Budget 2025 Expectations Updates: Will Sitharaman tweak new tax regime to include NPS deductions?

The Indian real estate sector is a vital contributor to the GDP. The upcoming budget will focus on various measures to boost growth, affordability, and sustainability. The industry is expecting policies promoting affordable housing, rationalisation of GST, and incentives to promote green real estate. For Delhi NCR, infrastructure development and smart city initiatives remain key. Better road networks, metro expansion, and seamless connectivity to Delhi and surrounding areas will further enhance the region's position as a top real estate investment destination. The growing commercial and luxury residential segments highlight the need for reforms which enable ease of doing businesses and streamlined approvals. The real estate market will reach new heights if the upcoming budget addresses these areas, attracting domestic and international investors. With supportive policies, Delhi NCR is poised to remain at the forefront of India’s real estate growth.- Gaurav K Singh, Founder and Chairman- Womeki Group

Speaking to Moneycontrol at World Economic Forum on budget priorities, Amitabh Chaudhry, CEO of Axis Bank, says "I am quite sure that the government will maintain their fiscal prudence. I will expect the budget deficit to be brought down to below 4.5% as promised by the Finance Minister earlier. But they can see, they had also put a lot of conditions around the contribution of central government to state government around what state governments need to do before centrally give them the money. I am sure they will look at some of those things and see how they can spur the state government to spend their share quickly, faster, so that growth can be supported. Let's also understand that this growth we have, 6.5%, 7%, whatever the number is, also means that there is more money at the hands of government to spend. It's not that money is shrinking. It is growing but maybe at a slightly lesser pace."

India Ratings and Research (Ind-Ra) emphasized that the FY26 Union Budget should focus on a balanced mix of fiscal consolidation, boosting consumption demand, and capital expenditure (capex) spending. With the fiscal consolidation roadmap set to bring the fiscal deficit down to 4.5% of GDP by FY26, the agency urges measures to address weak consumption demand, which has led to a wait-and-watch mode among private investors. Ind-Ra also expects the government to continue prioritizing infrastructure development and manufacturing capex in FY26, despite the ongoing growth slowdown.

The government needs to fast-track the process of creating digital public infrastructure (DPI) for the agriculture sector, said Krishna Kumar, co-founder and CEO of agriculture technology (agritech) startup Cropin.

“The government is doing their bit and they are on the right track while talking about agritech DPI. One of our requests is to expedite this. While progress is faster than before, it still quite slow from our lens,” Kumar said, speaking to Moneycontrol at the World Economic Forum (WEF) in Davos on January 20.

Mohit Malhotra, Founder and CEO of NeoLiv, expressed optimism for the upcoming Union Budget 2025-26, hoping for policy measures that can boost the real estate sector's growth and affordability. With increasing housing demand in both urban and rural areas, he called for targeted tax relief for homebuyers, incentives for the housing industry, and policies that promote sustainable urban development and infrastructure. Malhotra highlighted the potential of tier-2 cities to drive economic growth and enhance housing demand, offering hope for the growing middle class to achieve homeownership.

Madhur Gupta of Hero Realty asks government to introduce measures that would stimulate the real estate sector saying,  "As the Union Budget 2025 approaches, we are optimistic that the government will introduce measures to propel growth in the real estate sector further. We advocate for increasing the tax rebate on housing loan interest to a minimum of ₹5 lakh. This initiative would provide substantial relief to homebuyers, easing their financial burden and encouraging greater investment in the real estate sector. Industry experts have echoed this sentiment, emphasizing that the current ₹2 lakh rebate is insufficient given the rise in property prices and construction costs. Additionally, we urge the government to implement a single-window clearance mechanism. This new system is critical to expediting the multi-approval process, ensuring greater efficiency and transparency. Such a reform would be transformative, boosting the ease of doing business and attracting further investments into the industry."

The broking industry is anticipating key reforms in the upcoming budget to address its evolving needs. Expectations include grants for technology adoption to ensure a seamless transition to the T+0 settlement cycle and rationalization of the Securities Transaction Tax (STT) to ease trading costs, say industry people.

The industry expects rationalization or removal of the Securities Transaction Tax (STT). "STT is currently an additional burden on traders and investors, eating into their profitability, and discouraging active participation in the retail markets, which can enhance market liquidity and efficiency," said Gurpreet Sidana, chief executive officer at Religare Broking.

