As we move into October 2025, the compliance season is in full swing — with multiple due dates for MCA filings, GST returns, TDS statements, and Tax Audits, all overlapping with the Diwali festive season. At the same time, several representations and court orders have led to extensions or expected relaxations for various filings. Let’s go through all updates and due dates one by one

Income Tax, TDS, TCS Changes From 1st April 2025

The Budget 2025 introduced major amendments to the Income Tax Act, 1961, aimed at simplifying India’s tax structure. These changes take effect from 1st April 2025 and will be applicable for FY 2025-26 (AY 2026-27).

1. Income Tax Slabs for FY 2025-26 (AY 2026-27)

The Budget 2025 introduced revised tax slabs under Section 115BAC (New Tax Regime) to enhance savings and boost spending capacity. These new slab rates apply to income earned in FY 2025-26 onwards.

Note: Old Tax Regime (Optional) slab rates remain unchanged.

2. Increased Rebate Under Section 87A

The rebate under Section 87A has been increased to ₹60,000 from the previous limit of ₹25,000. This means taxpayers with income up to ₹12 lakh will have zero tax liability under the New Tax Regime.

3. Tax Deduction at Source (TDS) Changes

Effective April 2025, the TDS threshold limits for various sections have been increased as follows:

The following changes in TDS Rates will apply from 1st April 2025:

Note: Other TDS provisions remain unchanged.

4. Omission of TCS on Sale:

Existing Provision (Section 206C(1H))

 TCS at 0.1% is collected on the sale of goods (except exports and certain specified goods).
 Applicable if the sale value exceeds ₹50 lakh in a financial year.

Issue with Existing Provision

 TDS under Section 194Q also applies at 0.1% on the same transaction.
 Uncertainty for sellers, as they are often unaware if the buyer has deducted TDS, leading to double compliance(both TDS & TCS).

Key Change:

 TCS on the sale of goods (Section 206C(1H)) is removed from 01.04.2025.
 TDS under Section 194Q will continue.

4. Benefits to Taxpayers

 No double compliance (TCS & TDS confusion removed).
 Reduced compliance burden for sellers.
 Avoids unnecessary liquidity blockage.

5. Effective Date

 From 01.04.2025, sellers are NOT required to collect TCS on the sale of goods.

5. Tax Collected At Source (TCS) Changes

The following TCS changes will be effective from April 2025:

Definition of “Forest Produce” Rationalized

Q1. What are the major provisions of Section 206C(1) (TCS on Sale of Specified Goods)?
 Section 206C(1) mandates TCS collection on the sale of specific goods like alcohol, timber, tendu leaves, and other forest produce.

Q2. What changes were made in Finance Bill 2025?
Three major amendments:

1. “Forest produce” has been formally defined.
2. Scope clarification: Now, only “forest produce under a forest lease” is liable for TCS.
3. TCS Rate Reduction:
   • TCS on timber and other forest produce (excluding tendu leaves) under a forest lease is reduced from 2.5% to 2%.

Q3. How has “forest produce” been defined?
 It follows the meaning provided under State Forest Acts or the Indian Forest Act, 1927.

Q4. What are the key changes in TCS applicability on forest produce?
 Earlier: TCS was applicable to all forest produce sales.
 Now: Only forest produce obtained under a forest lease is liable for TCS.

Q5. What is the new TCS rate for forest produce (excluding timber and tendu leaves) under a forest lease?
 The TCS rate is reduced from 2.5% to 2%.

Exemption from Prosecution for Delayed Payment of TCS (Section 276BB)

Q1. What is Section 276BB of the Income-tax Act, 1961?
 Section 276BB provides for prosecution in case of failure to pay the tax collected at source (TCS) to the credit of the Central Government.

Q2. What amendment has been made in Section 276BB in Finance Bill 2025?
 The amendment states that prosecution shall not be instituted if the person has paid TCS to the credit of the Central Government on or before the prescribed time for filing the TCS statement under proviso to Section 206C(3).

Q3. What happens if the person does not pay TCS even after the due date?
 The present provisions of Section 276BB shall continue to apply, meaning prosecution can be initiated.

Q4. How does this amendment benefit taxpayers?
 Taxpayers who miss the TCS payment deadline but pay before filing the TCS statement will now be exempt from prosecution, reducing litigation risks.

6. Removal of Higher TDS/TCS for Non-Filers of Income Tax Return

Q1. What are Sections 206AB and 206CCA of the Act?
 Section 206AB mandates higher TDS rates for non-filers of income tax returns.
 Section 206CCA mandates higher TCS rates for non-filers of income tax returns.

Q2. What changes were made in Finance Bill 2025?
 Both sections are proposed to be omitted from 01.04.2025 onwards.

