The Union Budget 2025 takes a balanced approach to strengthening India's energy sector by addressing financial, infrastructure, and manufacturing challenges. It prioritizes DISCOM reforms, transmission expansion, and renewable energy growth while reducing costs for solar and battery storage through lower duties and enhanced PLI incentives. The focus on green hydrogen, nuclear energy, and domestic manufacturing signals a long-term vision for energy security and self-reliance. While these measures create a strong foundation for India's clean energy transition, their success will depend on effective implementation, regulatory clarity, and sustained financial support to ensure long-term impact.
Rakesh K JhaPartner, Energy Sector Solutions, Sustainability and ESG
The IFSC Gift City has been making remarkable progress. More than 700 entities are currently set up reflecting the intent of the offshore and onshore industry players for placing India’s maiden IFSC at the forefront amongst the global peer IFSCs. To keep the momentum going, the Government has put up a plethora of measures giving the funds industry a reason to cheer. There are announcements on the extension of the current tax holidays by five years to March 31 2030 for ship-leasing units, insurance offices and treasury centres of global companies, which will provide much-needed cushion to continue scaling up or shift offshore business operations to the Indian soil.
Another proposal is on the extension of the sunset clause by five years to March 31 2030 for Sovereign Wealth funds and Infrastructure Funds. These funds are primarily targeted for long-term investments and fixed returns. This move will surely put the funds sitting on the fence to look at the Indian market from a long-term perspective and plan the foreign capital in the Indian market.
Also, there is a tax relief in place on relocation of offshore funds to IFSC for certain funds domiciled in foreign countries. The said relief is now extended to include funds set up as Retail schemes and Exchange Traded Funds (ETFs) as well. Last year’s Budget, in July 2024, had already given tax exemption on income earned by such Retail schemes and ETFs in IFSC. The further grant of tax exemption on relocation will make IFSC Gift City a competitive platform for overseas funds planning to relocate to India from global jurisdictions to the India IFSC.
The underlying theme of Union Budget 2025 is increasing access to quality education by expansion of student intake capacity in IITs, Atal Tinkering Labs, medical education and national centres for skilling. Providing broadband connectivity across government schools seems to be an additional effort in improving access to quality learning tools, resources and teachers. The announcement for setting up a centre of excellence in AI for education will help in building academic courses/ programmes and meeting the future demand of skilled workforce globally.
Furthermore, it is heartening to note the Government attaching significant importance to 100% good quality school education and 100% skilled labour with meaningful employment for achieving our vision of Viksit Bharat 2047. However, a lot of effort and investment will be required over the next 2 decades for realisation. Allocation of INR 20,000 Cr. for implementing private sector R&D is likely to provide impetus to our efforts of transforming into a knowledge hub. The removal of TCS on remittances for educational purposes meets a long-standing demand of the stakeholders.
Rohin KapoorPartner, Education and Skilling, Management Consulting
Individual:
In Budget 2025, the Government has finally provided much-awaited relief to the middle class. With relaxation in tax slab threshold under new tax regime and increase in the threshold limit for TDS, the middle class would have higher spending capacity, and this would positively impact the economic growth of the country.
Corporate:
The Government has been long advocating the revival of sick companies through introduction of Insolvency and Bankruptcy Code, introducing and increasing the scope of Fast Track Merger and procedure. However, many corporate groups have been planning their taxes through the amalgamation of loss-making companies with their profit-generating companies, thereby setting off and carrying forward the losses with a fresh period (8 years) for carry-forward and set-off of losses. With an aim to plug in the tax planning through business re-organisation, the Government has proposed restricting the extension of accumulated losses to the original eight assessment years of the predecessor company.
Soumyadip Roy ChoudhuryPartner, Tax & Regulatory Services
The IFSC Gift City has been making remarkable progress. More than 700 entities are currently set up reflecting the intent of the offshore and onshore industry players for placing India’s maiden IFSC at the forefront amongst the global peer IFSCs. To keep the momentum going, the Government has put up a plethora of measures giving the funds industry a reason to cheer. There are announcements on the extension of the current tax holidays by five years to March 31 2030 for ship-leasing units, insurance offices and treasury centres of global companies, which will provide much-needed cushion to continue scaling up or shift offshore business operations to the Indian soil. Another proposal is on the extension of the sunset clause by five years to March 31 2030 for Sovereign Wealth funds and Infrastructure Funds. These funds are primarily targeted for long-term investments and fixed returns. This move will surely put the funds sitting on the fence to look at the Indian market from a long-term perspective and plan the foreign capital in the Indian market.
