Decoding Union Budget 2025

The webinar provided an overview of the budget's economic context and detailed proposals related to direct and indirect taxes. The webinar began by outlining the key highlights of India's Union Budget for 2025-26, presented the budget's economic context, including projected GDP growth between 6.3% and 6.8% for FY26 and a fiscal deficit target of 4.4% of GDP. The budget emphasized transformative reforms across various sectors, including taxation, power, and the financial sector.

The webinar then covered key direct tax proposals, focusing on the introduction of a new Income Tax Bill aimed at simplifying the existing tax law. It also detailed changes to personal income tax rates, corporate tax regulations, and measures to rationalize Tax Deduction and Collection at Source (TDS/TCS) provisions.

In the area of personal tax, the webinar discussed proposed adjustments to tax rates, income slabs, and rebates. The budget also addressed the tax treatment of self-occupied property and Unit Linked Insurance Plans (ULIPs).

Regarding corporate tax, the webinar indicated that there were no changes to the corporate tax rate, but it outlined amendments affecting business trusts, Alternative Investment Funds (AIFs), start-ups, and tonnage taxation. It also included clarifications and changes related to the carry-forward of losses in cases of amalgamation or reorganization.

The webinar further explored the introduction of a new block assessment system for transfer pricing and provisions for non-resident taxation, including presumptive taxation for specified non-residents and clarifications on Significant Economic Presence (SEP). Amendments concerning the International Financial Services Centre (IFSC), covering exemptions and regulations for entities within the IFSC, were also detailed.

The rationalization of TDS/TCS provisions was another topic, with the webinar explaining changes to thresholds and rates for various sections. The removal of TCS applicability on the sale of goods was also discussed.

On the subject of tax administration, the webinar noted the extension of the time limit for updated returns and the expansion of the scope of safe harbor rules for transfer pricing.

Finally, the webinar concluded by presenting key indirect tax proposals, primarily focusing on changes related to the Goods and Services Tax (GST), such as the Input Service Distributor (ISD) mechanism and amendments to credit note regulations. Customs-related changes, including revisions to assessment timelines and amendments to refund and recovery timelines, as well as changes to customs tariff rates, were also covered.