Q3. How does this benefit taxpayers?
 Deductors and collectors no longer need to verify whether the deductee/collectee has filed an income tax return, reducing compliance burdens.
 However, higher TDS/TCS rates for invalid PAN or no-PAN cases will continue to apply.

Q4. From when will these sections be omitted?
 From 1st April 2025, these provisions will no longer be applicable.

7. Updated Tax Return (ITR-U) Deadline Extended

The deadline for filing an Updated Tax Return (ITR-U) has been extended from 12 months to 48 months (4 years). Additional tax liability depends on when the ITR-U is filed:

8. Benefits for IFSC Units

• Sunset date extended: IFSC units can now commence operations until 31st March 2030 to claim tax benefits.
• Life insurance policies issued by IFSC offices to non-residents are fully exempt under Section 10(10D), with no limit on premium amount.

9. Tax Exemptions for Start-ups

Start-ups incorporated before 1st April 2030 can avail 100% tax exemption on profits for three consecutive years out of ten years under Section 80-IAC, subject to conditions.

10. Tax Deduction for NPS Vatsalya

1. What is NPS Vatsalya?

• A pension scheme launched on 18.09.2024, allowing parents/guardians to maintain an NPS account for minor children.

2. Existing 80CCD Provisions

• Deduction available for contributions to NPS by employees, employers, or any assessee.
• Withdrawals are taxable, subject to certain conditions.

3. Key Amendments in Finance Bill 2025

 Tax Deduction Extended: Parents/guardians can now claim deduction for contributions to NPS Vatsalya (for up to 2 minor children) under the old tax regime.
 Allowed under Section 80CCD(1B) with an overall cap of ₹50,000 (including self & children’s contributions).
 Partial withdrawal (up to 25%) is tax-exempt under Section 10(12BA).
 Final withdrawal is taxable if a deduction was claimed earlier.

4. Effective Date

 Applicable from AY 2026-27 (PY 2025-26).

11. Tax Exemption for Withdrawals from National Savings Scheme (NSS):

1. Previous NSS Provisions

• Section 80CCA allowed deduction for deposits in National Savings Scheme (NSS).
• Withdrawals (with interest) were taxable if a deduction was claimed earlier.
• No deduction was allowed under Section 80CCA since AY 1992-93.
• No tax on withdrawals after the depositor’s demise.

2. Key Change in NSS (DEA Notification – 29.08.2024)

 No interest will be credited to NSS accounts from 01.10.2024.

3. Benefits under Finance Bill 2025

 Tax exemption granted on withdrawals made on or after 29.08.2024.
 Exemption applies only to deposits for which deduction under Section 80CCA was claimed earlier.
 Allows depositors to withdraw funds without tax liability.

4. Effective Date

 Applicable for withdrawals made on or after 29.08.2024.

12. Deduction on Remuneration Paid to Partners

The maximum deduction available for partners’ remuneration will be:

13. Clarity in Taxation of Income on Redemption of Unit Linked Insurance Policy (ULIP)

Q1. What are the provisions relating to amounts received under a life insurance policy?

Ans. Section 10(10D) provides income-tax exemption on the sum received under a life insurance policy, including any bonus, subject to certain conditions.

Q2. What conditions must be fulfilled to claim exemption under Section 10(10D)?

Ans. To claim the exemption, the following conditions must be met:

• The annual premium for any year during the policy term should not exceed 10% of the actual sum assured (for policies issued on or after 01.04.2012).
• For policies issued after 01.02.2021, the total premium must not exceed ₹2,50,000 (for ULIPs) or ₹5,00,000 (for other life insurance policies) to qualify for exemption.

Q3. What happens if the conditions under Section 10(10D) are not fulfilled?

Ans. If the above conditions are not met, then:

• For ULIP policies, the amount received will be taxed as capital gains under Section 45(1B).
• For other life insurance policies, the income will be taxed under “Income from Other Sources”.

Q4. What changes have been introduced through the Finance Bill 2025?

Ans.

• Previously, even if the ULIP premium exceeded 10% of the sum assured, the redemption amount was not explicitly taxed under “Capital Gains.” This led to ambiguity regarding its tax treatment.
• Finance Bill 2025 clarifies that any sum received from a non-exempt ULIP policy will be taxed as capital gains.
• This ensures uniform tax treatment for all ULIP policies, eliminating any confusion.

Thus, if the exemption under Section 10(10D) does not apply, the income received will be taxed as:

• Capital Gains (for ULIP policies)
• Income from Other Sources (for non-ULIP life insurance policies)

14. Changes for Charitable Trusts & Institutions

1. Extended Registration Validity

• Trusts with income below ₹5 crores now get 10-year registration validity instead of 5 years.

2. Flexibility for Incomplete Applications

• Incomplete registration applications will no longer lead to automatic cancellation. Trusts can now rectify mistakes before rejection.