Also, there is a tax relief in place on relocation of offshore funds to IFSC for certain funds domiciled in foreign countries. The said relief is now extended to include funds set up as Retail schemes and Exchange Traded Funds (ETFs) as well. Last year’s Budget, in July 2024, had already given tax exemption on income earned by such Retail schemes and ETFs in IFSC. The further grant of tax exemption on relocation will make IFSC Gift City a competitive platform for overseas funds planning to relocate to India from global jurisdictions to the India IFSC.
Among various reforms, Tax Deducted at Source (TDS) has been proposed to be rationalised. From an individual perspective, let’s look at some proposed changes. Senior citizens will not suffer TDS on interests from other than securities such as bank FD up to INR 1,00,000. For other than senior citizens, the threshold to deduct TDS on interest other than securities paid by a bank or a cooperative society or a post office has been increased from INR 40,000 to INR 50,000. For other payers, the threshold has been increased from INR 5,000 to INR 10,000. Under Section 194, the threshold to deduct TDS on dividends for an individual shareholder has been increased from INR 5,000 to INR 10,000. Under Section 194I, the threshold to deduct TDS on rent paid by a resident individual has been changed from INR 2,40,000 during the financial year to INR 50,000 per month or part of the month. This rationalisation would definitely help in reduced compliance burden for the payers.
Santhosh SivarajPartner, Global Employer Services, Tax & Regulatory Services
Currently, an individual taxpayer residing elsewhere has the option to declare their owned house property as ‘Self Occupied house Property’ (SOP) if the same could not be occupied by them due to reasons such as employment/ business or profession carried on at any other place.
Hence, in case of a taxpayer moving to a different city (due to reasons other than employment/ business or profession), they have to declare such property as ‘Deemed to be let-out’ property and thereby, taxable on the notional rental income.
To simplify the provisions, it is proposed to remove such reason of non-occupation of house property. This would have a positive impact for taxpayers such as retired citizens, and non-working population moving to other cities, and enable them to enjoy the benefit unconditionally.
Taxpayers have the option to declare up to 2 house properties as SOP and it continues to be the same.
Deepashree ShettyPartner, Global Employer Services, Tax & Regulatory Services
The underlying theme of Union Budget 2025 is increasing access to quality education by expansion of student intake capacity in IITs, Atal Tinkering Labs, medical education and national centres for skilling. Providing broadband connectivity across government schools seems to be an additional effort in improving access to quality learning tools, resources and teachers. The announcement for setting up a centre of excellence in AI for education will help in building academic courses/ programmes and meeting the future demand of skilled workforce globally.
Furthermore, it is heartening to note the Government attaching significant importance to 100% good quality school education and 100% skilled labour with meaningful employment for achieving our vision of Viksit Bharat 2047. However, a lot of effort and investment will be required over the next 2 decades for realisation. Allocation of INR 20,000 Cr. for implementing private sector R&D is likely to provide impetus to our efforts of transforming into a knowledge hub. The removal of TCS on remittances for educational purposes meets a long-standing demand of the stakeholders.
Rohin KapoorPartner, Education and Skilling, Management Consulting
The faceless procedures were supposed to be introduced in a phased manner so as to impart greater efficiency, transparency and accountability. A mechanism for faceless assessment, re-assessment or recomputation and faceless CIT(A) is already in place and it was proposed that faceless schemes for determination of arm's length price, i.e., Transfer Pricing assessments, faceless Dispute Resolution Panel, faceless appeal/proceedings before the Income Tax Appellate Tribunal may be notified upto a specified cut-off date i.e. March 31, 2025. The Union Budget 2025 proposes to allow additional time to the Central Government to issue directions for such faceless schemes beyond such cut-off date.
Deepa ShethAssociate Partner, Tax and Regulatory Services
The proposal to set up a high-level committee to revisit the existing current regulations will usher in the much-needed investor comfort and confidence in carrying business in India. The regulations are expected to be light-touch-based, technology-driven, trust-based, globally-competent and people-friendly.
Rationalisation of levy of TCS on LRS by increasing the limit from the existing INR 7 lakh to INR 10 lakh would increase the base for exemption and increase compliance. Also, exempting the TCS on payments made for education purposes via specified financial institutions will ease the burden on students planning to study abroad with minimal tax compliance processes.
