The Union Budget 2025 is for Manufacturing, Middle Class and MSMEs: Vivek Jalan
Vivek Jalan, Partner Tax Connect Advisory Services LLP:
The Union Budget 2025 is for Manufacturing, Middle Class and MSMEs.
As expected income tax TDS/ TCS provisions have been revamped and rationalized. TDS/TCS are merely advance tax, but there are 71 Sections which cover TDS/TCS, 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 eg. 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. Other TDS thresholds and various compliances has also been rationalized.
Customs duty on capital goods and raw material imports have been rationalized to promote manufacturing, especially on manufacturing of lithium Ion batteries. So the message of the Govt. is very clear – import duty-free but make in India and even export from India.
MSMEs have also been a special focus in this budget. Big reforms are there for leather, footwear, toys, food processing and other MSMEs. Start Ups Tax holiday is also extended.
The Biggest big bang change of course is the exemption of Income Tax for middle class with income upto Rs 12 Lakhs. Even upto income limit of Rs.24 Lakhs per annum, there is a saving of up to Rs.1.1 Lakh per annum. This would provide more disposable income in the hands of middle class.