production costs, inadequate infrastructure, and complex regulatory frameworks that hinder their growth. A sharper focus is needed on upgrading power infrastructure across industrial zones and simplifying labour laws to improve ease of doing business. Compliance processes, particularly for pollution control, must be further streamlined to ensure organisations can meet requirements efficiently.

In addition, fostering R&D in India requires a transformative approach. The government should explore offering direct funding or grants to industries rather than channelling these exclusively through academic institutions. Empowering industries to lead research initiatives will catalyse innovation and drive economic growth. The bureaucracy in disbursing funds for industry R&D needs to be looked at. Taking funds from DST ends up being more of a burden to the industry than encouraging them to seek government support for R&D.

Another key area requiring urgent attention is energy circularity. The government should incentivise industries and commercial establishments that can showcase effective energy reuse models, similar to the initiatives currently being promoted for water reuse,” says Samit Jain, Managing Director, PLUSS Advanced Technologies

“Health insurance has emerged as a crucial safety net for Indian families, shielding them from unexpected medical expenses. According to the IBEF report, India is the 4th largest general insurance market in Asia and the 14th largest globally. Data from IRDAI’s annual reports reveals that health insurance has grown steadily at approximately 25% annually over the past three years, highlighting its importance in protecting households.

As India advances toward financial inclusivity and universal healthcare, Budget 2025 offers a pivotal opportunity to further strengthen the health insurance sector. Anticipated policy measures include enhancing accessibility, simplifying tax benefits, and encouraging innovation in insurance products. Initiatives such as Bima Sugam, designed to achieve the goal of ‘Insurance for All’ by 2047, are expected to receive regulatory and fiscal support to address the protection gap. Additionally, the budget is likely to focus on expanding access in underserved regions through government-private partnerships, targeted subsidies, and advancements in digital infrastructure. By fostering a conducive ecosystem, Budget 2025 can empower insurers to contribute to a healthier, more secure India, aligning with the vision of a Viksit Bharat,” says Naveen Chandra Jha, MD & CEO, SBI General Insurance.

“As we anticipate the forthcoming budget, it is important to acknowledge the progress made in the agriculture sector over the past year. The government's recent initiatives to enhance farmer welfare, including improved credit and insurance schemes, have been commendable steps in the right direction. Looking ahead, we see significant opportunities to further strengthen the sustainability of Indian agriculture. Key areas include increased investment in yield improvement programs, support for seed ecosystem, and accelerated adoption of digital agriculture.

Empowering Farmer Producer Organizations (FPOs) and implementing a balanced approach to fertilizer subsidy reform will also be crucial. Additionally, policy support for sustainable fertilizer use and faster introduction of new innovative products/ molecules will align well with the industry's focus on environmental stewardship. We are confident that a forward-thinking budget will empower our farmers and pave the way for a resilient and prosperous agricultural future,” says Sanjiv Kanwar, Managing Director, Yara South Asia.

“As we approach the 2025 budget, prioritizing domestic production in the electric vehicle (EV) sector—particularly in the manufacturing of Cathode Active Materials (CAM) for lithium-ion cells—is crucial. At Vidyuta, we are committed to sustainability by producing high-quality CAM using recycled materials. This process reduces reliance on virgin mining by up to 30% and cuts greenhouse gas emissions by 50%, contributing significantly to a circular economy.

With EV adoption in India growing by 150% between 2021 and 2024, this budget marks a pivotal moment to accelerate the green transition. However, India’s heavy reliance on Chinese imports for critical EV components poses significant risks, especially amid ongoing geopolitical tensions. The urgency has further intensified with China now proposing restrictions on licensing its technology for LFP (Lithium Iron Phosphate) and LMFP (Lithium Manganese Iron Phosphate) battery chemistries, potentially creating new barriers for global manufacturers and deepening supply chain vulnerabilities.

Strengthening domestic manufacturing capabilities is no longer optional but a necessity. The Atmanirbhar Bharat initiative provides a vital framework for self-reliance, and proactive measures must be taken to reduce our dependence on imports.

One key policy change we recommend is aligning the GST rate for lithium-ion batteries and EV charging infrastructure with the 5% GST on electric vehicles. Currently, EVs attract 5% GST, while batteries and charging services are taxed at 18%. This disparity not only increases costs but also slows consumer adoption. For instance, reducing GST on batteries alone could make EVs 10-15% more affordable for consumers, driving faster adoption and boosting the EV market.