The much-needed ask from senior citizens to increase the withholding tax limit on interest income is accepted and now it is proposed to increase the threshold limit from the existing INR 50,000 to INR 1 lakh. This will leave a larger portion of disposable income in the hands of senior citizens, rather than them having to wait for the refund of taxes paid.
The Finance Minister has proposed extending the scope and coverage of the safe harbour rules to further international transactions with a view to reduce transfer pricing litigation. This will be a win-win for the taxpayer as well as the department and will go a long way to reduce uncertainties in transfer pricing matters.
Munjal AlmoulaHead of Tax
The Finance Minister has announced two major changes for Individual taxpayers:
1. Increase in the amount of rebate available under New Tax Regime for Individuals having taxable income up to INR 12 lakhs. Such taxpayer group is not required to pay any taxes and hence this will lead to tax saving of INR 80,000. If you are salaried individual with total income of INR 12.75 lakhs, due to availability of standard deduction of INR 75,000, you are not required to pay any taxes.
2. Change in tax slab rates under New Tax Regime which will clearly bring tax saving to all class of taxpayers as limit for minimum income subject to tax has been increased from INR 3 lakhs to INR 4 lakhs. Further, 30% tax rate will now trigger at income of above INR 24 lakhs instead of INR 15 lakhs.
There is no change in Old Tax Regime which clearly indicates Government’s agenda to reduce the number of takers of Old Regime. The fine print of New Income-Tax Bill is not yet issued but it indicates the Government intention to follow a single regime of taxation for Individuals aligned with framework of New Regime of taxation.
Preeti Sharma Partner, Tax & Regulatory Services
The Finance Minister announced that the requirements and procedures for speedy approvals of company mergers will be rationalised. Further, it was announced that the scope of fast-track mergers will be widened, and the process will be made simpler. One would need to wait for the guidelines to be released in this respect.
Aakash UppalPartner & Leader (North & East)- Corporate Tax, Tax and Regulatory Services
Based on the proposals, if an individual is earning up to INR 1 lakh a month, no tax is payable in FY 2025-26. This will boost household consumption, savings and investments.
SANTHOSH SIVARAJPartner, Global Employer Services, Tax & Regulatory Services
The tax proposal to conduct transfer pricing audit for a block of three years is a welcome move that has been long overdue. A wider guidance around complex data gathering, inconsistent documentation across jurisdictions, managing fluctuating market conditions, potential for double taxation, disputes over intangible asset valuation, and navigating different tax authority interpretations of the arm's length principle would pave the way for tax certainly and enhance ease of doing business in India.
Lalit AttalPartner, Tax & Regulatory Services
In line with the Government’s objective to improve the ease of doing business, the scope of fast-track mergers to be expanded. This will facilitate consolidations and reduce timelines for mergers and acquisitions
The determination of Arm’s Length Price of international related party transactions using a ‘Block of 3 Years’ is a welcome step and brings India closer to the international best practices. This eases out the annual Transfer Pricing compliance burden on several multinational enterprises operating in India, leading to simplified arm’s length price determination and reduction in potential year-on-year litigation.
Rajiv BhutaniPartner, Transfer Pricing, Tax & Regulatory Services
Transfer pricing compliances to be reduced significantly by allowing taxpayers having international transactions to determine the ALP for the international transactions over a block period covering 3 years. This will reduce compliance burdens for taxpayers and ease documentation maintenance.
Munjal AlmoulaHead of Tax
The new tax code will be drafted with a view of removing uncertainties. It is expected to be simpler, crisper and articulated in simple language to avoid ambiguity and interpretation issues. The intent is to avoid needless litigation and provide greater certainty to taxpayers.
Munjal AlmoulaHead of Tax
The motto of 'Trust first and Scrutinise later' coupled with the announcement of measures for light touch regulatory framework including further decriminalisation of provisions, shows the Government's continued efforts to improve the ease of doing business.
The ability to declare material facts related to imported goods, if missed at the time of import, with the option to pay duty along with interest and without any levy of penalty voluntarily where tax authorities have not identified them, would reduce litigations and promote ease of doing business.
Swati AgarwalPartner, Indirect Tax
Reduction in customs duty slab rates would lead to reduction in classification related disputes and increase ease of doing business for importers.
Deepthi AlexanderPartner, Indirect Tax,
Removal of Social Welfare Surcharge on imported goods is expected to reduce cost of import and encourage domestic manufacturing across sectors.
Deepthi AlexanderPartner, Indirect Tax
Rationalization of customs tariff structure proposed in the Union Budget to address inverted duty structure to help give fillip to domestic manufacturing and exports.