3. Changes in ‘Specified Persons’ Definition

• Higher contribution threshold:
  • A person is considered a “specified person” if they contribute ₹1 lakh in a financial year (earlier ₹50,000) OR ₹10 lakh in total (earlier no such limit).
• ‘Relatives’ and ‘concerns’ of specified persons are excluded from the definition.
• Founders, trustees, and managers remain fully covered under existing restrictions.

15.Obligation to Furnish Information on Crypto Assets

1. Definition of Crypto Asset

• Crypto assets are defined under Section 2(47A) as part of the Virtual Digital Asset (VDA) definition in the Income Tax Act.

2. Key Amendments in Finance Act 2025

 Reporting entities must furnish prescribed information on crypto transactions.
 Information must be reported within the prescribed time and manner to the Income Tax Authority.

3. Reporting Obligations

• Who must report? A prescribed reporting entity under Section 285BAA (to be defined in Income Tax Rules).
• What information? Details of crypto transactions (as specified in Income Tax Rules).
• To whom? The Income Tax Authority (as prescribed).

4. Why is this Reporting Necessary?

 India is among 52 jurisdictions adopting the Crypto-Asset Reporting Framework (CARF).
 CARF mandates Automatic Exchange of Tax-Relevant Information (AEOI) on crypto assets.
 The G20 Leaders’ New Delhi Declaration called for swift CARF implementation.

5. Implementation Date

 Reporting entities must start providing information from the prescribed date (to be notified in rules).

16. Annual Value of Self-Occupied Property : Deemed Let out property

 The taxation of self-occupied property has been simplified.
 Relaxation in conditions under Section 23(2) for determining annual value as nil.

Previous Conditions

• The annual value of a self-occupied house was considered nil if:
   The owner resided in it.
   The owner could not reside due to business, profession, or employment reasons.

New Relaxations in Finance Act 2025

 Now, the annual value will be nil if the property is self-occupied, regardless of the reason for not residing in it.
 No longer necessary to prove that the owner couldn’t reside due to work-related reasons.

4. How Many Properties Can Be Considered as Nil?

 Up to two self-occupied properties, at the owner’s option, can have nil annual value (if no rent or benefit is derived).

5. Example Scenario

• House 1 (Bangalore) – Mother resides.
• House 2 (Mumbai) – Owner resides.
• House 3 (Delhi) – Vacant.

 The owner can choose two houses to be treated as self-occupied with nil annual value for tax purposes.

6. Effective Date

 Applies from Previous Year 2024-25 (Assessment Year 2025-26 onwards).

Save Tax/TDS on FD Interest

Investing money wisely is crucial for financial security, and individuals choose from various options like mutual funds, stocks, real estate, gold, government schemes, and fixed deposits (FDs). While mutual funds and stocks offer higher returns, they come with market risks. Gold and real estate provide stability but require significant capital and have liquidity constraints. On the other hand, fixed deposits (FDs) remain a preferred investment choice for many due to their safety, assured returns, and ease of access. However, interest earned on FDs is subject to Tax Deducted at Source (TDS), which can reduce your returns

Fixed Deposit (FD) interest is subject to Tax Deducted at Source (TDS) if it exceeds a certain threshold. The Finance Act 2025 has introduced key changes in TDS rules, including  increase in the TDS threshold for interest under Section 194A. These changes will be effective from April 1, 2025.

Important Change from 1st April 2025: Increase in TDS Threshold on FD Interest (Section 194A)

• Current Rule (Before April 1, 2025):
  • TDS is deducted at 10% if interest on FD exceeds:
    • ₹40,000 for regular individuals
    • ₹50,000 for senior citizens
• New Rule (Effective April 1, 2025):
  • The threshold for TDS deduction is increased to ₹50,000 for regular individuals.
  • For senior citizens, the Increased to ₹1,00,000.
  • This means fewer people will have TDS deducted on their FD interest.

2. How to Save TDS on FD Interest?

If your total income is below the taxable limit, you can submit Form 15G or Form 15H to your bank to avoid TDS deduction on FD interest.

(A) What is Form 15G & Form 15H?

Click here to download form 15G

Click here to download form 15H

(B) How to Submit Form 15G/15H?

• You can download the form from your bank’s website or submit it online via net banking.
• Submit the form at the beginning of the financial year to avoid unnecessary TDS deductions.
• The form needs to be submitted every financial year.

(C) Example on How Form 15G/15H Helps

• Case 1: Rohan (aged 45) earns ₹45,000 as FD interest but has no other taxable income.
  • Without Form 15G, the bank will deduct 10% TDS on ₹5,000 (₹45,000 – ₹40,000 threshold).
  • If he submits Form 15G, no TDS will be deducted.
• Case 2: Meera (aged 65) earns ₹1,10,000 as FD interest, but her total taxable income is ₹3,80,000 (below ₹4 lakh).
  • Without Form 15H, the bank will deduct 10% TDS on ₹10,000 (₹1,10,000 – ₹1,00,000 threshold).
  • If she submits Form 15H, no TDS will be deducted.

