The Finance Ministry has commenced preparations for Budget 2025, set to be announced in two months. Expected to provide relief to the Indian middle class, the budget will likely emphasize urban consumption.
Tax breaks may be introduced, along with adjustments in tax slab rates, granting more disposable income to urban and semi-urban populations. A pivotal aspect of the budget will include supporting employment-generating sectors, particularly MSMEs, to stimulate urban economic activity.
Meetings regarding Budget 2025 began last week, focusing on taxation, including discussions on tobacco products. The ministry has formed broad thematic teams to streamline major schemes in line with these objectives.
In contrast, the Union Budget 2024, presented by Finance Minister Nirmala Sitharaman, predominantly targeted the poor, women, youth, and farmers. Key aspects included increased public spending, job creation initiatives, and measures aimed at assisting the middle class.
Noteworthy tax changes included an increase in the standard deduction under the New Tax Regime from Rs 50,000 to Rs 75,000. The budget also established a NIL tax rate for incomes up to Rs 3 lakh and a 5% rate for incomes ranging from Rs 3 lakh to Rs 7 lakh.
Additionally, the short-term capital gains tax rose from 15% to 20%, while long-term capital gains tax was elevated to 12.5%. Overall, Budget 2024 focused on inclusive growth and strengthening the economic resilience of various demographics.