To further support startups pioneering innovations in critical EV manufacturing, we urge the government to enhance existing initiatives like the Production Linked Incentive (PLI) scheme and the Faster Adoption and Manufacturing of Electric Vehicles (FAME) scheme. Adjusting eligibility criteria within the PLI scheme to accommodate smaller enterprises can foster broader participation, while extending the duration and increasing funding of the FAME scheme can provide sustained support for startups, encouraging long-term investments. Implementing these enhancements can create a more supportive ecosystem for startups, reduce supply chain risks, generate employment opportunities, and ensure national energy security.

By fostering advancements in technology, reducing dependence on imports, and making green mobility more affordable, we can position India as a global leader in the EV landscape. This budget is an opportunity to not only safeguard our energy future but also empower millions of consumers to embrace sustainable transportation.” says Ankit Sharma, CEO & Co-Founder, Vidyuta.

"As we approach Budget 2025, the paint industry is optimistic about government measures that will drive growth and sustainability. With India’s GDP poised for significant expansion and the development of smart cities, the growth in real estate is expected to further fuel demand in decorative and industrial paints. Despite this growth, India’s per capita paint consumption remains lower as compared to developed nations, reflecting immense potential for market expansion. New renovating trends, including shorter repainting cycles, are driving demand in the decorative paints segment, reflecting evolving consumer preferences and driving sustained market growth. Additionally, government schemes such as PMAY (Grameen) and increased spending on infrastructure projects will boost industrial paint demand, driven by economic growth and growing disposable incomes. Reducing import duties is crucial for sustained growth, given the industry's reliance on imported resins and chemicals. Offering titanium discounts on key raw materials can ease cost pressures and improve production efficiency. Coupled with incentives for rural penetration, such measures will help bridge gaps in untapped markets, driving demand in rural areas. We also advocate for policies that stabilize raw material supply, encourage R&D through tax benefits, and provide subsidies for technological upgrades. These steps will reduce production costs, lower energy expenses, and enable greater industry participation.

Incentivizing export growth will enhance industry's global competitiveness and strengthen India's position in the international market. Export promotional incentives can provide much-needed support for Indian paint manufacturers to expand their global footprint. At the same time, increased research funding for sustainable and eco-friendly solutions will align with the 'Viksit Bharat' vision while ensuring the industry adheres to global environmental standards. Budget 2025 has the potential to be a turning point for the paint industry. With heightened investments in construction, including housing, cement, and steel, along with targeted fiscal policies, the industry looks for robust growth. These measures will not only support fiscal deficit reduction goals but also significantly contribute to India's economic development,” says Kuldip Raina, Director, Shalimar Paints.

* The upcoming Budget is expected to provide tax relief while balancing the government’s need to maintain revenue. Taxpayers are hoping for an enhanced rebate for lower-income individuals and an increase in the basic exemption limit under both tax regimes to help offset inflation. To help conserve taxpayers' resources, the turnover limit for taxation on a presumptive basis under Sections 44AD (for businesses) and 44ADA (for professionals) should be increased.
* Homebuyers may benefit from higher interest deduction limits on housing loans under Section 24(b). The deduction should be allowed for the full interest paid, at least for one house, or the current limit of Rs. 2 lakh should be increased to Rs. 3 lakh.
* Faceless assessments and appeals are highly appreciated. However, there is a significant backlog in the completion of faceless appeal disposals, which needs to be expedited in a time-bound manner. The TDS process for non-resident property sellers, which is currently cumbersome, is also expected to be simplified.

The above views are of Dhruv Chopra, Managing Partner, Dewan P.N. Chopra & Co.

“We believe the upcoming budget holds significant potential to support the growth of the health and fitness industry. We hope for measures that reduce import duties on high-quality nutritional supplements, making them more accessible to consumers. Self-care, preventive healthcare and holistic wellness have taken centre stage with a growing awareness around nutrition and building immunity among consumers. Nutrition is becoming mainstream and people are migrating to healthier choices, hence driving the dietary supplements market now to fulfil their nutritional gaps. Hence to give impetus to the overall dietary supplement industry, we hope that the government will cut GST on healthcare supplements from 18% to 5% in the upcoming Union Budget. This would also help in making these products affordable and accessible for all and help boost the healthcare agenda of the government, which is the need of the hour. Additionally, tax incentives for wellness and fitness businesses would not only stimulate entrepreneurship but also encourage a healthier lifestyle among Indians,” says Praveen Chirania, Founder, Muscle and Strength India.

“I believe the upcoming budget presents crucial opportunities to strengthen India's aviation sector. To start with, the government should focus on developing infrastructure in tier-2 and tier-3 cities. While our major airports are impressive, we need similar advancements in smaller cities to fully unlock the potential of the UDAN scheme. This will improve connectivity and generate significant job opportunities. Regarding technology and self-reliance, we require targeted budget allocations for the development of indigenous aviation technologies.