Fixed deposits remain a reliable investment choice for those seeking safety and steady returns. However, TDS on FD interest can reduce your earnings, especially if your total income is below the taxable limit. With the Finance Act 2025increasing the TDS threshold under Section 194A from ₹40,000 to ₹50,000 for individuals (₹50,000 to ₹1,00,000 for senior citizens), fewer taxpayers will be affected by automatic TDS deductions. Additionally, submitting Form 15G (for individuals below 60) and Form 15H (for senior citizens) can help eligible investors avoid unnecessary tax deductions. By understanding these rules and using tax-saving strategies wisely, you can maximize your FD returns and improve your financial planning.

BUDGET HIGHLIGHTS 2024

Earlier today, Nirmala Sitharaman, Hon’ble Finance Minister, presented the first budget of the current government. The budget, particularly, focuses on employment, skilling, MSMEs, and the middle class and for all-around prosperity. The budget also details nine priorities for generating ample opportunities for all and suggests specific actions and reforms required to realise the goal of Viksit Bharat.

For the full speech, please refer:
https://www.indiabudget.gov.in/doc/Budget_Speech.pdf

Budget Theme

• Focus on employment, skilling, MSMEs, and the middle class.
• Announcement of Prime Minister’s package of 5 schemes and initiatives to facilitate employment, skilling and other opportunities for 4.1 Cr youth over a 5-year period with a central outlay of INR 2 Lakh Cr.
• Provision of INR 1.48 Lakh Cr for education, employment and skilling.

Budget Priorities

• In line with the Viksit Bharat strategy set out in the interim budget, the budget envisages sustained efforts on the following 9 priorities for generating ample opportunities for all.
  • Productivity and resilience in Agriculture
  • Employment & Skilling
  • Inclusive Human Resource Development and Social Justice
  • Manufacturing & Services
  • Urban Development
  • Energy Security
  • Infrastructure
  • Innovation, Research & Development and
  • Next Generation Reforms
• Subsequent budgets will build on these, and add more priorities and actions.

Priority 1: Productivity and Resilience in Agriculture

Transforming agriculture research

• A comprehensive review of the agriculture research setup will be undertaken to bring the focus on raising productivity and developing climate-resilient varieties. Funding will be provided in challenge mode, including to the private sector. Domain experts both from the government and outside will oversee the conduct of such research.

Release of new varieties

• New 109 high-yielding and climate-resilient varieties of 32 field and horticulture crops will be released for cultivation by farmers.

Natural Farming

• In the next two years, 1 Cr farmers will be initiated into natural farming supported by certification and branding. Implementation will be through scientific institutions and willing gram panchayats.
• 10,000 need-based bio-input resource centres will be established.

Missions for pulses and oilseeds

• Production, storage, and marketing will be strengthened to achieve self-sufficiency.
• A strategy is being developed to achieve ‘atmanirbharta’ for oil seeds such as mustard, groundnut, sesame, soybean, and sunflower.

Vegetable production & Supply Chains

• Large-scale clusters for vegetable production will be developed closer to major consumption centres.
• Farmer-Producer Organizations, cooperatives and start-ups for vegetable supply chains including for collection, storage, and marketing will be promoted.

Digital Public Infrastructure for Agriculture

• The government, in partnership with the states, will facilitate the implementation of the Digital Public Infrastructure (DPI) in agriculture for coverage of farmers and their lands in 3 years.
• During this year, digital crop survey for Kharif using the DPI will be taken up in 400 districts. The details of 6 Cr farmers and their lands will be brought into the farmer and land registries. Further, the issuance of Jan Samarth based Kisan Credit Cards will be enabled in 5 states.

Shrimp Production & Export

• Financial support for setting up a network of Nucleus Breeding Centres for Shrimp Broodstocks to be provided. Financing for shrimp farming, processing and export will be facilitated through NABARD.

National Cooperation Policy

• National Cooperation Policy for systematic, orderly and all-round development of the cooperative sector will be drafted to fast-track the growth of the rural economy and employment generation opportunities.
• INR 1.52 Lakh Cr is provided for agriculture and the allied sector.

Priority 2: Employment & Skilling

Employment Linked Incentive

• As a part of the Prime Minister’s package, three schemes to be implemented for ‘Employment Linked Incentive’:
  • Scheme A: First Timers
    To provide one-month wage (up to INR 15,000) to all persons newly entering the workforce in all formal sectors. The eligibility limit will be a salary of  INR 1 Lakh per month.
  • Scheme B: Job Creation in Manufacturing
    To incentivise additional employment in the manufacturing sector, linked to the employment of first-time employees.
  • Scheme C: Support to employers 
    To cover additional employment in all sectors. The government will reimburse employers up to INR 3,000 per month for 2 years towards their EPFO contribution for each additional employee.

