The Union Budget 2025 is a marvelous multiplier for MSME, Make in India and middle class prosperity. CA Rohan Bhandare decodes the Union Budget
The run-up to Union Budget 2025 was surrounded by global uncertainties, tariff anxieties and a need to drive consumption. The Economic Survey, which is released a day before the Budget had also underscored that deregulation was a pressing need for the industry. In light of the above, the Finance Minister’s eighth consecutive budget has arrived just in time, generating high levels of positivity among both, the industry and the salaried class.
Personal Taxation
The Finance Minister may have reserved the best announcement for last in her speech, but it’s difficult for us to hold the excitement. A tax rebate for incomes up to `12 lakh under the new regime is bold and perhaps has gone beyond what many were expecting. The rebate along with the overhaul of the tax slabs should help boost private consumption, giving an impetus to the economy. Additionally, the tax burden on second self-occupied properties has been reduced, further enhancing savings for individual taxpayers.
Enabling Small and Medium Businesses
MSMEs have been the growth drivers of the economy, and the significant credit guarantee cover, easy access to export credit and cross-border factoring support will pave the way for MSMEs to go global.
The existing thresholds defining a micro, small and medium enterprise have been revised by raising the existing thresholds of turnover and investment in plant and machinery by two times and two and a half times respectively. This would result in more entities entering in the MSME ambit and will help enterprises to get easy access to finance and benefits from government schemes.
BharatTradeNet, the digital public infrastructure for trade documentation and financing solutions, could be a game changer for businesses engaged in international trade. The proposed platform will integrate key stakeholders and would complement the Unified Logistics Interface Platform.
Make in India, Make for the World
Transforming India into a global manufacturing hub could soon come to fruition through the National Manufacturing Mission, which will provide policy support, execution road maps, and a monitoring framework for central ministries and states. The focus on Cleantech manufacturing and future ready work forces might auger well for Goa.
The rationalisation of custom tariffs across various sectors will lower the cost of imports and encourage domestic manufacturing. Reintroducing the concessional tax rate regime for new manufacturing units would have probably ticked another major demand on the industry’s wish list.
Ease of Doing Business
The ease of doing business has been a consistent theme in recent Budgets and a setting up a High-Level Committee for Regulatory Reforms for a review of all non-financial sector regulations, licenses, and permissions will surely strengthen trust-based economic governance.
While there was more scope for simplification, the compliance burden of TDS/TCS has significantly reduced due to the enhanced threshold limits for a large number of sections. A notable change is the discontinuance of TCS on Sale of Goods which had resulted in constant reconciliations and monitoring between buyers and sellers. The withdrawal of higher TDS/TCS for non filers of return of income was much needed since it was impractical for them to ascertain the tax filing status of the deductees.
Investor Friendly Environment
After doing away with Angel Tax during the last budget, the extended window of tax benefits for newly incorporated startups, the `10,000 crore Fund of Funds Scheme and proposed Deep Tech Fund will provide crucial boost for startups. To encourage sustained foreign investment and in the spirit of ‘First Develop India’, the current model of Bilateral Investment Treaty will also be revamped.
Entities contemplating mergers to refresh their carry forward losses might be challenged by the new proposal, which restricts the extended period of such losses. However, the Finance Minister’s proposal on speedy approvals of company mergers by widening the eligibility for ‘Fast-Track’ mergers is a welcome change.
Goa also has an opportunity to showcase its strengths in the proposed Investment Friendliness Index of States, and encourage entities to set shop here.
Incentivising States
Goa has been a major beneficiary for infrastructure projects, and the continued 50- year interest free loans to states
for capital expenditure will have a multiplier effect for Goa. The proposal to incentivise states to implement power reforms by allowing them to borrow an additional 0.5 per cent of their GSDP could help states to transform this sector and provide high quality power.
While the GST rate rationalisation for hotel accommodations was not on the cards, Goa also has an opportunity to add to its tourism and health basket by exploring the proposals of Medical Tourism and Heal in India. The top 50 tourist destination sites in the country will be developed in partnership with states through a challenge mode, and Goa should make efforts to be a frontrunner. The performance-linked incentives, streamlining of e-visas facilities,
better connectivity, and additional financing options for home stays could boost Goa’s tourism.
Minimising Litigation
In line with the government’s ‘trust first, scrutinise later’ approach, the time limit for taxpayers to file updated
returns has been extended from two years to four years. The introduction of a block assessment concept to transfer pricing matters will also help mitigate the need for recurring litigation on the same issues.
The upcoming Income Tax Bill could be a historic reform in the country’s taxation system, signalling a long-overdue modernization of India’s tax framework. If executed well, this could bring much needed simplification and clarity for
taxpayers. There were with no surprises in GST considering that the proposed amendments were aligned to those approved by the GST Council. However, the key proposal for a retrospective change to tighten provisions on input tax credit on construction of immovable property, particularly in light of the recent Supreme Court ruling leaves something to be desired. Although the industry’s demand for a comprehensive Customs Amnesty Scheme was unfulfilled, the Budget has proposed a voluntary disclosure scheme under Customs, giving a chance to the taxpayer to rectify any incorrect import. The Customs tariff structure is also proposed to be simplified,
and timelines have been fixed to finalise provisional assessments. It is noteworthy that the despite significant expenditures and foregoing of tax revenues, the Government has still maintained financial discipline.
With much needed focus on driving consumption and allocation to key sectors, the Union Budget has outlined a well calibrated strategy to expedite India’s growth trajectory.
Budget 2025 is a vision for empowering India’s middle class: Dr Sawant
In response to the recent Union Budget announcement, Chief Minister Dr Pramod Sawant praised the introduction of an income tax exemption for individuals earning up to `12 Lakhs, describing it as a progressive move to empower the middle class. He emphasized that this measure would promote greater savings, encourage investments, and ultimately contribute to building a stronger India. The Chief Minister highlighted key areas of focus within the budget, including agricultural growth, rural prosperity, inclusive development, MSME support,
employment generation, workforce investment, energy security, export promotion, and fostering innovation.
He stressed that the Budget places significant emphasis on tourism-driven economic growth, job creation, the fisheries sector, and enhancing the role of the private sector in driving innovation. “This Budget represents a collective effort towards realizing the vision of a ‘Viksit Bharat’ by 2047,” Dr Sawant remarked.
Rajya Sabha MP Sadanand Tanavade lauded the Budget for laying the groundwork for historic reforms in taxation, mining, power, tourism, fisheries, shipbuilding, and private sector innovation. He described the budget as a comprehensive blueprint for economic expansion, positioning India to become self-reliant and globally competitive.”
