UNION FINANCE BUDGET 2025
The Honourable Finance Minister created ripples throughout our country by presenting a highly favourable Union Budget for 2025for the vast middle-income group of India in the Parliament on February 1 2025.
For the Tax Payers in general
No tax on income upto Rs 12 lacs. With the standard deduction of Rs 75000- increased from the last year’s Rs 50000-salaried remain tax free upto Rs 12.75 lacs. Rebate of Rs 60000 and tax slab changes will result in savings upto Rs 1.1 lac.
Updated Returns can be filed upto 48 months from end of assessment year- increased from the present 2 years.
No deemed rent for two self-occupied house properties.
Threshold for TCS on overseas remittances raised to Rs 10 lacs. No TCS on remittances for education from loan.
TDS on house rent to apply only beyond Rs 6 lacs a year against earlier Rs 2.4 lacs.
For Senior citizens withdrawals from NSS Accounts post August 29 2024 to be tax exempt.
New Tax Rates-
Rs 0-4 lacs- Nil.
Rs 4-8 lacs- 5%
Rs 8-12 lacs- 10%
Rs 12-16 lacs- 15%
Rs 16-20 lacs-20%
Rs 20-24 lacs-25%
Above Rs 24 lacs-30%
Under the new tax regime, individuals earning a taxable income of Rs 25 lacs can save as much as Rs 110000 in taxes.
No basic Customs duty on 36 lifesaving drugs for cancer and other rare diseases.
10-year tax holiday for Start-ups incorporated before April 1 2030. Fund of Funds for Start-ups with Rs 10000 crores corpus.
Senior citizens are not taxed upto Rs 12 lacs pension for the year along with a Standard Deduction of Rs 75000, totalling to Rs 12.75 lacs.
The limit for tax deduction -TDS- on interest income for Senior citizens has been increased from the present Rs 50000 to Rs 1 lac.
For other tax payers, this limit has been increased to Rs 50000 from the present Rs 40000.
Tax on perks such as rent-free accommodation, use of car, driver, reimbursements of fuel and maintenance of car, stock incentives, gifts, club memberships etc.
Insurance Sector
FDI in the insurance sector has been increased from 74% to 100%.
The Minister has promised easier entry norms for the Foreign Players, who can invest all their excess funds in India only.
Further the proceeds from ULIPs which do not benefit from tax exemptions, will be taxed at a capital gains rate of 12% instead of the higher marginal tax rate which can go up to 30%.
Also, the Reinsurance for Crop cover has been exempted from service tax.
Threshold for tax deduction at source on insurance commission has been increased to Rs 20000 from Rs 15000 earlier.
There would be relaxation on the appointment of key management personnel and other norms.
With these narratives for strengthened investment, the industry can further drive digital transformation, develop customer- centric solutions and expand its reach towards its goal of Insurance for All by 2047, as mandated by IRDAI.
Health Care Industry
In addition to exemption of Customs Duty on 36 cancer therapies, the Minister has reduced the import duty to 5% on six critical medicines.
Additionally, 13 patient assistance programs- PAP-have been included under this exemption framework, which will further ease the financial burden on patients requiring critical therapies.
Government will add 10000 medical seats during the next financial year. The goal is to have 75000 more seats in five years.
In a big push to expand cancer treatment facilities beyond big cities, Day Care Cancer Ceners will be set up in all district hospitals over the next three years and 200 of them will be established in 2025-26, a step towards making cancer treatment more accessible and affordable. These centers offer facilities such as biopsy, blood transfusion and chemotherapy, treatments that do not require hospitalization for more than 24 hours.
Gig workers will be provided health care facilities under PM Jan Arokya Yojana, thereby giving Rs 5 lacs health insurance. This may cover 12 crores poor and vulnerable families.
This gesture is in addition of such insurance scheme to all senior citizens aged 70 and above regardless of their income.
These budget measures will encourage medical tourism and promote ‘Heal in India’ concept making our country a global health care destination.
Booster for a higher economic growth
This budget prioritises consumption, employment, enhances rural prosperity and addresses bottlenecks in our economic outlook.
Rationalization of personal tax structure could unleash a consumption boom in the country.
Focussing on the middle class and youth will help the economic engine with robust consumerism and productivity led growth.
This budget has sufficient provisions to unshakle India’s demographic dividend and it will promote social justice through new welfare policies and will take our country to a more significant position in the world economy.
About the Author
R. Venugopal is a Retired ED, LIC of India and a Retired Professor, NIA, Pune. He can be contacted at rvgpal13@gmail.com