Participation of women in the workforce

• Working women hostels are to be established in collaboration with the industry. The partnership will also seek to organize women-specific skilling programmes, and promotion of market access for women SHG enterprises.

Skilling programme

• Through a new centrally sponsored scheme for skilling in collaboration with state governments and Industry:
  • 20 Lakh youth will be skilled over a 5-year period
  • 1,000 Industrial Training Institutes will be upgraded in hub and spoke arrangements with an outcome orientation
  • Course content and design will be aligned with the industry demand, and new courses will be introduced for emerging needs.

Skilling Loans

• Model Skill Loan Scheme to be revised to facilitate loans up to INR 7.5 Lakh with a guarantee from a government-promoted fund, thus benefitting 25,000 students every year.

Education Loans

• For helping youth not covered under any benefit under government schemes and policies, financial support for loans up to INR 10 Lakh for higher education in domestic institutions will be provided.

Priority 3: Inclusive Human Resource Development and Social Justice

Saturation approach

• For achieving social justice comprehensively, the saturation approach of covering all eligible people through various programmes, including those for education and health, will be adopted.
• Schemes supporting economic activities by craftsmen, artisans, self-help groups, scheduled caste, scheduled tribe and women entrepreneurs, and street vendors will be strengthened.

Purvodaya

• A plan for the all-round development of the eastern region, including  Bihar, Jharkhand, West Bengal, Odisha, and Andhra Pradesh, will be formulated. The plan will cover the development of human resources, infrastructure, and the generation of economic opportunities.
• On the Amritsar Kolkata Industrial Corridor, which will catalyse the industrial development of the eastern region, an industrial node at Gaya will be developed.
• In Bihar, development of road connectivity and power projects will be supported and new airports, medical colleges and sports infrastructure will be constructed.

Women-led development

• For promoting women-led development, the budget carries an allocation of more than INR 3 Lakh Cr for schemes benefitting women and girls.

Priority 4: Manufacturing & Services

Support for the promotion of MSMEs

• Special attention to MSMEs and manufacturing, particularly labour-intensive manufacturing. The government has formulated a package covering financing, regulatory changes and technology support for MSMEs. The following specific measures were announced:
  • Credit Guarantee Scheme for MSMEs in the Manufacturing Sector
    • For facilitating term loans to MSMEs for the purchase of machinery and equipment without collateral or third-party guarantee, a credit guarantee scheme will be introduced. The scheme will operate on the pooling of credit risks of such MSMEs. A separately constituted self-financing guarantee fund will provide, to each applicant, a guarantee covering up to INR 100 Cr, while the loan amount may be larger.
  • New assessment model for MSME credit
    • Public sector banks will build their in-house capability to assess MSMEs for credit, instead of relying on external assessment. They will also take a lead in developing or getting developed a new credit assessment model, based on the scoring of digital footprints of MSMEs in the economy. This is expected to be a significant improvement over the traditional assessment of credit eligibility based only on asset or turnover criteria. That will also cover MSMEs without a formal accounting system.
  • Credit Support to MSMEs during Stress Period
    • A new mechanism for facilitating continuation of bank credit to MSMEs during their stress period was announced. While being in the Special Mention Account (SMA) stage for reasons beyond their control, MSMEs will have access to credit to continue their business and to avoid getting into the NPA stage. Credit availability will be supported through a guarantee from a government-promoted fund.
  • Mudra Loans
    • The limit of Mudra loans will be enhanced to INR 20 Lakh for those entrepreneurs who have availed and successfully repaid previous loans under the Tarun category.
  • Enhanced scope for mandatory onboarding in TReDS
    • The turnover threshold of buyers for mandatory onboarding on the TReDS platform is to be reduced to INR 250 Cr. This will help MSMEs to unlock their working capital by converting their trade receivables into cash. This measure will bring 22 more CPSEs and 7000 more companies onto the platform. Medium enterprises will also be included in the scope of the suppliers.
  • SIDBI branches in MSME clusters
    • SIDBI will open new branches to expand its reach to serve all major MSME clusters within 3 years and provide direct credit to them. With the opening of 24 such branches this year, the service coverage will expand to 168 out of 242 major clusters.
  • MSME Units for Food Irradiation, Quality & Safety Testing
    • Financial support for setting up 50 multi-product food irradiation units in the MSME sector will be provided. The setting up of 100 food quality and safety testing labs with NABL accreditation will be facilitated.
  • E-Commerce Export Hubs
    • To enable MSMEs and traditional artisans to sell their products in international markets, E-Commerce Export Hubs will be set up in PPP mode. These hubs, under a seamless regulatory and logistic framework, will facilitate trade and export-related services under one roof.