Karthik ManiPartner, Indirect Tax, BDO India
Reduction in customs duty slab rates would lead to reduction in classification related disputes and increase ease of doing business for importers.
Deepthi AlexanderPartner, Indirect Tax
To boost destination-based and medical tourism in India, streamlining of e-visa scheme and e-visa fee waiver are proposed. This would ease visa norms, promote sustainable travel to India and measures to enhance visa consular services.
Deepashree ShettyPartner, Global Employer Services, Tax & Regulatory Services
Scope of fast-track mergers to be expanded to reduce timeline for consolidations
The Hon'ble Finance Minister, in the Union Budget 2025, has announced that DTC will be released next week. This is a much-awaited reform and should lead to simplification of the existing tax law which is more than 60 years old and has become complex.
Relaxation in fast-track merger provisions will help entities to opt for fast-track route which will reduce the timelines and compliance required as compared to NCLT route of merger.
Anish ShahPartner, M&A Tax and Regulatory Services
The much-awaited reform in the insurance sector has been announced by the Hon’ble FM of extending 100% FDI in the insurance sector. It is a welcome step for opening the insurance sector for foreign players and addressing the stress over solvency of insurance companies. This move will ensure penetration of insurance, thereby paving the path for insurance for all by 2047.”
MANOJ PUROHITPartner, FS Tax, Tax and Regulatory Services
Framework of bilateral investment treaties to be modified to encourage higher foreign investments
National Manufacturing Mission to support domestic clean tech manufacturing of EV batteries, solar PV cells, wind turbines, etc. is a step closer to moving from thermal to green energy. This also aligns with Government’s vision of Make in India and sustainable future solutions like green manufacturing and Electric Vehicles (EVs)
Maulik ManakiwalaPartner, Indirect Tax
Government to increase its commitment by Rs.10,000 crore to setup New Fund of Funds (FoF) to encourage startups in AIF. The FoF for startups with commitments for over Rs 9 lakh crore will encourage the new startups to pool capital via the booming AIF sector.”
Increase in Credit guarantee for MSME startups from Rs.10 crore to Rs.20 crore will promulgate the much need ask from the startup sector in larger chunk of capital infusion. Also, the banking sector will aid to expand their lending capacity to such startup companies.
The Government’s increasing focus on travel and tourism is helping boost the overall economy. Performance Linked Incentives for states will help improve the overall hospitality network and increase focus on medical, spiritual and historic tourism. Such measures will help in increasing the indirect tax collections and forex reserves.
Maulik ManakiwalaPartner, Indirect Tax
National framework would be issued for setting up Global Capability Centres (GCCs), which the state governments shall adopt and implement in Tier 2 cities to help in the employment and growth of GCCs in India.
Karthik ManiPartner, Indirect Tax
‘Trust first, scrutinize next’, simplified cargo clearance and customs processes proposed in the Union Budget will help increase India’s export competitiveness.
Export promotion mission focusing on sectors by inter-ministerial co-ordination and providing a unified platform for trade documentation, as well as financial solutions aligned with international practices would act as booster for the export target of the country.
Rahul DutiaPartner, Indirect Tax, BDO India
National Centre for Skilling with international collaboration is a much-needed reform to bridge the gap between skills currently possessed by the workforce and skills needed in advanced manufacturing technologies, leading to the furtherance of the ‘Make in India’ initiative and increase India’s share in manufacturing of value-added products.
Rajitha Boorugu Partner, Indirect Tax
Budget announcements sound exciting - Simplification of litigation for Aam tax payers – Trust First Scrutinise Later
Santhosh SivarajPartner, Global Employer Services, Tax & Regulatory Services
Proposal to extend the interest cap on interest subvention scheme will enhance the base for banking sector and bring in the smaller lot of consumers. The banks will also benefit by expanding the book size of their small loans.
“Significant increase in limits of turnover and investment for classification as MSME would facilitate a lot of companies to get classified as MSMEs and thereby become eligible for MSME benefits, including access to credit. This measure, coupled with setting up of a new Fund of Funds, with additional funding to start-ups is likely to fuel further growth for start-ups/early stage companies”
Nitesh MehtaPartner, M&A Tax and Regulatory Services
“The Focus Product Scheme proposed in the Union Budget 2025 for non-leather footwear sector will help manufacturers, whose competitiveness has been severely curtailed by increasing domestic manufacturing costs and thin margin.”