New Delhi: 2025/02/01:
Hon’ble Speaker, present the Budget for 2025-26
Introduction
1.
This Budget continues our Government’s efforts to:
a)
accelerate growth,
b)
secure inclusive development,
c)
invigorate private sector investments,
d)
uplift household sentiments, and
e)
enhance spending power of India’s rising middle class.
2.
Together, we embark on a journey to unlock our nation’s tremendous
potential for greater prosperity and global positioning under the leadership of
Hon’ble Prime Minister Shri Narendra Modi.
3.
As we complete the first quarter of the 21st century,
continuing geopolitical headwinds suggest
lower global economic growth over the
medium term. However, our aspiration for a Viksit Bharat inspires us, and the
transformative work we have done during our Government’s first two terms guides
us, to march forward resolutely.
Budget Theme
4.
Our economy is the fastest-growing among all major global economies. Our
development track record of the past 10 years and structural reforms have drawn
global attention. Confidence in India’s capability and potential has only grown
in this period. We see the next five years as a unique opportunity to realize
‘Sabka Vikas’, stimulating balanced growth
of all regions.
5.
The great Telugu
poet and playwright Gurajada Appa Rao had said, ‘Desamante Matti Kaadoi,
Desamante Manushuloi’; meaning, ‘A country is not just its soil, a country
is its people.’ In line with this, for us, Viksit Bharat, encompasses:
a) zero-poverty;
b) hundred per cent good quality school education;
c) access to high-quality, affordable, and comprehensive healthcare;
d) hundred per cent skilled labour with meaningful employment;
e) seventy per cent women in economic activities; and
f) farmers making our country the ‘food basket of the world’.
6.
In this Budget,
the proposed development measures span ten broad areas focusing on Garib,
Youth, Annadata and Nari.
1)
Spurring
Agricultural Growth and Productivity;
2)
Building Rural
Prosperity and Resilience;
3)
Taking Everyone
Together on an Inclusive Growth path;
4)
Boosting
Manufacturing and Furthering Make in India;
5)
Supporting MSMEs;
6)
Enabling
Employment-led Development;
7)
Investing in
people, economy and innovation;
8)
Securing Energy
Supplies;
9)
Promoting
Exports; and
10)
Nurturing
Innovation.
7.
For this journey of development,
a)
Our four powerful
engines are: Agriculture, MSME, Investment, and Exports
b)
The fuel: our
Reforms
c)
Our guiding
spirit: Inclusivity
d)
And the
destination: Viksit Bharat
8.
This Budget aims
to initiate transformative reforms across six domains. During the next five
years, these will augment our growth potential and global competitiveness. The
domains are:
1)
Taxation;
2)
Power Sector;
3)
Urban
Development;
4)
Mining;
5)
Financial Sector;
and
6)
Regulatory
Reforms.
Agriculture as the 1st Engine
9.
Now I move to
specific proposals, beginning with ‘Agriculture as the 1st Engine’.
Prime Minister Dhan-Dhaanya Krishi Yojana -
Developing Agri Districts Programme
10.
Motivated by the
success of the Aspirational Districts Programme, our Government will undertake
a ‘Prime Minister Dhan-Dhaanya Krishi Yojana’ in partnership with
states. Through the convergence of existing schemes and specialized measures,
the programme will cover 100 districts with low productivity, moderate crop
intensity and below-average credit parameters. It aims to (1) enhance
agricultural productivity, (2) adopt crop diversification and sustainable
agriculture practices, (3) augment post-harvest storage at the panchayat and
block level, (4) improve irrigation facilities, and (5) facilitate availability
of long-term and short-term credit. This programme is likely to help 1.7 crore
farmers.
Building Rural Prosperity and Resilience
11.
A comprehensive
multi-sectoral ‘Rural Prosperity and Resilience’ programme will be launched in
partnership with states. This will address under-employment in agriculture
through skilling, investment, technology, and invigorating the rural economy.
The goal is to generate ample opportunities in rural areas so that migration is
an option, but not a necessity.
12.
The programme
will focus on rural women, young farmers, rural youth, marginal and small
farmers, and landless families. Details are in Annexure A.
13.
Global and
domestic best practices will be incorporated and appropriate technical and
financial assistance will be sought from multilateral development banks. In
Phase-1, 100 developing agri-districts will be covered.
Aatmanirbharta in
Pulses
14.
Our Government is
implementing the National Mission for Edible Oilseed for achieving
atmanirbhrata in edible oils. Our farmers have the capability to grow enough
for our needs and more.
15.
Ten years ago, we
made concerted efforts and succeeded in achieving near self-sufficiency in
pulses. Farmers responded to the need by increasing the cultivated area by 50
per cent and Government arranged for procurement and remunerative prices. Since
then, with rising incomes and better affordability, our consumption of pulses
has increased significantly.
16.
Our Government
will now launch a 6-year “Mission for Aatmanirbharta in Pulses” with a special
focus on Tur, Urad and Masoor. Details
are in Annexure B. Central agencies (NAFED and NCCF) will be ready to procure
these 3 pulses, as much as offered during the next 4 years from farmers who
register with these agencies and enter into agreements.
Comprehensive
Programme for Vegetables & Fruits
17.
It is encouraging
that our people are increasingly becoming aware of their nutritional needs. It
is a sign of a society becoming healthier. With rising income levels, the
consumption of vegetables, fruits and shree-anna is increasing significantly. A
comprehensive programme to promote production, efficient supplies, processing,
and remunerative prices for farmers will be launched in partnership with
states. Appropriate institutional mechanisms for implementation and
participation of farmer producer organizations and cooperatives will be set
up.
Makhana Board in
Bihar
18.
For this, there
is a special opportunity for the people of Bihar. A Makhana Board will be
established in the state to improve production, processing, value addition, and
marketing of makhana. The people engaged in these activities will be organized
into FPOs. The Board will provide handholding and training support to makhana
farmers and will also work to ensure they receive the benefits of all relevant Government
schemes.
National Mission
on High Yielding Seeds
19.
A National
Mission on High Yielding Seeds will be launched, aimed at (1) strengthening the
research ecosystem, (2) targeted development and propagation of seeds with high
yield, pest resistance and climate resilience, and (3) commercial availability
of more than 100 seed varieties released since July 2024.
Fisheries
20.
India ranks
second-largest globally in fish production and aquaculture. Seafood exports are
valued at ` 60
thousand crore. To unlock the untapped potential of the marine sector, our Government
will bring in an enabling framework for sustainable harnessing of fisheries
from Indian Exclusive Economic Zone and High Seas, with a special focus on the
Andaman & Nicobar and Lakshadweep Islands.
Mission for
Cotton Productivity
21.
For the benefit
of lakhs of cotton growing farmers, I am pleased to announce a ‘Mission for
Cotton Productivity’. This 5-year mission will facilitate significant
improvements in productivity and sustainability of cotton farming, and promote
extra-long staple cotton varieties. The best of science & technology
support will be provided to farmers. Aligned with our integrated 5F vision for
the textile sector, this will help in increasing incomes of the farmers, and
ensure a steady supply of quality cotton for rejuvenating India’s traditional
textile sector.
Enhanced Credit
through KCC
22.
Kisan Credit
Cards (KCC) facilitate short term loans for 7.7 crore farmers, fishermen, and
dairy farmers. The loan limit under the Modified Interest Subvention Scheme
will be enhanced from `
3 lakh to 5 lakh for loans taken through the KCC.
Urea Plant in
Assam
23.
For Atmanirbharta
in urea production, our Government had reopened three dormant urea plants in
the Eastern region. To further augment urea supply, a plant with annual
capacity of 12.7 lakh metric tons will be set up at Namrup, Assam.
India Post as a Catalyst for the Rural Economy
24.
India Post with 1.5 lakh rural post offices, complemented by the India
Post Payment Bank and a vast network of 2.4 lakh Dak Sevaks, will be
repositioned to act as a catalyst for the rural economy. Details are at
Annexure C.
25.
India Post will
also be transformed as a large public logistics organization. This will meet
the rising needs of Viswakarmas, new entrepreneurs, women, self-help groups,
MSMEs, and large business organizations.
Support to NCDC
26.
Our Government
will provide support to NCDC for its lending operations for the cooperative
sector.
MSMEs as the 2nd engine
27.
Now, I move to
MSMEs as the 2nd engine, which encompasses manufacturing and
services with a focus on MSMEs numbering 5.7 crore.
Revision in classification
criteria for MSMEs
28.
Currently, over 1 crore registered MSMEs, employing 7.5 crore people, and
generating 36 per cent of our manufacturing, have come together to position
India as a global manufacturing hub. With their quality products, these MSMEs
are responsible for 45 per cent of our exports. To help them achieve higher
efficiencies of scale, technological upgradation and better access to capital,
the investment and turnover limits for classification of all MSMEs will be
enhanced to 2.5 and 2 times respectively. This will give them the confidence to
grow and generate employment for our youth. The details are in Annexure D.
Significant
enhancement of credit availability with guarantee cover
29.
To improve access
to credit, the credit guarantee cover will be enhanced:
a)
For Micro and
Small Enterprises, from `
5 crore to 10 crore, leading to additional credit of ` 1.5 lakh crore in the next 5 years;
b)
For Startups,
from ` 10 crore
to 20 crore, with the guarantee fee being moderated to 1 per cent for loans in
27 focus sectors important for Atmanirbhar Bharat; and
c)
For well-run
exporter MSMEs, for term loans up to ` 20 crore.
Credit Cards for
Micro Enterprises
30.
We will introduce
customized Credit Cards with a `
5 lakh limit for micro enterprises registered on Udyam portal. In the first
year, 10 lakh such cards will be issued.
Fund of Funds for
Startups
31.
The Alternate
Investment Funds (AIFs) for startups have received commitments of more than ` 91,000 crore. These are supported by the Fund of Funds set up
with a Government contribution of ` 10,000 crore. Now, a new Fund of Funds, with expanded scope and a
fresh contribution of another
` 10,000
crore will be set up.
Scheme
for First-time Entrepreneurs
32.
A new scheme will
be launched for 5 lakh women, Scheduled Castes and Scheduled Tribes first-time
entrepreneurs. This will provide term loans up
to ` 2 crore during
the next 5 years. The scheme will incorporate lessons from the successful
Stand-Up India scheme. Online capacity building for entrepreneurship and
managerial skills will also be organized.
Measures for
Labour-Intensive Sectors
33.
To promote
employment and entrepreneurship opportunities in labour-intensive sectors, our Government
will undertake specific policy and facilitation measures.
Focus Product
Scheme for Footwear & Leather Sectors
34.
To enhance the
productivity, quality and competitiveness of India’s footwear and leather
sector, a focus product scheme will be implemented. The scheme will support
design capacity, component manufacturing, and machinery required for production
of non-leather quality footwear, besides the support for leather footwear and
products. The scheme is expected to facilitate employment for 22 lakh persons,
generate turnover of `
4 lakh crore and exports of over ` 1.1
lakh crore.
Measures for the
Toy Sector
35.
Building on the
National Action Plan for Toys, we will implement a scheme to make India a
global hub for toys. The scheme will focus on development of clusters, skills,
and a manufacturing ecosystem that will create high-quality, unique,
innovative, and sustainable toys that will represent the 'Made in India' brand.
Support for Food
Processing
36.
In line with our
commitment towards ‘Purvodaya’, we will establish a National Institute of Food
Technology, Entrepreneurship and Management in Bihar. The institute will
provide a strong fillip to food processing activities in the entire Eastern
region. This will result in (1) enhanced income for the farmers through value
addition to their produce, and (2) skilling, entrepreneurship and employment
opportunities for the youth.
Manufacturing
Mission - Furthering “Make in India”
37.
Our Government
will set up a National Manufacturing Mission covering small, medium and large
industries for furthering “Make in India” by providing policy support,
execution roadmaps, governance and monitoring framework for central ministries
and states. Details are in Annexure E.
Clean Tech
Manufacturing
38.
Given our
commitment to climate-friendly development, the Mission will also support Clean
Tech manufacturing. This will aim to improve domestic value addition and build
our ecosystem for solar PV cells, EV batteries, motors and controllers,
electrolyzers, wind turbines, very high voltage transmission equipment and grid
scale batteries.
Investment as the 3rd engine
39.
Now, I move to
Investment as the 3rd engine, which encompasses investing in people,
investing in the economy and investing in innovation.
A.
Investing in
People
Saksham Anganwadi
and Poshan 2.0
40.
The Saksham
Anganwadi and Poshan 2.0 programme provides nutritional support to more than 8
crore children, 1 crore pregnant women and lactating mothers all over the
country, and about 20 lakh adolescent girls in aspirational districts and the
north-east region. The cost norms for the nutritional support will be enhanced
appropriately.
Atal Tinkering Labs
41.
Fifty thousand
Atal Tinkering Labs will be set up in Government schools in next 5 years to
cultivate the spirit of curiosity and innovation, and foster a scientific
temper among young minds.
Broadband
Connectivity to Government Secondary Schools and PHCs
42.
Broadband
connectivity will be provided to all Government secondary schools and primary
health centres in rural areas under the Bharatnet project.
Bharatiya Bhasha
Pustak Scheme
43.
We propose to
implement a Bharatiya Bhasha Pustak Scheme to provide digital-form Indian
language books for school and higher education. This aims to help students
understand their subjects better.
National Centres of Excellence for Skilling
44.
Building on the
initiative announced in the July 2024 Budget, five National Centres of
Excellence for skilling will be set up with global expertise and partnerships
to equip our youth with the skills required for “Make for India, Make for the
World” manufacturing. The partnerships will cover curriculum design, training
of trainers, a skills certification framework, and periodic reviews.
Expansion of
Capacity in IITs
45.
Total number of
students in 23 IITs has increased 100 per cent from 65,000 to 1.35 lakh in the
past 10 years. Additional infrastructure will be created in the 5 IITs started
after 2014 to facilitate education for 6,500 more students. Hostel and other
infrastructure capacity at IIT, Patna will also be expanded.
Centre of
Excellence in AI for Education
46.
I had announced
three Centres of Excellence in Artificial Intelligence for agriculture, health,
and sustainable cities in
2023. Now a Centre of Excellence in Artificial Intelligence for education will
be set up with a total outlay of `
500 crore.
Expansion of
medical education
47.
Our Government
has added almost 1.1 lakh UG and PG medical education seats in ten years, an
increase of 130 per cent. In the next year, 10,000 additional seats will be
added in medical colleges and hospitals, towards the goal of adding 75,000
seats in the next 5 years.
Day Care Cancer
Centres in all District Hospitals
48.
Our Government will facilitate setting up of Day Care Cancer Centres in
all district hospitals in the next 3 years. 200 Centres will be established in
2025-26.
Strengthening
urban livelihoods
49.
Our Government
has been giving priority to assisting urban poor and vulnerable groups. A
scheme for socio-economic upliftment of urban workers will be implemented to
help them improve their incomes, have sustainable livelihoods and a better
quality of life.
PM SVANidhi
50.
PM SVANidhi
scheme has benefitted more than 68 lakh street vendors giving them respite from
high-interest informal sector loans. Building on this success, the scheme will
be revamped with enhanced loans from banks, UPI linked credit cards with ` 30,000 limit, and capacity building support.
Social Security
Scheme for Welfare of Online Platform Workers
51.
Gig workers of
online platforms provide great dynamism to the new-age services economy. Recognising their contribution, our Government
will arrange for their identity cards and registration on the e-Shram portal.
They will be provided healthcare under PM Jan Arogya Yojana. This measure is
likely to assist nearly 1 crore gig-workers.
B.
Investing in the
Economy
Public Private
Partnership in Infrastructure
52.
Each
infrastructure-related ministry will come up with a 3-year pipeline of projects
that can be implemented in PPP mode. States will also be encouraged to do so
and can seek support from the IIPDF (India Infrastructure Project Development
Fund) scheme to prepare PPP proposals.
Support to States
for Infrastructure
53.
An outlay of ` 1.5 lakh crore is proposed for the 50-year interest free loans to
states for capital expenditure and incentives for reforms.
Asset
Monetization Plan 2025-30
54.
Building on the
success of the first Asset Monetization Plan announced in 2021, the second Plan
for 2025-30 will be launched to plough back capital of ` 10 lakh crore in new projects. Regulatory and fiscal measures
will be fine-tuned to support the Plan.
Jal Jeevan
Mission
55.
Since 2019, 15
crore households representing 80 per cent of India’s rural population have been
provided access to potable tap water connections. To achieve 100 per cent
coverage, I am pleased to announce the extension of the Mission until 2028 with
an enhanced total outlay.
56.
The Mission’s
focus will be on the quality of infrastructure and O&M of rural piped water
supply schemes through “Jan Bhagidhari”. Separate MoUs will be signed with
states/UTs, to ensure sustainability and citizen-centric water service
delivery.
Urban Sector
Reforms
57.
Building on the
July Budget proposals, urban sector reforms related to governance, municipal
services, urban land, and planning will be incentivized.
Urban Challenge
Fund
58.
The Government
will set up an Urban Challenge Fund of ` 1 lakh crore to implement the proposals for ‘Cities as Growth
Hubs’, ‘Creative Redevelopment of Cities’ and ‘Water and Sanitation’ announced
in the July Budget.
59.
This fund will
finance up to 25 per cent of the cost of bankable projects with a stipulation
that at least 50 per cent of the cost is funded from bonds, bank loans, and
PPPs. An allocation of ` 10,000 crore is proposed for 2025-26.
Power Sector
Reforms
60.
We will
incentivize electricity distribution reforms and augmentation of intra-state
transmission capacity by states. This will improve financial health and
capacity of electricity companies. Additional borrowing of 0.5 per cent of GSDP
will be allowed to states, contingent on
these reforms.
Nuclear Energy
Mission for Viksit Bharat
61.
Development of at
least 100 GW of nuclear energy by 2047 is essential for our energy transition
efforts. For an active partnership with the private sector towards this goal,
amendments to the Atomic Energy Act and the Civil Liability for Nuclear Damage
Act will be taken up.
62.
A Nuclear Energy
Mission for research & development of Small Modular Reactors (SMR) with an outlay
of ` 20,000
crore will be set up. At least 5
indigenously developed SMRs will be operationalized by 2033.
Shipbuilding
63.
The Shipbuilding
Financial Assistance Policy will be revamped to address cost disadvantages.
This will also include Credit Notes for shipbreaking in Indian yards to promote
the circular economy.
64.
Large ships above
a specified size will be included in the infrastructure harmonized master list
(HML).
65.
Shipbuilding
Clusters will be facilitated to increase the range, categories and capacity of
ships. This will include additional infrastructure facilities, skilling and
technology to develop the entire ecosystem.
Maritime
Development Fund
66.
For long-term
financing for the maritime industry, a Maritime Development Fund with a corpus
of ` 25,000
crore will be set up. This will be for distributed support and promoting
competition. This will have up to 49 per cent contribution by the Government,
and the balance will be mobilized from ports and private sector.
UDAN - Regional
Connectivity Scheme
67.
UDAN has enabled
1.5 crore middle-class people to meet their aspirations for speedier travel.
The scheme has connected 88 airports and operationalized 619 routes. Inspired
by that success, a modified UDAN scheme will be launched to enhance regional
connectivity to 120 new destinations and carry 4 crore passengers in the next
10 years. The scheme will also support
helipads and smaller airports in hilly, aspirational, and North East region
districts.
Greenfield
Airport in Bihar
68.
Greenfield
airports will be facilitated in Bihar to meet the future needs of the State.
These will be in addition to the expansion of the capacity of Patna airport and
a brownfield airport at Bihta.
Western Koshi
Canal Project in Mithilanchal
69.
Financial support
will be provided for the Western Koshi Canal ERM Project benefitting a large
number of farmers cultivating over 50,000 hectares of land in the Mithilanchal
region of Bihar.
Mining Sector
Reforms
70.