The achievements of HAL and ISRO's programs highlight our capabilities, but we need increased investment in research and development, especially in areas like sustainable aviation fuels, Unmanned Aerial Vehicles, and electric aircraft technology. Institutions must also engage and collaborate in these efforts, merging academic research with industry demands. The education ministry must provide latest and modern aviation facilities and training. This involves establishing specialized institutions with advanced infrastructure, focusing specifically on drone manufacturing, testing, and technological development. By creating collaborative platforms between academic institutions, research centers, and private aerospace industries, India can develop a comprehensive skill development pipeline,” says Dr. Anand Jacob Verghese, Chairman - Hindustan Group of Institutions.

“Budget 2024 had made big changes to the capital gains tax framework, offering both challenges and benefits for investors. Some provisions need a relook. For instance, to streamline the capital gains tax structure by aligning tax rates/ period of holding across various sub-asset classes, for instance, treating international equities the same as domestic equities, debt funds the same as gold funds, and gold funds the same as gold ETFs.The hike in short-term rates from 15% to 20% and in long-term rates from 10% to 12.5% has raised investor tax liabilities significantly. Since now the LTCG tax on securities is on par with other assets, the Securities Transaction Tax (STT) should be abolished.

Budget 2024 unexpectedly removed the indexation benefit for all long-term investments in debt funds. It is expected that all investments in debt funds made up to 31 March 2023, would qualify for the indexation benefit as per earlier provisions.

Tax implications on the buyback of shares - under the amended provisions, the entire consideration received is treated as dividends and taxed in the hands of the shareholders. It is recommended that the government amend the law to allow the cost of the acquisition of shares as a reduction and tax only the net amount as a dividend,” says Niranjan Govindekar, Partner, Corporate Tax, Tax & Regulatory Services, BDO India.

“IRDAI has ushered in significant regulatory reforms for the insurance sector as part of the vision of “Insurance for all by 2047”. The Union Budget 2025 presents an opportunity to transform the insurance sector. Policy measures like increasing the FDI limit to 100%, reducing the NOF (Net Owned Fund) requirement to ₹50 crore, introducing composite licenses for insurers, and enabling an open architecture for individual agents can foster greater competition, innovation, and efficiency in the sector. On the taxation front, we hope to see rationalization of GST rates on health and life insurance which will make insurance products more affordable and accessible for all,” says Ravi Bhadani, Partner at SNG & Partner Advocates & Solicitors.

“The rationalization of the income tax is long overdue. While some efforts were made in that direction with a proposed Direct Tax Code, not much has happened post-introduction of a draft. It appears that the thought process currently is to fix the issues within the current enactment rather than bring up a new one. There are several areas in the current enactments that need a fix. But a few quick fixes that can help taxpayers is the rationalization of TDS obligations. Currently, there are multiple provisions in the TDS sections that are creating issues for taxpayers. Rationalization of rates is one area that can help. Additionally, rationalization of provisions to take care of litigious issues that have emerged could help taxpayers with certainty.

Another area is to curb litigation on matters that have attained finality. With significant amounts stuck in litigation, this poses an issue for taxpayers who want certainty and the tax department that wants to collect taxes. The Department continues to litigate matters which have even attained finality at the Supreme Court. The government can think of issue-based guidelines to tax department which can curb the scourge of litigation,” says Rony Antony, Partner & Leader, Corporate Tax (South), Tax & Regulatory Services, BDO India.

“As we approach the Union Budget 2025, capital gains tax rationalization is one of the key areas that everyone has been focusing on. Some of the key demands for the rationalization of capital gains tax include lowering tax rates on long-term capital gains, revising the thresholds for LTCG tax, enhancing indexation benefits, increasing threshold limits of deductions like 54, 54F, etc., and other similar measures. The government has often balanced between making changes to encourage investment and maintaining revenue targets. The FM is likely to weigh the potential revenue impact of any changes and whether it aligns with broader economic goals.

Given the current economic priorities, such as boosting consumption, job creation, and handling fiscal deficits, tax rationalization could be linked with broader reforms. The FM's stance on capital gains tax rationalization will likely depend on a careful assessment of how much the government can afford in terms of tax cuts while still balancing its budgetary goals. While it's uncertain if the FM will concede fully to the demands of capital gains tax rationalization, the market continues to expect some changes that could benefit long-term investors,” says Sofiya Syed, Direct Tax Division, Dewan P.N. Chopra & Co.

