Union Budget 2025 – Key Aspects & Proposals related to Taxation

Growth: The Economic Survey 2024-25 projected a real GDP growth for FY26 between 6.3% to 6.8%.
Revenue highlights: FY26 (BE) over FY25 (RE):
▪ Gross Tax Revenue (GTR) growth budgeted at 10.8%.
▪ Net tax receipts (net to centre) budgeted to grow at 11%.
▪ Gross direct tax growth budgeted at 12.7%.
▪ Gross indirect tax growth budgeted at 8.3%.
Expenditure priorities:
▪ The Government of India’s capital expenditure has been kept at INR11.2 lakh crore for FY26 (BE) or 3.1% of GDP for infrastructure investment.
▪ Allocation of INR1.5 lakh crore for long -term interest-free loans for states.
▪ Revenue expenditure growth is budgeted at 6.7% in FY26 (BE).
Continuing focus on fiscal consolidation:
▪ Fiscal deficit for FY25 (RE) improved to 4.8% of the GDP as against 4.9% budgeted earlier.
▪ Fiscal deficit for FY26 (BE) budgeted at 4.4% of the GDP.
The Budget seeks a healthy balance between fiscal consolidation and boosting consumption.

Key Proposals related to Direct Taxation

Key Proposals related to GST and Custom Law

MSME Sector:

•To achieve higher efficiencies of scale, technological upgradation and better access to capital, the investment and turnover limits for classification of all MSMEs has been enhanced to 2.5 and 2 times respectively

Revision in classification criteria for MSMEs: