As India gears up for Union Budget 2025, all eyes are on Finance Minister Nirmala Sitharaman, who will present the budget on February 1, 2025. This is the second full budget of the Modi government since its re-election in 2024 and is expected to introduce tax reliefs, sectoral reforms, and economic stimulus measures.
Here’s a detailed breakdown of what to expect across different sectors in Budget 2025.
How Will Budget 2025 Impact the Defence Sector?
The defense sector anticipates a moderate budget hike as part of India’s ongoing military modernization plans.
- Last year, the FY2024-25 defense budget stood at ₹6.22 lakh crore, marking a 4.79% increase from the previous year.
- Analysts predict a capital expenditure rise to ₹1.9 lakh crore, focusing on:
- Mobility vehicles for rapid deployment.
- Naval infrastructure development to strengthen maritime defense.
- Indigenous arms and technology under Atmanirbhar Bharat.
With growing regional security concerns, the government is expected to prioritize domestic manufacturing and joint defense collaborations.
Will Budget 2025 Bring More Retirement Savings Benefits?
Experts expect changes in National Pension System (NPS) tax deductions to encourage more people to save for retirement.
- Higher NPS tax deduction limits may be introduced.
- Relaxation of withdrawal rules to improve flexibility for retirees.
Additionally, electric vehicle (EV) adoption incentives may see a boost, with clarifications on perquisite taxation and a potential reinstatement of EV purchase tax deductions.
Will Budget 2025 Offer More Flexibility on House Property Loss Set-Off?
A significant 53% of taxpayers are calling for:
- Allowing house property loss set-off under the new tax regime.
- Removing or increasing the ₹2 lakh loss set-off limit under the old tax regime.
With the rising cost of home loans and property investments, experts believe these reforms could boost real estate growth and affordability.
Will Budget 2025 Lower Income Tax Rates?
Taxpayers are hoping for income tax relief, and early reports suggest possible reforms:
- 57% of individuals demand lower tax rates to increase disposable income.
- 72% have opted for the new tax regime, but 63% still prefer more incentives under the old regime.
- Possible introduction of:
- Tax-free income slab up to ₹10 lakh.
- New 25% tax slab for earnings between ₹15 lakh – ₹20 lakh.
If these changes are implemented, it could significantly reduce the tax burden on middle-class earners.
How Will Budget 2025 Affect Telecom and Digital Infrastructure?
The Cellular Operators Association of India (COAI) has submitted key budget recommendations, including:
1️⃣ Faster Disposal of Appeals – Introducing timelines for resolving tax appeals.
2️⃣ Clarity on Service Tax Liabilities – Exemptions on License Fees (LF) and Spectrum Usage Charges (SUC).
3️⃣ Extending Business Loss Carry-Forward – Increasing the period from 8 years to 16 years.
4️⃣ Reduction in License Fees – Proposal to cut the current 3% fee to just 1%.
These measures could help telecom operators sustain profitability amid 5G rollout costs.
What Are the Hospitality Sector’s Demands in Budget 2025?
The hospitality industry has requested:
- GST reduction to make Indian tourism more competitive.
- Easier access to affordable loans for hotel expansion.
- Infrastructure status for smaller hotel projects.
With global tourism rebounding, these measures could boost employment and revenue in India’s tourism industry.
How Will Budget 2025 Drive Infrastructure Growth?
Infrastructure is set to be a key focus, with:
- ₹11.11 trillion allocated in the last budget (11.1% YoY increase).
- Continued investment in:
- Highways and railways for seamless logistics.
- Urban infrastructure and smart cities.
- Public-private partnerships (PPPs) to ease government burden.
Challenges like land acquisition delays and project cost overruns may also be addressed with new reforms.
Will Budget 2025 Simplify Customs Duty and Boost Manufacturing?
The government is considering customs duty reforms to:
- Reduce the number of customs slabs (currently over 40).
- Simplify tax structures to boost domestic manufacturing.
- Resolve issues related to duty inversion and trade disputes.
A proposal for a three-tier duty system (0%, 5%, and 10%) has been suggested to:
✅ Enhance India’s global competitiveness.
✅ Attract investments, particularly in electronics and manufacturing.
✅ Reduce red tape in international trade.
FAQs
What are the top tax reliefs expected in Budget 2025?
Taxpayers anticipate lower income tax rates, increased exemptions, and flexibility in set-off limits for house property losses.
Will the new tax regime become mandatory?
While the new tax regime is gaining popularity, the government may enhance incentives to make it more appealing.
How will Budget 2025 impact retirees?
Potential NPS tax deduction hikes and relaxed withdrawal rules may encourage more retirement savings.
Will there be more incentives for electric vehicles (EVs)?
Experts predict a possible reinstatement of EV tax deductions and more clarity on perquisite taxation.
How will defense spending change in Budget 2025?
The defense budget is expected to increase to ₹1.9 lakh crore, focusing on mobility vehicles and naval infrastructure.
What telecom reforms are expected?
COAI has recommended reducing license fees, extending loss carry-forward periods, and simplifying tax liabilities.
What customs reforms are expected?
A new three-tier customs duty system (0%, 5%, and 10%) is being proposed to simplify trade and boost manufacturing.
How will Budget 2025 help the hospitality sector?
Industry leaders want GST reductions, better access to loans, and infrastructure recognition for smaller hotels.
Final Thoughts: What Will Budget 2025 Deliver?
With economic stability, fiscal discipline, and growth-friendly policies at its core, Budget 2025 is expected to:
✔ Ease tax burdens on individuals and businesses.
✔ Boost defense, infrastructure, and manufacturing sectors.
✔ Encourage investment in telecom and EV industries.
✔ Support hospitality and tourism industries for global competitiveness.
As the countdown to February 1, 2025 begins, stay tuned for live updates and expert insights on Budget 2025 announcements.
🚀 Bookmark this page and follow real-time coverage to stay ahead of key budget updates!