A moderation in STT will support domestic retail participation and make Indian equities more attractive to foreign investors, said Shripal Shah, CEO, managing director and CEO of Kotak Securities. "It could help counteract FII outflows and stabilise the rupee," Shah added.

The Global Trade Research Initiative (GTRI) has recommended significant tax reforms ahead of the Union Budget 2025-26. The think tank suggested raising the income tax exemption threshold to Rs 5.7 lakh, adjusted for inflation, to reflect the 5.7% annual inflation rate since it was last set at Rs 2.5 lakh in 2014. GTRI also proposed increasing fixed deductions and exemptions, such as raising the Rs 10,000 deduction for savings interest to Rs 19,450 by 2025 and adjusting the Rs 1.5 lakh deduction for insurance premiums and PF contributions to Rs 2.6 lakh. The think tank emphasized the need for inflation-indexed tax slabs and exemptions to preserve the real value of benefits for taxpayers.

Additionally, GTRI called for simplifying the Tax Deducted at Source (TDS) system, which has grown complex with 40 categories and 13 versions of TCS. They suggested removing TDS for less significant categories to improve efficiency without harming revenue collection. GTRI also pointed out the tax disparity between bank deposit interest and capital market gains, recommending capping FD interest tax at 12.5% to level the playing field and encourage savings. These reforms, GTRI believes, would create a fairer tax system, promote savings, and drive economic growth.

Anshuman Das, CEO and Co-founder of Careernet, discussed the anticipated Union Budget 2025-26 and its potential to transform India's economic landscape. He said, The Union Budget 2025-26 comes at a pivotal time when India's demographic dividend presents immense opportunities for economic transformation. Comprehensive policy measures are anticipated to strengthen the employment ecosystem, including the proposed National Employment Policy (NEP), implementation of new labor codes, and targeted efforts to enhance workforce productivity and women’s participation. The establishment of clear productivity metrics, such as ICOR improvement, coupled with industry-academia partnerships and skill development initiatives, will be instrumental in creating a dynamic and inclusive job market. He expressed hope that the budget will focus on economic growth by extending the 15% concessional tax rate to new manufacturing companies and Global Capability Centers (GCCs) to boost investment and job creation.  Aligning with the vision of ‘Viksit Bharat’ by 2047, the budget is also expected to prioritise economic growth by extending the 15% concessional tax rate for new manufacturing companies and expanding it to Global Capability Centers (GCCs) to boost investment, exports, and job creation. Production-linked incentives for R&D and tax breaks for emerging technologies like AI, robotics, and IoT will drive innovation and technological advancement. Measures to support startups and MSMEs, improve ease of doing business, and advance quantum computing will further accelerate progress. Investments in AI, automation, and reskilling will play a critical role in building a future-ready workforce, ensuring sustainable employment generation, and positioning India as a global leader in digital transformation.”

The telecom services industry has batted for the abolition of levies and extension of carry forward of business losses to 16 years in its Budget wishlist, and argued that large traffic generators (LTG) should contribute to USO Fund/Digital Bharat Nidhi Fund.

It has pitched for a cut in licence fee, and suggested that the definition of gross revenue (GR) be made more precise by stipulating that the revenue from activities that requires no licence, would not be a part of it.

The suggestions are aimed at enhancing the financial stability of the telecom sector, COAI said in its recommendations.

Piyush Jain, Co-Founder and CEO of Impact Guru and CarePal Group, called on the government to prioritize financial accessibility and healthcare equity in the upcoming Union Budget. He proposed, "With the Union Budget around the corner, we urge the government to prioritize financial accessibility and healthcare equity. Lowering the GST on health insurance from the current 18% can make policies more affordable for the middle class and economically disadvantaged populations. This step could increase insurance penetration, reduce financial burdens, and encourage preventive healthcare adoption. For healthcare lending, tax incentives for borrowers would bridge the affordability gap for treatments not covered by insurance, ensuring timely access to life-saving care. Schemes like Ayushman Bharat have been instrumental in providing financial protection to vulnerable populations. To enhance their impact, measures to ensure timely reimbursements and appropriate funding for empaneled private hospitals can encourage broader participation. Increased focus on building robust healthcare infrastructure and partnerships between public and private sectors will help achieve equitable access to quality healthcare services.."