“Two of the biggest asks of foreign investors in India are tax certainty and a reduced timeline for litigation. Earlier, the Authority for Advance Rulings (AAR) provided binding rulings that offered clarity and assurance to taxpayers and the tax department alike. This was one avenue to provide tax certainty to foreign investors. It is time to strengthen the framework of the Board for Advance Rulings and re-introduce the binding nature to provide much-needed certainty from a tax perspective to foreign investors.

Currently, the maximum appeals are pending at the Commissioner (Appeals), the first appellate authority, with approximately 5.49 lakh appeals pending on April 1, 2024 (out of which 3.01 lakh appeals were filed before April 1, 2022) which does not read very well on India’s scorecard. The number of Commissioner (Appeals) needs to be increased to adjudicate pending appeals in an accelerated manner. A strict timeline (say 9 or 12 months) should be introduced to dispose of the appeals, similar to dispute resolution panel timelines. Both the above measures will enhance foreign investor confidence, positioning India as a preferred destination for doing business,” says Prashant Bhojwani, Partner, Corporate Tax, Tax & Regulatory Services, BDO India.

George Alexander Muthoot, MD of Muthoot Finance says, “The forthcoming union budget is poised to chart the course for the new Indian government’s economic growth agenda. On the back of the political stability and resilient economy, it is expected to provide relief to various sections of the society and benefits for various sectors. The budget 2025 has the opportunity to help provide the NBFC sector and retail investors with the much needed impetus. Below are a few recommendations where government support will go a long way in providing last-mile credit.

Wishlist as a gold loan NBFC

We would like to continue to advocate to provide cushion and offer maximum benefit to customers by urging the government to grant eligible gold loan NBFCs with ‘priority sector status’. We believe that providing priority sector status to eligible gold loans NBFCs will be a step forward in driving financial inclusion as it majorly impacts the small borrowers whose borrowing needs are frequently less than Rs 50,000. We also propose for a ‘Gold linked credit line via UPI’ that can go a long way in helping households/small business owners meet their financing needs and monetise idle gold jewellery. Once the NBFCs are allowed to link with the UPI payment system, this will act as a secured credit that would be extended by NBFCs at a lower interest rate (12%-18%) compared to the high interest rates (around 36%) charged by credit cards.

We further seek a level playing field by bridging the disparity and aligning the single counterparty exposure limits for gold loan NBFCs in comparison with other NBFCs i.e. 20% of Tier-1 capital. This restriction impacts the ability to lend credit and negatively impacts our potential customers.”

“Budget is a strategic exercise to estimate the revenue & expenditure, for the next 12 months. The forthcoming budget has the potential for a windfall from the capital of the country, Delhi. The trigger is the much-awaited gazette notification of the Delhi Master plan MPD2041 and unlocking of more than 1 lakh crore of private sector investments which can become a revenue spinner for the government through incremental collections from real estate development.”

“The delay in the gazette notification of the Master Plan for Delhi 2041, has sent a whole section of people into complete uncertainty. Landowners, investors, developers, and many residents have waited with bated breath for this overarching blueprint of urban development. Budget 2025 should prioritize the expedited completion of the MPD 2041 project, as it can be the biggest economic driver in Delhi/ NCR and potentially add 10% to India’s GDP.”

“Delhi contributes over 50% to NCR’s GDP, which is three times the national average per capita income. And MPD 2041 can double Delhi’s GDP every seven years as it covers 57,000 hectares of land, which would change the face of Delhi as a global services hub for over 31 million people. Delay in MPD 2041 is costing Delhi massive losses.”

“This delay in finalizing MPD2041 also denies revenues the government stands to gain. The topline potential to be captured from developments undertaken through MPD2041 is expected to be $150 billion, and the government is likely to garner at least 30% of that through different levies. Approving MPD2041 will unlock such revenue streams for local civic authorities, catalyzing the development of Delhi as an economic and social hub. We strongly urge the government to prioritize the Delhi Master Plan 2041 (MPD 2041) in this year’s budget, approaching it with the focus and commitment it deserves,” says Ramesh Menon, Founder Director Delhi Consortiums.

“If India is willing to become truly ‘Viksit Bharat’ by 2047 and Developed Economy besides great Defence capabilities, it should develop the other great characteristics of developed economies like fully functional and efficient public markets as well as free currency. As far as public markets are concerned India had a great going fully functional market on all fronts, a couple of years ago. There was great liquidity and on that basis our market use to enjoy the premium vis-à-vis other emerging markets.

Having said that, the steps taken in past two years, in the budget and outside it, on taxation front and on regulatory front have resulted in India’s premium taking a hit compared to other emerging markets. It has also impacted the market liquidity. For example, the Regulatory action have completely destroyed the Currency Derivative market in India, which has dipped to ₹5,000 crore daily turnover from the ₹40,000 crore in daily turnover earlier. In addition to this, series of Regulatory action on the Equity Derivatives segment of the Indian capital market plus hiking the Securities Transaction Tax (STT) across the board has considerably reduced the liquidity in the market by 30-40 percent as compared to earlier period when the rates were not tinkered.

