Union Budget 2025
Union Budget 2025 – During a pre-Budget consultation meeting with Finance Minister Nirmala Sitharaman and other officials, representatives from the PHD Chamber of Commerce & Industry (PHDCCI) proposed several important measures. One of the key suggestions put forth was the elimination of the Securities Transaction Tax (STT).
On December 30, the PHDCCI suggested that the recent increase in the long-term capital gains tax on listed shares from 10% to 12.5% has brought the tax on shares in line with other assets. As a result, the PHDCCI proposed that the Securities Transaction Tax (STT) should be abolished.
Between April 1 and December 17 of the current fiscal year, a total of Rs 40,114 crore was collected through STT.
The PHDCCI believes that eliminating STT would lessen the tax burden on investors and promote more investment in the stock market. This, in turn, would help stimulate economic growth.
Earlier on December 30, the Ministry of Finance announced that Union Minister for Finance and Corporate Affairs, Smt. Nirmala Sitharaman, chaired the fifth Pre-Budget Consultation with industry representatives in preparation for the upcoming Union Budget 2025-26 in New Delhi.
The other suggested measures are:
- Lower tax rates for individuals and Limited Liability Partnership (LLP) firms to 25%
- Boost capital expenditure to over Rs 13 lakh crore by 2025-26, up from Rs 11.11 lakh crore in the current fiscal year.
- Extend the PLI scheme to include additional sectors such as medicinal plants, handicrafts, leather and footwear, gems and jewellery, and the space industry.
In order to stimulate economic growth and encourage investment, the government has proposed a reduction in tax rates for both individuals and LLP firms to 25%. This move aims to provide relief to taxpayers and promote business expansion.
Furthermore, there is a plan to increase capital expenditure to over Rs 13 lakh crore by the fiscal year 2025-26, a significant jump from the current Rs 11.11 lakh crore. This increase in capital expenditure is expected to drive infrastructure development and create more job opportunities.
Additionally, the Production Linked Incentive (PLI) scheme, which has been successful in boosting manufacturing in 14 sectors, will now be expanded to include new sectors such as medicinal plants, handicrafts, leather and footwear, gems and jewellery, and the space industry. This expansion is aimed at promoting growth and competitiveness in these sectors, ultimately contributing to the overall economic development of the country.
Key suggestions from ASSOCHAM in pre-Budget meeting:
- Implement a requirement for banks to regularly report the quantity and value of collateral-free loans given to Micro, Small, and Medium Enterprises (MSMEs).
- Allocate additional funds or resources to improve access to credit for MSMEs, similar to the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) established during the COVID-19 pandemic.
- Expand the coverage of presumptive taxation to include MSMEs and emerging industries such as data centers, data hosting, and cloud computing.
Key suggestions from FICCI in pre-Budget meeting:
- Increase capital expenditure (capex) in FY26 by 15% over the Rs 11.11 lakh crore budgeted in 2024-25.
- Rationalize multiple TDS/TCS rates by consolidating them into a simple two or three-tier rate structure.
- Cease imposing TDS/TCS on transactions subject to GST, as the necessary information is already available through GST filings.
- FICCI recommends increasing the health sector allocation to 2.5% of GDP by 2025.
- Review the Priority Sector Lending framework to incorporate climate adaptation and climate risk mitigation activities such as electric vehicles.
The Ministry reported that senior officials, including the Finance Secretary, the Secretary of the Department of Investment and Public Asset Management (DIPAM), and secretaries from the Department of Economic Affairs and the Department for Promotion of Industry and Internal Trade (DPIIT), attended the meeting. The Chief Economic Adviser to the Government of India also participated.
Last week, Sitharaman chaired the fourth Pre-Budget Consultation meeting with stakeholders and experts from the export, trade, and industry sectors in preparation for the Union Budget 2025-26. She has conducted several meetings with various stakeholders, including MSMEs, farmers’ associations, and economists.
The 2025-26 Budget will be Nirmala Sitharaman’s eighth budget.
Stay tuned for more updates and insights on the stock market! For more insights on investing in the Indian stock market, check out resources like Moneycontrol and NSE India.
Disclaimer: This blog post is for informational purposes only and should not be considered financial advice. Investors should conduct thorough research and consult with a qualified financial advisor before making any investment decisions.