Measures for promotion of Manufacturing & Services

Industrial Parks

• Development of investment-ready plug-and-play industrial parks with complete infrastructure in or near 100 cities, in partnership with the states and private sector, by better-using town planning schemes.
• Twelve industrial parks under the National Industrial Corridor Development Programme are to be sanctioned.

Rental Housing

• Rental housing with dormitory-type accommodation for industrial workers will be facilitated in PPP mode with VGF support and commitment from anchor industries.

Shipping Industry

• Ownership, leasing and flagging reforms will be implemented to improve the share of the Indian shipping industry and generate more employment.

Critical Mineral Mission

• For domestic production, recycling of critical minerals, and overseas acquisition of critical mineral assets. Its mandate will include technology development, skilled workforce, extended producer responsibility framework, and a suitable financing mechanism.

Offshore mining of minerals

• Auction of the first tranche of offshore blocks for mining, building on the exploration already carried out.

Digital Public Infrastructure Applications

• Development of DPI applications at population scale for productivity gains, business opportunities, and innovation by the private sector. These are planned in the areas of credit, e-commerce, education, health, law and justice, logistics, MSME, services delivery, and urban governance.

Integrated Technology Platform for IBC eco-system

• An Integrated Technology Platform will be set up for improving the outcomes under the Insolvency and Bankruptcy Code (IBC) for achieving consistency, transparency, timely processing and better oversight for all stakeholders.

Voluntary closure of LLPs

• The services of the Centre for Processing Accelerated Corporate Exit (C-PACE) will be extended for the voluntary closure of LLPs to reduce the closure time.

National Company Law Tribunals

• Appropriate changes to the IBC, reforms and strengthening of the tribunal and appellate tribunals will be initiated to speed up insolvency resolution. Additional tribunals will be established. Out of those, some will be notified to decide cases exclusively under the Companies Act.

Debt Recovery

• Steps for reforming and strengthening debt recovery tribunals will be taken. Additional tribunals will be established to speed up recovery.

Priority 5: Urban Development

Cities as Growth Hubs

• Working with  states, the government will facilitate development of Cities as Growth Hubs. This will be achieved through economic and transit planning, and orderly development of peri-urban areas utilising town planning schemes.

Creative redevelopment of cities

• For creative brownfield redevelopment of existing cities with a transformative impact, the government will formulate a framework for enabling policies, market-based mechanisms and regulation.

Transit Oriented Development

• Transit Oriented Development plans for 14 large cities with a population above 30 Lakh will be formulated, along with an implementation and financing strategy.

Urban Housing

• Under the PM Awas Yojana Urban 2.0, the housing needs of 1 Cr urban poor and middle-class families will be addressed with an investment of INR 10 Lakh Cr. This will include the central assistance of INR 2.2 Lakh Cr in the next 5 years.
• Enabling policies and regulations for efficient and transparent rental housing markets with enhanced availability will also be put in place.

Water Supply and Sanitation

• In partnership with the State Governments and Multilateral Development Banks, water supply, sewage treatment and solid waste management projects and services for 100 large cities through bankable projects will be promoted. These projects will also envisage the use of treated water for irrigation and filling up of tanks in nearby areas.

Priority 6: Energy Security

Energy Transition

• A policy document on appropriate energy transition pathways that balances the imperatives of employment, growth and environmental sustainability will be drafted.

PM Surya Ghar Muft Bijli Yojana

• PM Surya Ghar Muft Bijli Yojana has generated remarkable response with more than 1.28 Cr registrations and 14 Lakh applications, and the government will further encourage it.

Pumped Storage Policy

• A policy for promoting pumped storage projects will be drafted for electricity storage and facilitating smooth integration of the growing share of renewable energy with its variable & intermittent nature in the overall energy mix.

Research and development of small and modular nuclear reactors

• Nuclear energy is expected to form a significant part of the energy mix for Viksit Bharat.
• The government will partner with the private sector for setting up Bharat Small Reactors, research & development of Bharat Small Modular Reactor, and research & development of newer technologies for nuclear energy.

Advanced Ultra Super Critical Thermal Power Plants

• The development of indigenous technology for Advanced Ultra Super Critical (AUSC) thermal power plants with much higher efficiency has been completed. A joint venture between NTPC and BHEL will set up a full-scale 800 MW commercial plant using AUSC technology. The government will provide the required fiscal support. Moving forward, development of indigenous capacity for the production of high-grade steel and other advanced metallurgy materials for these plants will result in strong spin-off benefits for the economy.

