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The Union Budget 2025-26 is for 3Ms-Manufacturing, Middle Class and MSMEs: Mr Vivek Jalan

Mr Vivek Jalan, Partner Tax Connect Advisory Services LLP on the budget

The Union Budget 2025-26 is for three Ms -Manufacturing, Middle Class and MSMEs. Customs duty on capital goods and raw material imports have been rationalised to promote manufacturing, especially on lithium Ion batteries. MSMEs have also been a special focus in this budget. The Biggest big bang change of course is the exemption of Income Tax for middle class with income upto Rs 12 Lakhs. Further, as expected income tax TDS/ TCS provisions have been revamped and rationalised. There are 71 Sections which cover TDS/TCS having multiple thresholds and multiple rates. Industry had pitched in for complete revamp of TDS/TCS provisions and this budget has moved in the direction. For example, on same goods purchase there was a TDS u/s 194Q as well as TCS u/s 206C(1H). This created hardship and in this budget TCS has been scrapped to provide much needed relief.

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