Mining sector
reforms, including those for minor minerals, will be encouraged through sharing
of best practices and institution of a State Mining Index.
71.
A policy for recovery of critical minerals from tailings will be brought
out.
SWAMIH Fund 2
72.
Under the Special
Window for Affordable and Mid-Income Housing (SWAMIH) fifty thousand dwelling
units in stressed housing projects have been completed, and keys handed over to
home-buyers. Another forty thousand units will be completed in 2025, further helping
middle-class families who were paying EMIs on loans taken for apartments, while
also paying rent for their current dwellings.
73.
Building on this
success, SWAMIH Fund 2 will be established as a blended finance facility with
contribution from the Government, banks and private investors. This fund of ` 15,000 crore will aim for expeditious completion of another 1
lakh units.
PM Gati Shakti
Data for Private Sector
74.
For furthering
PPPs and assisting the private sector in project planning, access to relevant
data and maps from the PM Gati Shakti portal will be provided.
Tourism for
employment-led growth
75.
Top 50 tourist
destination sites in the country will be developed in partnership with states
through a challenge mode. Land for building key infrastructure will have to be
provided by states. Hotels in those destinations will be included in the
infrastructure HML.
76.
The following
measures will be taken for facilitating employment-led growth:
1)
Organizing
intensive skill-development programmes for our youth including in Institutes of
Hospitality Management;
2)
Providing MUDRA
loans for homestays;
3)
Improving ease of
travel and connectivity to tourist destinations;
4)
Providing
performance-linked incentives to states for effective destination management
including tourist amenities, cleanliness, and marketing efforts; and
5)
Introducing
streamlined e-visa facilities along with visa-fee waivers for certain tourist
groups.
77.
Continuing with
the emphasis on places of spiritual and religious significance in the July
Budget, there will be a special focus on destinations related to the life and
times of Lord Buddha.
Medical Tourism
and Heal in India
78.
Medical Tourism
and Heal in India will be promoted in partnership with the private sector along
with capacity building and easier visa norms.
C. Investing in Innovation
Research,
Development and Innovation
79.
To implement
private sector driven Research, Development and Innovation initiative announced
in the July Budget, I am now allocating
` 20,000
crore.
Deep Tech Fund of
Funds
80.
A Deep Tech Fund
of Funds will also be explored to catalyze the next generation startups as a
part of this initiative.
PM Research
Fellowship
81.
In the next five
years, under the PM Research Fellowship scheme, we will provide ten thousand
fellowships for technological research in IITs and IISc with enhanced financial
support.
Gene Bank for
Crops Germplasm
82.
The 2nd
Gene Bank with 10 lakh germplasm lines will be set up for future food and
nutritional security. This will provide conservation support to both public and
private sectors for genetic resources.
National
Geospatial Mission
83.
We will start a
National Geospatial Mission to develop foundational geospatial infrastructure
and data. Using PM Gati Shakti, this Mission will facilitate modernization of
land records, urban planning, and design of infrastructure projects.
Gyan Bharatam
Mission
84.
A Gyan Bharatam
Mission for survey, documentation and conservation of our manuscript heritage
with academic institutions, museums, libraries and private collectors will be
undertaken to cover more than 1 crore manuscripts. We will set up a National
Digital Repository of Indian knowledge systems for knowledge sharing.
85.
Now, I move to
Exports as the 4th engine.
Exports as the 4th engine
Export Promotion Mission
86.
We will set up an
Export Promotion Mission, with sectoral and ministerial targets, driven jointly
by the Ministries of Commerce, MSME, and Finance. It will facilitate easy
access to export credit, cross-border factoring support, and support to MSMEs
to tackle non-tariff measures in overseas markets.
BharatTradeNet
87.
A digital public
infrastructure, ‘BharatTradeNet’ (BTN) for international trade will be set-up
as a unified platform for trade documentation and financing solutions. This
will complement the Unified Logistics Interface Platform. The BTN will be
aligned with international practices.
Support for integration
with Global Supply Chains
88.
Support will be
provided to develop domestic manufacturing capacities for our economy’s
integration with global supply chains. Sectors will be identified based on
objective criteria.
89.
Facilitation
groups with participation of senior officers and industry representatives will
be formed for select products and supply chains.
90.
Through this, there are huge opportunities
related to Industry 4.0, which needs high skills and talent. Our youth have
both. Our Government will support the domestic electronic equipment industry to
leverage this opportunity for the benefit of the youth.
National
Framework for GCC
91.
A national
framework will be formulated as guidance to states for promoting Global
Capability Centres in emerging tier 2 cities. This will suggest measures for
enhancing availability of talent and infrastructure, building-byelaw reforms,
and mechanisms for collaboration with industry.
Warehousing facility for air cargo
92.
Our Government
will facilitate upgradation of infrastructure and warehousing for air cargo
including high value perishable horticulture produce. Cargo screening and
customs protocols will be streamlined and made user-friendly.
Reforms as the Fuel
93.
Now I move to
‘Reforms as the Fuel’, and detail specific reforms.
Tax Reforms
94.
Over the past 10 years, our Government has implemented several reforms
for convenience of tax payers, such as (1) faceless assessment, (2) tax payers
charter, (3) faster returns, (4) almost 99 per cent returns being on
self-assessment, and (5) Vivad se Vishwas scheme. Continuing these efforts,
I reaffirm the commitment of the tax department to “trust first, scrutinize
later”. I also propose to introduce the new income-tax bill next week. I will
detail the indirect tax reforms and changes in direct taxes in Part B.
Financial Sector Reforms and Development
95.
The FDI limit for
the insurance sector will be raised from 74 to 100 per cent. This enhanced
limit will be available for those companies which invest the entire premium in
India. The current guardrails and conditionalities associated with foreign
investment will be reviewed and simplified.
Expanding Services of India Post Payment Bank
96.
The services of
India Post Payment Bank will be deepened and expanded in rural areas.
Credit Enhancement Facility by NaBFID
97.
NaBFID will set
up a ‘Partial Credit Enhancement Facility’ for corporate bonds for
infrastructure.
Grameen Credit Score
98.
Public Sector
Banks will develop ‘Grameen Credit Score’ framework to serve the credit needs
of SHG members and people in rural areas.
Pension Sector
99.
A forum for
regulatory coordination and development of pension products will be set up.
KYC
Simplification
100.
To implement the
earlier announcement on simplifying the KYC process, the revamped Central KYC
Registry will be rolled out in 2025. We will also implement a streamlined
system for periodic updating.
Merger of
Companies
101.
Requirements and
procedures for speedy approval of company mergers will be rationalized. The
scope for fast-track mergers will also be widened and the process made simpler.
Bilateral
Investment Treaties
102.
As proposed in
the Interim Budget, we signed Bilateral Investment Treaties (BIT) with two
countries in 2024. To encourage sustained foreign investment and in the spirit
of ‘first develop India’, the current model BIT will be revamped and made more
investor-friendly.
Regulatory
Reforms
103.
In the last ten
years in several aspects, including financial and non-financial, our Government
has demonstrated a steadfast commitment to ‘Ease of Doing Business’. We are
determined to ensure that our regulations must keep up with technological
innovations and global policy developments. A light-touch regulatory framework
based on principles and trust will unleash productivity and employment. Through
this framework, we will update regulations that were made under old laws. To
develop this modern, flexible, people-friendly, and trust-based regulatory
framework appropriate for the twenty-first century, I propose four specific
measures:
High Level Committee
for Regulatory Reforms
104.
A High-Level
Committee for Regulatory Reforms will be set up for a review of all
non-financial sector regulations, certifications, licenses, and permissions.
The committee will be expected make recommendations within a year. The
objective is to strengthen trust-based economic governance and take
transformational measures to enhance ‘ease of doing business’, especially in
matters of inspections and compliances.
States will be encouraged to join in this endeavour.
Investment Friendliness Index of States
105.
An Investment
Friendliness Index of States will be launched in 2025 to further the spirit of
competitive cooperative federalism.
FSDC Mechanism
106.
Under the
Financial Stability and Development Council, a mechanism will be set up to
evaluate impact of the current financial regulations and subsidiary
instructions. It will also formulate a framework to enhance their
responsiveness and development of the financial sector.
Jan Vishwas Bill 2.0
107.
In the Jan
Vishwas Act 2023, more than 180 legal provisions were decriminalized. Our Government
will now bring up the Jan Vishwas Bill 2.0 to decriminalize more than 100
provisions in various laws.
108.
Now I move to
fiscal policy matters.
Fiscal
Consolidation
109.
In the July
Budget, I had committed to staying the course for fiscal consolidation. Our
endeavour will be to keep the fiscal deficit each year such that the Central
Government debt remains on a declining path as a percentage of the GDP. The
roadmap for the next 6 years has been detailed in the FRBM statement.
Revised
Estimates 2024-25
110.
The Revised Estimate of the total receipts other than borrowings is
` 31.47 lakh crore, of
which the net tax receipts
are ` 25.57 lakh crore. The
Revised Estimate of the total expenditure is
` 47.16 lakh crore, of which the capital
expenditure is about
` 10.18 lakh crore.
111.
The Revised
Estimate of the fiscal deficit is 4.8 per cent of GDP.
Budget Estimates 2025-26
112.
Coming to
2025-26, the total receipts other than borrowings and the total expenditure are estimated
at ` 34.96 lakh crore
and ` 50.65 lakh crore
respectively. The net tax receipts are estimated at ` 28.37 lakh crore.
113.
The fiscal
deficit is estimated
to be 4.4 per cent of
GDP.
114.
To finance the
fiscal deficit, the net market borrowings from dated securities are estimated
at ` 11.54 lakh
crore. The balance financing is expected to come from small savings and other
sources. The gross market borrowings are estimated at ` 14.82 lakh crore.
I will now move
to Part B.
PART
B
Indirect Taxes
115.
My proposals
relating to Customs aim to rationalize tariff structure and address duty
inversion. These will also support domestic manufacturing and value addition,
promote exports, facilitate trade and provide relief to common people.
Rationalisation of Customs Tariff Structure
for Industrial Goods
116.
As a part of
comprehensive review of Customs rate structure announced in July 2024 Budget, I
propose to:
(i)
remove seven
tariff rates. This is over and above the seven tariff rates removed in 2023-24
budget. After this, there will be only eight remaining tariff rates including
‘zero’ rate.
(ii)
apply appropriate
cess to broadly maintain effective duty incidence except on a few items, where
such incidence will reduce marginally.
(iii)
levy not more
than one cess or surcharge. Therefore, I propose to exempt Social Welfare
Surcharge on 82 tariff lines that are subject to a cess.
117.
I shall now take
up sector specific proposals.
Relief on import
of Drugs/Medicines
118.
To provide relief to patients, particularly
those suffering from cancer, rare diseases and other severe chronic diseases, I
propose to add 36 lifesaving drugs and medicines to the list of medicines fully
exempted from Basic Customs Duty (BCD).
I also propose to add 6 lifesaving medicines to the list attracting
concessional customs duty of 5%. Full exemption and concessional duty will also
respectively apply on the bulk drugs for manufacture of the above.
119.
Specified drugs
and medicines under Patient Assistance Programmes run by pharmaceutical
companies are fully exempt from BCD, provided the medicines are supplied free of
cost to patients. I propose to add 37 more medicines along with 13 new patient
assistance programmes.
Support to
Domestic Manufacturing and Value addition
Critical Minerals
120.
In the July 2024
Budget, I had fully exempted BCD on 25 critical minerals that are not
domestically available. I had also reduced BCD of 2 other such minerals to
provide a major fillip to their processing especially by MSMEs. Now, I propose
to fully exempt cobalt powder and waste, the scrap of lithium-ion battery,
Lead, Zinc and 12 more critical minerals. This will help secure their
availability for manufacturing in India and promote more jobs for our youth.
Textiles
121.
To promote domestic production of technical
textile products such as agro-textiles, medical textiles and geo textiles at
competitive prices, I propose to add two more types of shuttle-less looms to
the list of fully exempted textile machinery.
I also propose to revise the BCD rate on knitted fabrics covered by nine
tariff lines from “10% or 20%” to “20% or ` 115 per kg, whichever is higher”.
Electronic Goods
122.
In line with our
‘Make in India’ policy, and to rectify inverted duty structure, I propose to
increase the BCD on Interactive Flat Panel Display (IFPD) from 10% to 20% and
reduce the BCD to 5% on Open Cell and other components.
123.
In 2023 -24
Budget, for the manufacture of Open Cells of LCD/LED TVs, I had reduced the BCD
on parts of Open Cells from 5% to 2.5% . To further boost the manufacture of
such Open Cells, the BCD on these parts will now stand exempted.
Lithium Ion Battery
124.
To the list of
exempted capital goods, I propose to add 35 additional capital goods for EV
battery manufacturing, and 28 additional capital goods for mobile phone battery
manufacturing. This will boost domestic manufacture of lithium-ion battery,
both for mobile phones and electric vehicles.
Shipping Sector
125.
Considering
that shipbuilding has a long gestation period, I propose to continue the
exemption of BCD on raw materials, components, consumables or parts for the
manufacture of ships for another ten years. I also propose the same
dispensation for ship breaking to make it more competitive.
Telecommunication
126.
To prevent
classification disputes, I propose to reduce the BCD from 20% to 10% on Carrier
Grade ethernet switches to make it at par with Non-Carrier Grade ethernet
switches.
Export Promotion
Handicraft Goods
127. To
facilitate exports of handicrafts, I propose to
extend the time period for export from six months to one year, further
extendable by another three months, if
required. I also propose to add nine items to the list of duty-free inputs.
Leather sector
128. I propose to fully exempt BCD on Wet Blue
leather to facilitate imports for domestic value addition and employment. I
also propose to exempt crust leather from 20% export duty to facilitate exports
by small tanners.
Marine products
129. To enhance India's competitiveness in the global
seafood market, I propose to reduce BCD from 30% to 5% on Frozen Fish Paste
(Surimi) for manufacture and export of its analogue products. I also propose to
reduce BCD from 15% to 5% on fish hydrolysate for manufacture of fish and shrimp feeds.
Domestic MROs for Railway Goods
130. In
July 2024 Budget, to promote development of domestic MROs for aircraft and
ships, I had extended the time limit for export of foreign origin goods that
were imported for repairs, from 6 months to one year and further extendable by
one year. I now propose to extend the
same dispensation for railway goods.
Trade facilitation
Time limit for Provisional Assessment
131.
Presently, the Customs Act, 1962 does not provide any time limit to finalize
Provisional Assessments leading to uncertainty and cost to trade. As a measure
of promoting ease of doing business, I propose to fix a time-limit of two
years, extendable by a year, for finalising the provisional assessment.
Voluntary
Compliance
132. I
propose to introduce a new provision that will enable importers or exporters,
after clearance of goods, to voluntarily declare material facts and pay duty
with interest but without penalty. This will incentivise voluntary compliance. However, this will not apply in cases where
department has already initiated audit or investigation proceedings.
Extended Time for End Use
133. For industry to better plan their imports,
I propose to extend the time limit for the end-use of imported inputs in the
relevant rules, from six months to one year. This will provide operational
flexibility in view of cost and uncertainty of supply. Further, such importers
will now have to file only quarterly statements instead of a monthly statement.
Direct
Taxes
I now come to my Direct
tax proposals.
134.
In Part A, I have briefly underlined Taxation
Reforms as one of key reforms to realize our vision of Viksit Bharat. In respect of criminal law, Our Government
had earlier ushered in Bharatiya Nyaya Sanhita replacing Bharatiya Danda
Sanhita. I am happy to inform this August House and the country that the new
income-tax bill will carry forward the same spirit of “Nyaya”. The new bill
will be clear and direct in text with close to half of the present law, in
terms of both chapters and words. It will be simple to understand for taxpayers
and tax administration, leading to tax certainty and reduced litigation.
135.
Reforms,
however, are not a destination. They are a means to achieve good governance for
our people and economy. Providing good governance primarily involves being
responsive. The Thirukkural captures this in Verse 542, which reads:
வானோக்கி வாழும் உலகெல்லாம் மன்னவன்
கோல்நோக்கி
வாழுங்
குடி.
vaanokki vaalum
ulakellaam mannavan
koalnokki vaalung kuti
Meaning:
Just as living beings live expecting rains,
Citizens live expecting good governance.
Our Government
is committed to keeping an ear to the ground and a finger on the pulse, and
responding while balancing our nation-building efforts. The following measures
will detail just how our Government under the guidance of PM Modi has taken
steps to understand and address the needs voiced by our citizens. My tax
proposals are guided by this spirit.
136.
The objectives
of my proposals are as follows:
(i)
Personal
Income Tax reforms with special focus on middle class
(ii)
Rationalization
of TDS/TCS for easing difficulties
(iii)
Encouraging
voluntary compliance
(iv)
Reducing
compliance burden
(v)
Ease of doing
business
(vi)
Employment and
investment
I will come to
my proposal on personal income tax towards the end.
TDS/TCS rationalization for easing difficulties
137.
I propose to
rationalize Tax Deduction at Source (TDS) by reducing the number of rates and
thresholds above which TDS is deducted. Further, threshold amounts for tax
deduction will be increased for better clarity and uniformity. The limit for
tax deduction on interest for senior citizens is being doubled from the present
` 50,000 to ` 1 lakh. Similarly, the annual limit of ` 2.40 lakh for TDS on rent is being increased to ` 6 lakh. This will reduce the number of transactions
liable to TDS, thus benefitting small tax payers receiving small payments.
138.
The threshold
to collect tax at source (TCS) on remittances under RBI’s Liberalized
Remittance Scheme (LRS) is proposed to be increased from ` 7 lakh to ` 10 lakh. I also
propose to remove TCS on remittances for education purposes, where such
remittance is out of a loan taken from a specified financial institution.
139.
Both TDS and
TCS are being applied on any transaction relating to sale of goods. To prevent
such compliance difficulties, I propose to omit the TCS. I also propose that
the provisions of the higher TDS deduction will now apply only in non-PAN
cases.
140.
In July 2024, the delay for payment of TDS up
to the due date of filing statement was decriminalized. I propose to provide
the same relaxation to TCS provisions as well.
Encouraging Voluntary Compliance
141.
The Government
under the leadership of Prime Minister Modi believes in “Sabka Saath, Sabka
Vikas, Sabka Vishwas and Sabka Prayas”. In line with this, we brought in
updated return facility in 2022 for voluntary compliance by taxpayers who had
omitted to report their correct income. Our trust in taxpayers was proved
right. Nearly 90 lakh taxpayers voluntarily updated their incomes by paying
additional tax. Taking this trust further, I now propose to extend the
time-limit to file updated returns for any assessment
year, from the current limit of two years, to four years.
Reducing Compliance Burden
142.
I propose to
reduce the compliance burden for small charitable trusts/institutions by
increasing their period of registration from 5 years to 10 years. It is also
proposed that disproportionate consequences do not arise for minor defaults,
such as incomplete applications filed by charitable entities.
143.
Presently
tax-payers can claim the annual value of self-occupied properties as nil only
on the fulfilment of certain conditions. Considering the difficulties faced by
taxpayers, it is proposed to allow the benefit of two such self-occupied
properties without any condition.
Ease of Doing Business
144.
To streamline
the process of transfer pricing and to provide an alternative to yearly
examination, I propose to introduce a scheme for determining arm's length price
of international transaction for a block period of three years. This will be in
line with global best practices.
145.
With a view to
reduce litigation and provide certainty in international taxation, the scope of
safe harbour rules is being expanded.
146.
A number of
senior and very senior citizens have very old National Savings Scheme accounts.
As interest is no longer payable on such accounts, I propose to exempt
withdrawals made from NSS by individuals on or after the 29th of August, 2024.
I am also proposing to allow similar treatment to NPS Vatsalya accounts as is
available to normal NPS accounts, subject to overall limits.
147.
In my speech
in July 2024, I had promised that all processes including giving effect to
appellate orders shall be digitalized and made paper-less over the next two
years. I am happy to announce that digitalization is being made operational.
148.
In July 2024,
we brought in the Vivad Se Vishwas Scheme to resolve income tax disputes
pending in appeal. The scheme has received a great response, with nearly 33,000
tax payers having availed of this scheme to settle their disputes.
Employment and Investment
149.
I have a few
proposals to promote investment and employment.
Tax certainty for electronics manufacturing Schemes
150.
It is proposed
to provide a presumptive taxation regime for non-residents who provide services
to a resident company that is establishing or operating an electronics
manufacturing facility. I further propose to introduce a safe harbour for tax
certainty for non-residents who store components for supply to specified
electronics manufacturing units.
Tonnage Tax Scheme for Inland Vessels
151.
Presently the
tonnage tax scheme is available to only sea going ships. The benefits of
existing tonnage tax scheme are proposed to be extended to inland vessels
registered under the Indian Vessels Act, 2021 to promote inland water transport
in the country.
Extension for incorporation of Start-Ups
152.
We continue to
support the Indian start-up eco-system. I propose
to extend the period of incorporation by 5 years to allow the benefit available
to start-ups which are incorporated before 1.4.2030.
International
Financial Services Centre (IFSC)
153.
In order to
attract and promote additional activities in the IFSC, I am inter alia
proposing specific benefits to ship-leasing units, insurance offices and
treasury centres of global companies which are set up in IFSC. Further, to claim benefits, the cut-off date
for commencement in IFSC has also been extended by five years to 31.3.2030.
Alternate
Investment Funds (AIFs)
154.
Category I and
category II AIFs are undertaking investments in infrastructure and other such
sectors. I propose to provide certainty of taxation to these entities on the
gains from securities.
Extension of investment date for Sovereign and Pension Funds
155.
To promote
funding from Sovereign Wealth Funds and Pension Funds to the infrastructure
sector, I propose to extend the date of making an investment by five more
years, to 31st March, 2030.
Personal Income- tax Reforms with special focus on
middle class
156.
Democracy,
Demography and Demand are the key support pillars in our journey towards Viksit
Bharat. The middle class provides strength for India’s growth. This Government
under the leadership of Prime Minister Modi has always believed in the
admirable energy and ability of the middle class in nation building. In
recognition of their contribution, we have periodically reduced their tax
burden. Right after 2014, the ‘Nil tax’ slab was raised to
` 2.5 lakh, which was further raised to ` 5 lakh in 2019 and to
` 7 lakh in 2023. This is reflective of our Government’s trust on the
middle-class tax payers. I am now happy to announce that there will be no
income tax payable upto income of ` 12 lakh (i.e. average income of ` 1 lakh per month
other than special rate income such as capital gains) under the new regime.
This limit will be ` 12.75 lakh for salaried tax payers, due to standard
deduction of ` 75,000.
157.
Slabs and
rates are being changed across the board to benefit all tax-payers. The new
structure will substantially reduce the taxes of the middle class and leave
more money in their hands, boosting household consumption, savings and
investment.
158.
In the new tax regime, I propose to revise tax
rate structure as follows:
|
0-4 lakh rupees |
Nil |
|
4-8 lakh rupees |
5 per cent |
|
8-12 lakh rupees |
10 per cent |
|
12-16 lakh rupees |
15 per cent |
|
16-20 lakh rupees |
20 per cent |
|
20- 24 lakh rupees |
25 per cent |
|
Above 24 lakh rupees |
30 per cent |
159.
To tax payers
upto ` 12 lakh of normal income (other than special rate income such as
capital gains) tax rebate is being provided in addition to the benefit due to
slab rate reduction in such a manner that there is no tax payable by them. The
total tax benefit of slab rate changes and rebate at different income levels
can be illustrated with examples. A tax payer in the new regime with an income
of ` 12 lakh will get a benefit of ` 80,000 in tax (which is 100% of tax payable as per existing
rates). A person having income of ` 18 lakh will get a benefit of ` 70,000 in tax (30% of
tax payable as per existing rates).
A person with an income of ` 25 lakh gets a benefit of ` 1,10,000 (25% of his
tax payable as per existing rates).
160.
Details of my
tax proposals are given in the Annexure.
161.
As a result of
these proposals, revenue of about ₹ 1 lakh crore in direct taxes and ₹ 2600
crore in indirect taxes will be forgone.
Mr. Speaker
Sir, with this, I commend the budget to this august House.
Jai Hind.
Annexures to Part A
Annexure
A
Building Rural
Prosperity and Resilience
The programme
will focus at:
1)
catalyzing
enterprise development, employment and financial independence for rural women;
2)
accelerating
creation of new employment and businesses for young farmers and rural youth;
3)
nurturing
and modernizing agriculture for productivity improvement and warehousing,
especially for marginal and small farmers; and
4)
diversifying
opportunities for landless families.
Annexure
B
Mission
for Aatmanirbharta in Pulses
The Mission will
place emphasis on:
1)
development
and commercial availability of climate resilient seeds,
2)
enhancing
protein content,
3)
increasing
productivity,
4)
improving
post-harvest storage and management, and
5)
assuring
remunerative prices to the farmers.
Annexure
C
India Post as a
Catalyst for the Rural Economy
The expanded
range of services will include:
1)
rural
community hub colocation;
2)
institutional
account services;
3)
DBT,
cash out and EMI pick-up;
4)
credit
services to micro enterprises;
5)
insurance;
and
6)
assisted
digital services.
Annexure D
Annexure
E
Manufacturing
Mission - Furthering “Make in India
The Mission’s
mandate will include 5 focus areas:
1)
ease
and cost of doing business;
2)
future
ready workforce for in-demand jobs;
3)
a
vibrant and dynamic MSME sector;
4)
availability
of technology; and
5)
quality
products.
Annexure to Part B
Amendments relating to Indirect Taxes
|
A. LEGISLATIVE CHANGES IN CUSTOMS LAWS |
|
A.1 Amendments in the Customs Act, 1962 (i)
A new sub-section (1B) is being inserted in
Section 18 to provide time limit of two years for finalization of provisional
assessment. It also provides that this time limit may be extended by the
Commissioner of Customs for a further period of one year if sufficient cause
is shown. It further provides that, for the pending cases, the time-limit
shall be computed from the date of assent of the Finance Bill, 2025. (ii)
A new sub-section (1C) is being inserted to provide for certain grounds
on which the time-limit of two years for finalizing provisional assessment
shall remain suspended. (iii)
A new section 18A is being inserted for
voluntary revision of entry after clearance of goods to allow importers and
exporters to revise any entry made in relation to the goods within a
prescribed time and subject to conditions as may be prescribed. It also
provides for treating such revised entry as self-assessment and allow payment
of duty or treat the revised entry as a refund claim under section 27. It
further provides for certain cases where this section will not apply. (iv)
A new Explanation is being inserted in
sub-section 1 of section 27 to clarify that the period of limitation for
claim of refund consequent to the revised entry under section 18A or
amendment under Section 149 of the Customs Act, 1962, shall be one year from
the date of payment of duty or interest. (v)
A new clause is being inserted in Explanation 1 to Section 28 to
provide that the relevant date in the case of payment of duty as per the
revised entry under section 18A is the date of payment of duty or interest. (vi)
A new clause is being inserted after clause (d) and (e) of section 127A
to define Interim Board, Member of the Interim Board and pending
applications. (vii)
A new sub-section (6) is being inserted after sub-section (5) in
section 127B to provide end date for receipt of applications under this
section. (viii)
A new sub-section (12) is being inserted after sub-section (11) in
section 127C to make applicable the sub-sections of Section 127C of the
Customs Act, 1962 to the Interim Board. (ix)
A new sub-section (3) is being inserted after sub-section (2) in
section 127D clarifying that the powers of Settlement Commission shall be
exercised by the Interim Board and the provisions of this section shall,
mutatis mutandis, apply to the Interim Board as they apply to the Settlement
Commission. (x)
A new sub-section (5) is being inserted after sub-section (4) of
section 127F providing that the powers and functions of Settlement Commission
shall be exercised or performed by the Interim Board. (xi)
A Proviso to section 127G of the Customs Act, 1962 is being inserted to
provide that the powers and functions of Settlement Commission under this
section shall be exercised or performed by the Interim Board. (xii)
A new sub-section (4) is being inserted after sub-section (3) in
section 127H of the Customs Act, 1962 to provide that the powers and
functions of Settlement Commission under this section shall be exercised or
performed by the Interim Board. These changes shall
come into effect from date of assent to the Finance Bill, 2025 A.2 Amendments in the Customs Tariff Act,
1975 a) The First
Schedule to the Customs Tariff Act, 1975 is being amended to, -
(i)
revise
tariff rates on certain industrial tariff items
(ii)
add 178 new
tariff entries in chapter 10, 20, 27, 28, 29, 38 and 71 and substitute/delete
63 tariff entries; insert supplementary notes in chapter 10, 20, 29 and 38
and amend 2 supplementary notes. This is to align the tariff lines with WCO
classification and better identification of goods. These changes shall
come into effect from 1.5.2025. |
|
B. LEGISLATIVE
CHANGES IN GST LAWS [Save as otherwise provided, these
changes will be brought into effect from a date to be notified in
coordination with States, as per recommendations of the GST council] |
|
AMENDMENT FOR TRADE FACILITATION B.1 Amendments in section 2 of the CGST Act,
2017:
a) Clause (61) is being amended to
explicitly provide for distribution of input tax credit by the Input Service Distributor
in respect of inter-state supplies on which tax has to be paid on reverse
charge basis, by inserting reference to sub-section (3) and sub-section (4)
of section 5 of Integrated Goods and Services Tax Act. This amendment will be
effective from 1st April, 2025. b) Clause (69) (c) is being amended to
insert an Explanation to provide for definitions of the terms 'Local Fund'
and 'Municipal Fund' used in the definition of "local authority"
under the said clause so as to clarify the scope of the said terms. c) A new clause (112A) is being inserted to
provide definition of Unique Identification Marking for implementation of
Track and Trace Mechanism B.2 Amendments in Section 12
and 13 of the CGST Act, 2017 Sub-section (4) of Section 12 and
Sub-section (4) of Section 13 relating to time of supply in respect of
vouchers are being omitted. B.3 Amendments in Section 17
of the CGST Act, 2017 Clause (d) of sub-section (5) is being
amended to substitute the words "plant or machinery" with the words
"plant and machinery" with effect from 1st July, 2017. B.4 Amendments in Section 20 of the CGST Act,
2017 Section 20(1) and Section 20(2) are
being amended to explicitly provide for distribution of input tax credit by
the Input Service Distributor in respect of inter-state supplies, on which
tax has to be paid on reverse charge basis, by inserting reference to
sub-section (3) and sub-section (4) of section 5 of Integrated Goods and
Services Tax Act in sub-section (1) of section 20. The amendment will be
effective from 1st April, 2025.
B.5 Amendments in
Section 34 of the CGST Act, 2017 The Proviso to sub-section (2) is being
amended to explicitly provide for requirement of reversal of corresponding
input tax credit in respect of a credit-note, if availed, by the registered
recipient, for the purpose of reduction of tax liability of the supplier in
respect of the said credit note. B.6 Amendments in Section 38 of the CGST Act,
2017 a) Section 38(1) is being amended to omit
the expression "auto-generated". b) Section 38(2) is being amended to omit
the expression "auto-generated" and to insert the expression
"including" after the words "by the recipient" in clause
(b) to make the said clause more inclusive. c) Section 38(2) is also being amended to
insert a new clause (c) to provide an enabling clause to prescribe other
details to be made available in statement of input tax credit. B.7 Amendments in Section 39 of the CGST Act,
2017 Section 39(1) is being amended to
provide an enabling clause to prescribe certain conditions and restriction
for filing of return. B.8. Amendments in Section 107 and 112 of
the CGST Act, 2017 a) Section 107(6) is being amended to
provide for 10% mandatory pre-deposit of penalty amount for appeals before
Appellate Authority in cases involving only demand of penalty without any
demand for tax. b) Section 112(8) is amended to provide for
10% mandatory pre-deposit of penalty amount for appeals before Appellate
Tribunal in cases involving only demand of penalty without any demand for
tax. B.9 Insertion of a new section 122B of the CGST Act,
2017 A new Section 122B is being inserted to
provide penalties for contraventions of provisions related to the Track and
Trace Mechanism provided under section 148A. B.10 Insertion of a new section 148A of the
CGST Act, 2017 Section 148A is being inserted to
provide for enabling mechanism for a Track and Trace Mechanism for specified
commodities.
B.11 Amendments in
Schedule III of the CGST Act,2017 Schedule III is being amended, w.e.f. 01.7.2017 to,₋ a) insert
a new Entry (aa) in paragraph 8 to provide that the supply of goods
warehoused in a Special Economic Zone or in a Free Trade Warehousing Zone to
any person before clearance for exports or to the Domestic Tariff Area shall
be treated neither as supply of goods nor as supply of services. b)
Amend Explanation 2, w.e.f.
01.07.2017 to clarify that the said explanation would be applicable in
respect of entry (a) of paragraph 8. c) Insert
Explanation 3 to define the terms 'Special Economic Zone', 'Free Trade
Warehousing Zone' and 'Domestic Tariff Area', for the purpose of the proposed
entry (aa) in paragraph 8. d) To provide that no refund of tax already
paid will be available for the transactions referred above. |
|
C.1 Special
Provision for Exemption from Service Tax in Certain Cases: Services provided or agreed to be
provided by insurance companies by way of reinsurance services under the
Weather Based Crop Insurance Scheme (WBCIS) and the Modified National
Agricultural Insurance Scheme (MNAIS), are being exempted from service tax for the period
commencing from 1st April, 2011 and ending with 30th
June, 2017. |
D. CUSTOMS
DUTY RATE CHANGES
D.1. Reduction
in customs duty to reduce input costs, deepen value addition, promote export
competitiveness, correct inverted duty structure, boost domestic manufacturing
etc [with effect from 2.2.2025]
|
S. No. |
Commodity |
From (per cent) |
To (per cent) |
|
I. |
Aquafarming & Marine exports |
||
|
1. |
Frozen fish paste (surimi) for manufacture of surimi analogue products
for export |
30 |
5 |
|
2. |
Fish hydrolysate for manufacture of aquatic feed |
15 |
5 |
|
II. |
Chemicals |
||
|
1. |
Other compounds containing a pyrimidine ring
(whether or not hydrogenated) or piperazine ring in the structure classified
under tariff sub heading 2933 59 |
10 |
7.5 |
|
2. |
Synthetic flavouring essences and mixtures
of odoriferous substances of a kind used in food or drink industries
classified under tariff sub heading 3302 10 |
100 |
20 |
|
3. |
Sorbitol classified
under tariff subheading 3824 60 |
30 |
20 |
|
III. |
Waste and Scrap of Critical
Minerals and others |
||
|
1. |
Waste and scrap of
Antimony, Beryllium, Bismuth, Cobalt, Cadmium, Molybdenum, Rhenium, Tantalum,
Tin, Tungsten, Zirconium, Copper scrap covered under tariff items 74040012,
74040019 and 74040022 |
10/5/2.5 |
Nil |
|
2. |
Waste and scrap of
Lithium-Ion Battery |
5 |
Nil |
|
3. |
Cobalt powder |
5 |
Nil |
|
4. |
Waste and scrap of Lead |
5 |
Nil |
|
5. |
Waste and scrap Zinc |
5 |
Nil |
|
IV. |
Drugs and Medicines |
||
|
1. |
Addition of 6 more
medicines in List 3 and bulk drugs for their manufacture |
As applicable |
5 |
|
2. |
Addition of 36 more medicines
in List 4 and bulk drugs for their manufacture |
As applicable |
Nil |
|
3. |
Addition of 37 more
medicines and 13 Patient Assistance Programmes in the list of duty free
imports by pharmaceutical companies for supply free of cost to patients |
As applicable |
Nil |
|
V. |
Precious Metals |
||
|
1. |
Platinum findings |
25 |
6.4 (5 BCD + 1.4 AIDC) |
|
VI. |
Textile,
Handicraft and Leather Sector |
||
|
1. |
Wet blue leather |
10 |
Nil |
|
2. |
Shuttle less loom
Rapier Looms (below 650 meters per minute) and Shuttle less loom Air jet
Looms (below 1000 meters per minute) for use in textile industry |
7.5 |
Nil |
|
3. |
Certain additional
items for duty free import by bonafide exporters for manufacture of
handicrafts |
As
applicable |
Nil |
|
VII. |
Capital Goods |
||
|
1. |
Addition of 35
capital goods/machinery for use in the manufacture of lithium-ion battery of
EVs and 28 capital goods/machinery for use in the manufacture of lithium-ion battery
of mobile phones |
As applicable |
Nil |
|
VIII. |
IT and Electronics |
||
|
1. |
Inputs/ parts and
sub-parts of PCBA, camera module, connectors and inputs or raw materials for
use in manufacture of wired headset, microphone and receiver, USB cable,
fingerprint reader/ sensor of cellular mobile phone |
2.5 |
Nil |
|
2. |
Specified inputs/parts
(chip on film, PCBA, glass board / substrate cell) for use in manufacture of
open cells of TV panels of LED/LCD TV |
2.5 |
Nil |
|
3. |
Ethernet Switches
Carrier-Grade |
20 |
10 |
|
4. |
Open cell (with or
without touch) for interactive Flat Panel Display module, Touch Glass sheet
and Touch Sensor PCB for use in manufacture of Interactive Flat Panel Display
module |
15/10 |
5 |
|
IX. |
Space Sector |
||
|
1. |
Ground installation
for satellites including its spares and consumables |
As applicable |
Nil |
|
2. |
Goods used in the
building of launch vehicles and launching of satellites |
5 |
Nil |
|
X. |
Motorcycles |
||
|
1. |
(i)
Engine capacity not exceeding 1600 CC (CBU) (ii)
Semi-knocked down (SKD) (iii)
Completely knocked down (CKD) |
50 25 15 |
40 20 10 |
|
2 |
(i)
Engine capacity 1600 CC &
above (CBU) (ii)
Semi-knocked down (SKD) (iii)
Completely knocked down (CKD) |
50 25 15 |
30 20 10 |
D.2. Increase
in Customs duty [with effect from 02.02.2025]
|
S. No. |
Commodity
|
Rate of duties |
|
|
From (per cent) |
To (per cent) |
||
|
I. |
Textiles |
||
|
1. |
Knitted Fabrics
covered under tariff items 6004 10 00, 6004 90 00, 6006 22 00, 6006 31 00,
6006 32 00, 6006 33 00, 6006 34 00, 6006 42 00 and 6006 90 00 |
10/20 |
20 or Rs 115 per kg, whichever is higher |
|
II |
Electronics |
||
|
1 |
Interactive Flat
Panel Display classified under tariff item 8528 59 00 (CBU) |
10 |
20 |
D.3. Decrease in Tariff
rate with no change in Effective rate [With effect from 02.02.2025]
|
S.
No. |
Commodity |
Rate
of duties |
|
|
From (per
cent) |
To (per
cent) |
||
|
1. |
Glycerol crude,
glycerol waters, glycerol lye covered by tariff item 1520 00 00 |
30
|
20
|
|
2. |
Phosphoric Acid |
20 |
7.5 |
|
3. |
Other – Prepared
Binders, chemical products and preparations of chemical or allied industries
covered under tariff item 3824 99 00 |
17.5 |
7.5 |
|
4. |
Marble and
travertine, granite, crude or roughly trimmed, merely cut into blocks, slabs
and other (tariff sub heading 2515 12 and tariff items, 2525 11 00, 2516 11
00, 2516 12 00) |
40
|
20 (+20
AIDC) |
|
5. |
Candles, tapers and
the like covered by tariff heading 3406 |
25 (+2.5
SWS) |
20 (+7.5
AIDC) |
|
6. |
Other reference
materials |
30 |
10 |
|
7. |
PVC flex films
including PVC flex banner and PVC flex sheets (tariff headings 3920, 3921) |
25 (+2.5
SWS) |
20 (+7.5
AIDC) |
|
8. |
Footwear covered
under tariff headings 6401 to 6405 |
35 (+3.5
SWS) |
20 (+18.5
AIDC) |
|
9. |
Worked monumental or
building stone and articles thereof under heading 6802 except 6802 99 00 |
40 |
20
|
|
10 |
Marble slabs
classified under tariff items 6802 10 00 , 6802 21 10 , 6802 21 20 , 6802 21
90 , 6802 91 00 and 6802 92 00 |
40 |
20 (+20
AIDC) |
|
11. |
OTS/MR type-flat
rolled products of thickness less than 0.5 mm |
27.5 |
15 |
|
12. |
Other plates,
sheets, strips of thickness less than 0.5mm |
27.5 |
15 |
|
13. |
Flat -rolled products
in coils of thickness greater than or equal to 4.75 mm but not exceeding
10mm |
22.5 |
15 |
|
14. |
Flat-rolled
products in coils of thickness greater than or equal to 3 mm but less than
4.75 mm |
22.5 |
15 |
|
15. |
Flat-rolled
products of stainless steel of width 600mm or more- Other nickel chrome
austenitic type |
22.5 |
15 |
|
16. |
Flat-rolled
products of stainless steel of width 600mm or more- Other sheets and plates |
22.5 |
15 |
|
17. |
Flat-rolled
products of other alloy steel grain oriented |
20 |
15 |
|
18. |
Other tubes or pipe fittings of stainless steel |
25 |
15 |
|
19. |
Other fittings of
iron or steel, non-galvanised |
25 |
15 |
|
20. |
Other structure and
parts of structures of iron and steel |
25 |
15 |
|
21. |
Others-tanks and
drums etc. |
25 |
15 |
|
22. |
Other screws and
bolts w/n with nuts |
25 |
15 |
|
23. |
Threaded nuts |
25 |
15 |
|
24. |
Other non-threaded
articles |
25 |
15 |
|
25. |
Others springs and leaves of
iron/steel |
25 |
15 |
|
26. |
Other cast articles
of iron or steel |
25 |
15 |
|
27. |
Articles of forged or
stamped but not further worked |
25 |
15 |
|
28. |
All other articles of
iron/steel |
25 |
15 |
|
29. |
Solar cells covered
by tariff heading 8541 |
25 (+2.5
SWS) |
20 (+7.5
AIDC) |
|
30. |
Motor cars and other
motor vehicles principally designed for the transport of persons, including
station wagons and racing cars, under tariff heading 8703 >USD 40000 |
125 (tariff rate)
100
BCD + 10 SWS (effective rate) |
70
(tariff rate)
70+
40 AIDC (effective rate) |
|
31. |
Used Motor cars and
other motor vehicles principally designed for the transport of persons,
including station wagons and racing cars, under tariff heading 8703 |
125
(tariff)
125
BCD + 12.5 SWS (effective
rate) |
70
(tariff)
70+
67.5 AIDC (effective
rate) |
|
32. |
Motorcycles
(including mopeds) and cycles fitted with an auxiliary motor, with or
without side-cars under tariff heading 8711 |
100
(tariff) (No
change in effective rate) |
70(tariff) (No
change in effective rate) |
|
33. |
Used Motorcycles
(including mopeds) and cycles fitted with an auxiliary motor, with or
without side-cars under tariff heading 8711 |
100
(tariff)
100
BCD +10 SWS (effective
rate) |
70
(tariff)
70+
40 AIDC (effective
rate) |
|
34. |
Bicycles under tariff
item 8712 00 10 |
35 |
20 (+15
AIDC) |
|
35. |
Yachts and other
vessels for pleasure or sports; rowing boats and canoes covered under tariff
heading 8903 |
25 (+2.5
SWS) |
20 (+7.5
AIDC) |
|
36 |
Electricity meters
for alternating current (Smart Meters) under tariff item 9028 30 10 |
25 (+2.5
SWS) |
20 (+7.5
AIDC) |
|
37 |
Parts of electronic
toys, under tariff item 9503 00 91 for manufacture of electronic toys |
25 BCD + 2.5 SWS |
20 BCD+ 7.5 AIDC |
D.4. Decrease in Tariff rate with reduction in
effective rate [With effect from 02.02.2025]
|
|
Commodity |
Rate
of duties |
|
|
From (per
cent) |
To (per
cent) |
||
|
1. |
Synthetic flavouring
essences and mixtures of odoriferous substances for use in food and drink
industry |
100
|
20 (+2
SWS) |
|
2. |
Sorbitol under tariff
sub-heading 3824 60 |
30 (+3
SWS) |
20 (+2
SWS) |
|
3. |
Articles of jewellery
and parts thereof under tariff heading 7113; articles of goldsmiths’ or
silversmiths’ wares and parts thereof under tariff heading 7114 |
25
|
20
|
|
4. |
Solar module under
tariff heading 8541 |
40 (+4
SWS) |
20 (+20
AIDC) |
|
5. |
Motor vehicles (for passenger)
covered under tariff heading 8702 |
40 (+4
SWS) |
20 (+20
AIDC) |
|
6. |
Motor vehicles (for
goods) covered under tariff heading 8704 |
40 (+4
SWS) |
20 (+20
AIDC) |
|
7. |
Seats (other than
those of heading 9402), whether or not convertible into beds, and parts
thereof, covered under tariff heading 9401 |
25 (+2.5
SWS) |
20 (+5
AIDC) |
|
8. |
Other furniture and
parts thereof covered under tariff heading 9403 |
25 (+2.5
SWS) |
20 (+5
AIDC) |
|
9. |
Mattress supports,
articles of bedding and similar furnishing etc covered under tariff heading
9405 |
25 (+2.5
SWS) |
20 (+5
AIDC) |
|
10. |
Luminaries and light
fittings including searchlights and
spotlights and parts thereof etc |
25 (+2.5
SWS) |
20 (+5
AIDC) |
|
11. |
Parts of electronic
toys, under tariff item 9503 00 91 |
70
|
20 (+20
AIDC) |
|
12. |
Laboratory chemicals
under tariff item 9802 00 00 (other than those attracting 10% BCD on
specified end use) |
150 (+
15 SWS)
|
70 (+
70 AIDC) |
|
13. |
All dutiable articles,
imported by a passenger or a member of a crew in his baggage, under tariff
heading 9803 |
100
(tariff rate)
35+
3.5 SWS (effective rate) |
70
(tariff rate)
35 (effective
rate) |
|
14. |
Dutiable goods
imported for personal use classified under heading 9804 other than those at
10% BCD |
35 (+
3.5 SWS) |
20
|
E. Export duty on Leather
[with effect from 2.2.2025]
|
S. No. |
Commodity
|
Rate of duties |
|
|
From (per cent) |
To (per cent) |
||
|
1 |
Crust Leather (hides and skins) |
20 |
0 |
F. Trade Facilitation
Measures
|
F.1. Increase in
duration for export of handicrafts The duration for export of handicrafts manufactured
from duty free inputs by bonafide exporters is being increased from 6 months
to 1 year, further extendable by 3 months. F.2. Removal of Customs (Import of Goods at
Concessional rate of duty or For Specific End Use) Rules 2022 (IGCR)
condition for import of seeds for use in manufacture of Lab Grown Diamonds The IGCR condition for custom duty exemption on
import of seeds for use in manufacture of rough Lab Grown Diamond is being removed. F.3. Extension of time
limit for export The time limit for
export of foreign origin goods imported for repairs is being extended from 6
months to one year further extendable by one year for railway goods. F.4. Amendment of Customs (Import of Goods at Concessional
Rate of Duty or For Specified End Use
) Rules, 2022 Rules 6 and 7 are
being amended to increase the time limit for fulfilling end use from current
six months to one year and to file only a quarterly statement instead of
monthly statement. |
Note: AIDC – Agriculture Infrastructure and Development Cess; SWS
– Social Welfare Surcharge
G. OTHERS
There are few other changes of minor nature. For details of the
budget proposals, the Explanatory Memorandum and other relevant budget
documents may be referred to.
Annexure to Part B
Amendments relating to Direct Taxes
|
(i) Personal Income-tax reforms with special focus on middle class |
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|
1. Substantial relief is
proposed under the new tax regime with new slabs and tax rates as under: -
2. Rebate on income-tax ·
Resident individual with total income up to ` 7,00,000 do not pay any tax due to rebate
under the new tax regime. It is proposed to increase the rebate for the
resident individual under the new regime so that they do not pay tax if their
total income is up to ` 12,00,000. Marginal
relief as provided earlier under the new tax regime is also applicable for
income marginally higher than ` 12,00,000. ·
A few examples for calculation of tax
benefit are given in the table below:
|
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|
(ii) Rationalization of TDS/TCS for easing difficulties |
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|
1. Rationalization tax deducted at source (TDS) and
tax collected at source (TCS) rates: ·
To reduce
multiplicity of rates and compliance burden, it is proposed to bring down certain
TDS and TCS rates in certain sections as below:
|
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|
·
It is further proposed to increase certain
thresholds for requirement to deduct tax at source or collect tax at source
under certain sections, as below:
|
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|
(iii) Encouraging
voluntary compliance |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
1. Extending the
time-limit to file the updated return: ·
It is proposed to extend the time-limit to
file the updated return from the existing 24 months to 48 months from the end
of the relevant assessment year. The additional tax payable shall be 60% of
the aggregate of tax and interest payable on additional income for filing
updated return during the period of 24 months to 36 months from the end of
relevant assessment year. Additional tax payable shall be 70% of the
aggregate of tax and interest payable for filing updated return during the
period of 36 months to 48 months from the end of relevant assessment year
subject to certain conditions. 2. Obligation to furnish information in
respect of crypto-asset: ·
It is proposed to bring amendment in the Act to
provide for that a prescribed reporting entity in respect of a crypto-asset
shall furnish information in respect of a transaction in such crypto asset,
in a statement as prescribed. It is also proposed to align the definition of
virtual digital asset accordingly. 3. Annual value of the self-occupied property simplified: ·
It is proposed to provide
that the annual value of the property consisting of a house or any part
thereof shall be taken as nil, if the owner occupies it for his own residence
or cannot actually occupy it due to any reason. |
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|
(iv) Reducing
compliance burden |
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|
1. Reduction in
compliance burden by omission of TCS on sale of specified goods: ·
To reduce compliance burden of the taxpayers,
it is proposed to no tax will be collected at source on sale of specified
goods of value of more than fifty lakhs. 2. Removal of higher TDS/TCS for non-filers of return of income: ·
To reduce compliance burden on the
deductor/collector, it is proposed to omit section 206AB and section 206CCA
of the Act. 3. Definition of “forest produce” rationalized: ·
It is proposed to clarify the meaning of
“forest produce” u/s 206C(1) of the Act to remove any ambiguity regarding
definition of the same. ·
It is also proposed that TCS be collected
only on “any other forest produce which is obtained under a forest lease.” |
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|
(v) Ease of doing
business |
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|
1. Extension of time limit u/s 80-IAC for startups: ·
It is proposed to
extend the benefit provided under Section 80-IAC to startups for another
period of five years, i.e. the benefit will be available to eligible
start-ups incorporated before 01.04.2030.
2. Parity in rates of long term capital gain on transfer
of securities by non-resident: ·
It is proposed to
bring parity between the taxation of capital gains on transfer of capital
assets between residents and non-residents being Foreign Institutional
investors, on their income by way of long-term capital gains on transfer of
securities.
3. Simplification of tax provisions for
charitable trusts/institutions: ·
It is proposed to
increase the period of validity of registration of trust or institution from
5 years to 10 years for smaller trusts or institutions. ·
It is proposed to
rationalize the definition of specified violation for cancellation of
registration of trust or institution so as to not apply the same for minor
default such as in-complete applications. ·
It is also
proposed to rationalize the definition of persons making substantial
contribution to a trust or institution for denial of exemption. 4. Rationalization in taxation of business trusts: ·
It is proposed to
provide that the total income of a business trust which is charged to tax at
the maximum marginal rate, shall be subject to the provisions of section 112A
of the Act as well, as it is subject to provisions of section 111A and
section 112 of the Act. 5. Harmonization
of Significant Economic Presence applicability with business connection: ·
It is proposed to
provide that significant economic presence of a non-resident in India shall
not include the transactions or activities which are confined to the purchase
of goods in India for the purpose of export. 6. Bringing
clarity in income on redemption of Unit Linked Insurance Policy: ·
It is proposed to
clarify that the profit and gains from the redemption of unit linked
insurance policies to which exemption under section 10(10D) does not apply,
shall be charged to tax as capital gains. 7. Amendment of definition of ‘capital
asset’: ·
In order to bring
clarity on the chargeability of income arising out of transfer of capital
asset being securities held by an investment fund as referred to in section
115UB of the Act, the definition of capital asset is proposed to be amended. 8. Rationalization of transfer pricing provisions for carrying out
multi-year arm’s length price determination ·
It is proposed to provide that the transfer
pricing provisions for arm’s length price determination in relation to
similar transactions shall now be applicable for a period of 3 years. 9. Exemption from prosecution for delayed payment of TCS: ·
It is proposed to provide for exemption from prosecution to a person
who has failed to pay tax collected at source (TCS) to the credit of the
Central Government, if such payment is made at any time on or before the time
prescribed for filing the quarterly TCS statement. 10. Amendment of definition of ‘capital
asset’: ·
In order to bring
clarity on the chargeability of income arising out of transfer of capital
asset being securities held by an investment fund as referred to in section
115UB of the Act, the definition of capital asset is proposed to be amended. |
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|
(vi) Employment and
Investment |
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|
1. Incentives to IFSC ·
It is proposed that the sunset dates related
to IFSC units for exemptions, deductions and relocation in various sections
shall be extended to 31st March, 2030. ·
It is proposed to exempt the proceeds
received on life insurance policy issued by IFSC insurance intermediary
office without the condition on maximum premium amount. ·
It is proposed to extend the exemption in
section 10(4H) to capital gains for non-resident or a unit of IFSC on
transfer of equity shares of a ship leasing domestic company. ·
It is proposed to extend the exemption in
section 10(34B) to dividend paid by a ship leasing company in IFSC to a unit
of IFSC engaged in ship leasing. ·
It is proposed that any advance or loan
between two group entities, where one of the group entities is set up in IFSC
for undertaking treasury activities or treasury services, shall be excluded
from dividend. ·
It is proposed to provide a simplified safe
harbor regime for investment funds managed by fund manager based in IFSC. It
is further proposed to extend the relaxation of conditions for IFSC units
till 31st March, 2030. ·
It is proposed to provide exemption to any income
accruing or arising to or received by a non-resident as a result of transfer
of non-deliverable forward contracts entered into with any Foreign Portfolio
Investor, being a unit in an International Financial Services Centre, which
fulfills prescribed conditions. ·
It is proposed that transfer of a share or unit or
interest held by a shareholder in an original fund (being a retail scheme or
exchange traded fund regulated under IFSCA Regulations 2022) in consideration
for the share or unit or interest in a resultant fund in a relocation, shall
not be regarded as transfer for the purpose of calculating capital gains. 2. Extension of
date of making investment by Sovereign Wealth Funds, Pension Funds and
others: ·
It is proposed that in the case of person specified
under section 10(23FE) the date of making investment shall be extended from
31st day of March, 2025 to 31st day of March, 2030. ·
It is further proposed that in the case of such
specified person exemption shall be available to long-term capital gains
under said section, even if such capital gains are deemed as short-term
capital gains under section 50AA. 3. Scheme of presumptive taxation extended for
non-resident providing services for electronics manufacturing facility: ·
It is proposed to provide a presumptive taxation
regime for non-residents, engaged in the business of establishing or
operating electronics manufacturing facility or a connected facility for
manufacturing or production of electronic goods, article or thing in India. 4. Extension of Tonnage Tax Scheme to Inland vessels: ·
It is proposed that the benefits of existing tonnage
tax scheme to be extended to inland vessels registered under the Indian
Vessels Act, 2021 to promote Inland Water Transportation in the country.
5. Deduction u/s 80CCD for contributions
made to the NPS Vatsalya: ·
It is proposed to extend
the tax benefits available to the National Pension Scheme (NPS) under
sub-section (1B) of section 80CCD of the Income-tax Act, 1961 to the
contributions made to the NPS Vatsalya accounts, as applicable.
|
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|
(vii) Other
miscellaneous amendments |
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|
1. Exemption from withdrawals from National Savings
Scheme (NSS): ·
It is proposed to
provide exemption to the withdrawals made from National Savings Scheme (NSS)
on or after the 29th day of August, 2024, for any amount deposited under the
scheme and the interest accrued thereon in respect of which a deduction has
been allowed.
2. Increase in the
limits on the income of the employees for the purpose of calculating perquisites: ·
The provisions of
Section 17 are proposed to be amended so that the power to prescribe rules
may be obtained to increase these limits. 3. Extension of exemption to Specified Undertaking of Unit Trust of
India (SUUTI) ·
It is proposed to extend the exemption of
SUUTI created by the Unit Trust of India (Transfer of Undertaking and Repeal)
Act, 2002, to 31st March, 2027. 4. Non applicability of Section 271AAB of the Act: ·
It is proposed that provisions of the
aforesaid section shall not be applicable to a case where search has been
initiated under section 132 on or after the 1st day of
September, 2024. 5. Certain penalties to
be imposed by the Assessing Officer: ·
It is proposed to amend various sections
related to penalty to provide that penalties under these sections shall be
levied by the Assessing Officer, subject to the provisions of the Act
relating to prior approval of Joint Commissioner of Income-tax. 6. Removing date
restrictions on framing the schemes in certain cases: ·
It is proposed that the end date prescribed
for notifying faceless schemes under certain sections may be omitted so as to
provide
that Central Government may issue directions beyond the cut-off date of 31st
day of March, 2025. 7. Extending the processing period of Application seeking immunity
from penalty and prosecution: ·
It is proposed that Assessing Officer shall
pass an order accepting or rejecting the application requesting immunity from
penalty and prosecution, within a period of three months from the end of the
month in which such application is received. 8. Increasing time
limit available to pass order under section 115VP: ·
It is proposed to amend section 115VP to provide that
the order, accepting or rejecting, assessee’s option to opt for tonnage tax
scheme shall be passed before the expiry of three months from the end of the
quarter in which such application was received. 9. Excluding the
period such as court stay etc. for calculating time limit to pass an order: ·
It is proposed to exclude certain time period such as
period of stay on proceedings by any court order, etc. from the time limit to
pass an order deeming a person to be an assessee in default with respect of
failure to collect TCS. 10. Time limit to impose penalties rationalized: ·
It is proposed that any order imposing a
penalty shall not be passed after the expiry of six months from the end of
the quarter in which the connected proceedings are completed, or the order of
appeal is received. 11. Clarification regarding commencement date and the end date of the
period stayed by the Court: ·
It is proposed to amend the relevant
sections of the Act to clarify the commencement date and the end date of the
period stayed by an order or injunction of any court. 12. Time limit for retention of seized books of account or other
documents rationalized: ·
It is proposed make amendments to provide
that retention of seized books of
account or other documents shall be one month from the end of the quarter in
which the assessment or reassessment or recomputation order has been made. 13. Rationalisation of provisions related to carry forward of losses in
case of amalgamation ·
It is proposed to amend section 72A and section 72AA
of the Act to provide that any loss forming part of the accumulated loss of
the predecessor entity, shall be carried forward for not more than eight
assessment years immediately succeeding the assessment year for which such
loss was first computed for original predecessor entity. 14. Amendments proposed in provisions of Block assessment for search
and requisition cases under Chapter XIV-B ·
It is proposed to add the term “virtual
digital asset” to the said definition of undisclosed income of the block
period. The time-limit for completion of block assessment is proposed to be
made as twelve months from end of the quarter in which the last of the
authorisations for search or requisition has been executed. |
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