Roadmap for ‘hard to abate’ industries

• A roadmap for moving the ‘hard to abate’ industries from ‘energy efficiency’ targets to ‘emission targets’ will be formulated. Appropriate regulations for the transition of these industries from the current ‘Perform, Achieve and Trade’ mode to the ‘Indian Carbon Market’ mode will be put in place.

Support to traditional micro and small industries

• An investment-grade energy audit of traditional micro and small industries in 60 clusters, including brass and ceramic, will be facilitated. Financial support will be provided for shifting them to cleaner forms of energy and implementation of energy efficiency measures. The scheme will be replicated in another 100 clusters in the next phase.

Priority 7: Infrastructure

Infrastructure investment by Central Government

• Strong fiscal support for infrastructure to continue over the next 5 years, in conjunction with imperatives of other priorities and fiscal consolidation. This year, INR 11,11,111 Cr has been provisioned for capital expenditure. This would be 3.4% of our GDP.

Infrastructure investment by state governments

• Encouragement to states to provide support of similar scale for infrastructure, subject to their development priorities. A provision of 1.5 Lakh Cr for long-term interest-free loans has been made to support the states in their resource allocation.

Private investment in infrastructure

• Investment in infrastructure by  private sector will be promoted through viability gap funding and enabling policies and regulations. A market-based financing framework will be brought out.

Pradhan Mantri Gram Sadak Yojana (PMGSY)

• Phase IV of PMGSY will be launched to provide all-weather connectivity to 25,000 rural habitations.

Tourism

• Government’s efforts in positioning India as a global tourist destination will also create jobs, stimulate investments and unlock economic opportunities for other sectors. In addition to the measures outlined in the interim budget, the following measures were proposed:
  • Comprehensive development of Vishnupad Temple Corridor and Mahabodhi Temple Corridor will be supported to transform them into world-class pilgrim and tourist destinations.
  • Comprehensive development of Rajgir.
  • The development  of Nalanda as a tourist centre besides reviving Nalanda University.
  • Development of Odisha’s scenic beauty, temples, monuments, craftsmanship, wildlife sanctuaries, natural landscapes and pristine beaches to make it an ultimate tourism destination.

Priority 8: Innovation, Research & Development

• Anusandhan National Research Fund for basic research and prototype development to be operationalised. Further, a mechanism to be established for spurring private sector-driven research and innovation at commercial scale with a financing pool of INR 1 Lakh Cr.

Space Economy

• With government’s continued emphasis on expanding the space economy by 5 times in the next 10 years, a venture capital fund of INR 1,000 Cr will be set up.

Priority 9: Next Generation Reforms

Economic Policy Framework

• An Economic Policy Framework to be formulated to delineate the overarching approach to economic development and set the scope of the next generation of reforms for facilitating employment opportunities and sustaining high growth.
• The government will initiate and incentivize reforms for improving productivity of factors of production, and facilitating markets and sectors to become more efficient. These reforms will cover all factors of production, namely land, labour, capital and entrepreneurship, and technology as an enabler of improving total factor productivity and bridging inequality.
• For promoting competitive federalism and incentivizing states for faster implementation of reforms, a significant part of the 50-year interest-free loan to be earmarked. Working with the states, following reforms will be initiated:
  • Land-related reforms by state governments
    • Land-related reforms and actions, both in rural and urban areas, will cover land administration, planning and management, and urban planning, usage and building bylaws. These will be incentivized for completion within the next 3 years through appropriate fiscal support.
    • Rural land-related actions will include: Assignment of Unique Land Parcel Identification Number (ULPIN) or Bhu-Aadhaar for all lands, Digitization of cadastral maps, Survey of map sub-divisions as per current ownership, Establishment of land registry, and Linking to the  farmers registry. These actions will also facilitate credit flow and other agricultural services.
    • Land records in urban areas will be digitized with GIS mapping. An IT-based system for property record administration, updating, and tax administration will be established. These will also facilitate the improvement of the financial position of local urban bodies.
  • Reforms
    • The government will facilitate the provision of a wide array of services to labour, including those for employment and skilling. A comprehensive integration of e-shram portal with other portals will facilitate such one-stop solution. Open architecture databases for the rapidly changing labour market, skill requirements and available job roles, and a mechanism to connect job-aspirants with potential employers and skill providers will be covered in these services.
    • Shram Suvidha and Samadhan portals will be revamped to enhance  ease of compliance for industry and trade.
    • To meet the financing needs of the economy, the government will bring out a financial sector vision and strategy document to prepare the sector in terms of size, capacity and skills. This will set the agenda for the next 5 years and guide the work of the government, regulators, financial institutions and market participants.
  • Taxonomy for climate finance
    • A taxonomy for climate finance for enhancing the availability of capital for climate adaptation and mitigation to be developed. This will support achievement of the country’s climate commitments and green transition.
  • Variable Capital Company structure
    • Governemnt will seek the required legislative approval for providing an efficient and flexible mode for financing leasing of aircrafts and ships, and pooled funds of private equity through a ‘variable company structure’.
  • Foreign Direct Investment and Overseas Investment
    • The rules and regulations for Foreign Direct Investment and Overseas Investments will be simplified to facilitate foreign direct investments, nudge prioritization, and  promote opportunities for using Indian Rupee as a currency for overseas investments. ​​​​​​
  • Use of Technology 
    • Adoption of technology towards digitalization of the economy to be enhanced.
  • Ease of Doing Business
    • For enhancing ‘Ease of Doing Business’, the government is already working on the Jan Vishwas Bill 2.0. Further, states will be incentivized for implementation of their Business Reforms Action Plans and digitalization.
  • Data and Statistics
    • For improving data governance, collection, processing and management of data and statistics, different sectoral data bases, including those established under the Digital India mission, will be utilized with active use of technology tools.

