The Finance Bill 2025 was introduced in the Lok Sabha on February 1, 2025. It aims to implement the financial proposals of the Central Government for the fiscal year 2025-26.
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- Direct Tax Proposals:
- Income Tax Rates: The Bill maintains the existing tax slabs under the new regime (Section 115BAC) while offering marginal relief for older citizens. The basic exemption limit is Rs 3 lakh for those above 60 years and Rs 5 lakh for individuals aged 80 and above.
- Deductions & Exemptions: Amendments to Sections 80CCD and 80-IAC enhance deductions for contributions to the National Pension Scheme and extend tax benefits for startups until 2030.
- Capital Gains Tax: Changes to Section 112A adjust the tax rates on long-term capital gains, impacting equity investments.
- Indirect Tax Reforms:
- GST Amendments: The introduction of Sections 122B and 148A in the CGST Act focuses on tightening compliance and curbing tax evasion. The bill also streamlines GST refund procedures.
- Customs & Excise: Amendments in Sections 18 and 28 under the Customs Act simplify import-export procedures, while new provisions under Central Excise aim to reduce litigation.
- Special Provisions:
- Crypto-assets: The Bill explicitly defines crypto-assets under Section 47A, bringing clarity to their taxation and compliance requirements.
- International Financial Services: Amendments to Sections 9A and 10 aim to promote investments in International Financial Services Centres (IFSCs), offering tax exemptions up to 2030.
- Compliance & Penalties:
- Stricter Penalties: The omission of Sections 206AB and 206CCA reduces redundant compliance, while new conditions under Section 271DB introduce penalties for non-compliance in digital transactions.
- Advance Tax and Surcharge Adjustments: Revised surcharge rates for high-income individuals and companies to ensure equitable tax distribution.
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