In this backdrop, this time the union budget should make an attempt to restore these two things; the currency derivatives markets should be opened up as this is critical for the Indian economy to become a Developed Economy. To maintain the liquidity in the capital market, the government should rationalise the STT rates on futures, options and other instruments. It may probably result in loss of revenue for the government to some extent, but what it will be more than compensated by the new inflows that will come in by way of increased liquidity and by way of increased participation,” says Jimeet Modi, Founder and CEO, SAMCO Securities.

“As the economy is gradually shifting towards the new tax regime in a discretionary manner, it becomes imperative to rationalize tax slabs in the absence of major deductions and other incentives. The proposal to introduce an additional tax slab of 25% for income levels between INR 15 lakhs to 20 lakhs will surely provide significant tax relief and increase disposable income. Increased liquidity in the hands of individuals will hold higher potential to spur consumption. Additionally, the proposal to exempt income tax up to INR 10 lakhs will surely scale-up liquidity in the hands of middle-class salaried individuals,” says Vimal Nadar, Senior Director, Research, Colliers India.

“With the growing impetus on diversifying the funding mix of NBFCs, we would urge the regulators and government to simplify the taxation compliance on the TDS on listed NCDs which is currently at 10% TDS. The selling and re-selling of listed NCDs through stock exchanges ends up putting a taxation burden on the end investor. Since the TDS were introduced on listed securities keeping in mind that the customers are not paying the tax, however on ground there is an adequate trail of holders and interest payments. Our other recommendation is for allowing additional interest rate on Public Issue of Secured Non-Convertible Debentures (NCDs) issued to retail investors, pensioners and senior citizens over and above the interest rate applicable to institutional investors. We believe these regulations are crucial in order to attract more retail investors and ensure fair compensations to all our investors and stakeholders,” says George Alexander Muthoot, MD of Muthoot Finance.

“We anticipate that the 2025 Union Budget will create an environment conducive to India's ambition of becoming a global manufacturing hub. The growth of the manufacturing sector is vital for India to generate significant employment opportunities and to become the third-largest economy by 2027. The budget should outline a clear roadmap for the future growth of manufacturing in India, while also supporting skill development, research and development, and investment, which are essential for smart manufacturing.

Indian manufacturing is experiencing notable growth in industries such as electric vehicles, semiconductors, renewable energy equipment, and biotechnology. This growth is driven by increasing environmental awareness, rapid digitalization, a shift toward sustainable energy, and advancements in medical research. Strategic investments in new technologies and R&D in areas like cleantech, electric mobility, artificial intelligence, machine learning, robotics, and cybersecurity are crucial.

Equally important is the emphasis on micro, small, and medium enterprises (MSMEs), which are the backbone of our economy. The budget should focus on strengthening the growth and resilience of MSMEs, facilitating their digital transformation to help them navigate challenges and thrive in a competitive landscape,” says Dilip Sawney, Managing Director, Rockwell Automation India.

“The retail market in India is expanding rapidly, with a 9% yearly growth rate predicted between 2019 and 2030. It is expected to expand from $779 billion in 2019 to $1.4 trillion by 2026, and nearly $1.8 trillion by 2030. This shows the retail sector’s contribution to the Indian economy. The sector can advance significantly if the National Retail Trade Policy is implemented soon. This would lessen the burden of compliance and regulations while streamlining the expansion of all retail trade models. To promote stability and growth in the industry, the government must also implement rules that allow small merchants to receive low-cost loans. The forthcoming budget must continue supporting programs such as Digital India, emphasizing establishing policies that ensure equitable opportunity for online and offline shops. Since we also work in the textile industry, we strongly recommend that the government reduce import taxes on textiles because raw materials such as viscose and polyester staple fibers are costly to import in India compared to the worldwide market.

Additionally, the domestic prices of raw materials in India are far higher than those outside, whereas competitors such as Bangladesh and Vietnam have unrestricted access to these materials. India has implemented quality control orders on yarn and man-made fiber, which hinder the free flow of these raw materials by acting as a non-tariff barrier to imports. In addition to affecting domestic prices, this has led to a shortage of specialty fibers and yarns. We, therefore, urge the government to change its policies to reduce the burden of heavy import duties on the Indian textile market and encourage domestic manufacturing units so that we can compete in the global textile landscape,” says Ajit Kankariya, Director, Sumeet Wholesale.