Taxation

Indirect Taxes

A comprehensive review of the rate structure over the next six months will rationalise and simplify customs duty rates to facilitate trade, remove duty inversion, and reduce disputes.

Sector-specific customs duty proposals:

• Medicines and Medical Equipment
  • Fully exempt three more cancer medicines from customs duties.
  • Changes in the BCD on x-ray tubes & flat panel detectors for use in medical x-ray machines under the Phased Manufacturing Programme, so as to synchronise them with domestic capacity addition.
• Mobile Phone and Related Parts
  • Reduction of the BCD on mobile phones, mobile PCBA and mobile chargers to 15%.
• Critical Minerals
  • The government proposed to fully exempt customs duties on 25 critical minerals and reduce BCD on two of them.  This will provide a major fillip to the processing and refining of such minerals and help secure their availability for strategic and important sectors like nuclear energy, renewable energy, space, defence, telecommunications, and high-tech electronics.
• Solar Energy 
  • To support the energy transition, the list of exempted capital goods for use in the manufacture of solar cells and panels in the country is to be expanded. Further, in view of sufficient domestic manufacturing capacity of solar glass and tinned copper interconnect, the government proposed not to extend the exemption of customs duties provided to them.
• Marine Products
  • To enhance competitiveness, BCD on certain broodstock, polychaete worms, shrimp and fish feed to be reduced to 5%.
  • Exemption of customs duty on various inputs for the manufacture of shrimp and fish feed.

• Leather and Textile 
  • To enhance the competitiveness of exports, the government proposed to reduce BCD on real down filling material from duck or goose.
  • The list of exempted goods for manufacture of leather and textile garments, footwear and other leather articles for export to be expanded.
  • To  rectify inversion in duty, the government proposed to reduce BCD, subject to conditions, on methylene diphenyl diisocyanate (MDI) for manufacture of spandex yarn from 7.5 to 5%.
  • The export duty structure on raw hides, skins and leather is proposed to be simplified and rationalised.
• Precious Metals
  • To enhance domestic value addition in gold and precious metal jewellery in the country, reduction in customs duties on gold and silver to 6% and that on platinum to 6.4%.
• Other Metals
  • To reduce the cost of production of Steel and copper, the government proposed to remove the BCD on ferro nickel and blister copper. The nil BCD on ferrous scrap and nickel cathode and concessional BCD of 2.5% on copper scrap continue.
• Electronics
  • To increase value addition in the domestic electronics industry,
    removal of the BCD, subject to conditions, on oxygen-free copper for the manufacture of resistors. Certain parts for the manufacture of connectors are to be exempted as well.
• Chemicals and Petrochemicals
  • To support existing and new capacities in the pipeline, an increase in the BCD on ammonium nitrate from 7.5 to 10%.
• Plastics
  • To curb imports of PVC flex banners, the BCD on them is to be increased from 10 to 25%.
• Telecommunication Equipment
  • To incentivise domestic manufacturing, BCD is to be increased from 10 to 15% on PCBA of specified telecom equipment.
• Trade facilitation
  • To promote domestic aviation and boat and ship MRO, the period for exporting goods imported for repairs will be increased to one year.
  • The time limit for re-import of goods for repairs under warranty is to be increased from three to five years.

Direct Taxes

Investment

• To bolster the Indian start-up eco-system, boost the entrepreneurial spirit and support innovation, the angel tax is to be abolished for all classes of investors.
• To give a fillip to cruise tourism, an employment-generating industry, a simpler tax regime for foreign shipping companies operating domestic cruises in the country was proposed.
• To further promote the development of the diamond cutting and polishing sector, safe harbour rates to be applied for foreign mining companies selling raw diamonds in the country.
• To attract foreign capital for India’s development needs,
  corporate tax rate on foreign companies will be reduced from 40 to 35%.

Sorce : https://www.indiabudget.gov.in/