Policy incentives, including tax reliefs, sector-specific subsidies, and support for digital transformation, will be crucial in driving sustainable growth and long-term value creation. Considering the current economic landscape, I think the budget should also focus on infrastructure development, job creation, and ease of doing business. Consider the expectations of various industry sectors, such as the automotive industry, which is looking for funding and incentives for EV infrastructure, service centers, and tax credits for green technology. The real estate sector is hoping for progressive reforms that benefit homebuyers and the industry, including increased tax exemption limits on interest payments on home loans and reduced stamp duty charges As we look to the future, I'm confident that the Union Budget will empower MSMEs, bolster India's economic framework, and present high-growth opportunities for investors. With the government's focus on fiscal prudence and growth-driven policies, I'm optimistic that the budget will strike the right balance to drive India's economic trajectory forward.’-Tarun Singh Founder & MD, Highbrow Securities

‘As we approach the new budget, I'm excited to see how the government builds on the momentum of previous years to drive growth in India's MSME sector. Sustaining this momentum is crucial, with a focus on bridging the swelling debt funding gap that persists for SMEs. Enhancing credit accessibility and simplifying IPO listing procedures will offer vital support. Furthermore, by introducing targeted interest subvention schemes, the government can significantly reduce operational costs. Together, these measures will strengthen the global competitiveness of our MSMEs, ensuring they continue to thrive and grow.- Tarun Singh Founder & MD, Highbrow Securities

Aditya Singh Ratnu, CEO and co-founder of ZEVO, expressed optimism that the 2025 Union Budget will introduce measures to accelerate the adoption of electric vehicles (EVs) in India. He says, "We are optimistic that the forthcoming 2025 Union Budget will introduce progressive measures to further accelerate the adoption of electric vehicles nationwide. We anticipate introduction of the FAME- III scheme, previous iterations of which have been pivotal in driving EV adoption across various vehicle segments. Charging Infrastructure remains a crucial hurdle for widespread EV adoption throughout the country, and we hope for favourable policies and incentives for further development towards the same. Additionally, we hope for increased budget allocations that will further reduce the upfront cost of EVs, as the initial investment required is still considerably high. Another area which requires urgent attention is the inclusion of electric two-wheelers under the FAME subsidy umbrella.

Such measures are crucial for accelerating the transition to sustainable transportation and achieving India's environmental goals”

As the Union Budget 2025-26 approaches, the government is grappling with pressing economic challenges, including slower domestic growth, escalating welfare expenditures, and the imperative for sustained capital investment.

This first full-year Budget of the new administration unfolds against a backdrop of subdued economic momentum, a weakening rupee, and heightened global geopolitical uncertainties, particularly with the Trump-led US administration. Unsurprisingly, expectations for bold and strategic measures are running high.

Here are five critical expectations by Motilal Oswal Financial Services Ltd:

-Conditional interest-free capex loans for states

Capex loans should be linked to states’ performance metrics, such as capex achievement against budget targets and the welfare-to-capex ratio. For instance, states with a higher focus on welfare schemes (e.g., monthly stipends) should be scrutinised before receiving interest-free loans. This ensures fiscal responsibility while addressing the ₹1 trillion capex shortfall anticipated in FY25.

-Simplify taxes and reform dividend taxation

With indirect taxes accounting for ~60% of total tax receipts, simplifying GST slabs and reducing these burdens will enhance disposable incomes. Address the double taxation on dividend income by making it tax-deductible for companies or reverting to earlier practices. These measures could provide relief to investors and improve tax compliance.

-Focus on household income over consumption

Household income must take precedence over boosting consumption. Supporting the construction sector, India’s second-largest employer, and providing non-inflationary aid to MSMEs would bolster incomes sustainably. MSMEs, which contribute over 30% to India’s GDP, require targeted assistance to remain competitive and integrated into the formal economy.

-Commit to fiscal consolidation and capex growth

Despite slower revenue growth, the government should target a fiscal deficit of 4.5% of GDP in FY26 while increasing capex by 10-15%. FY25 spending is projected to hit a six-year low of 14.3% of GDP, making a capex boost critical for economic momentum.

-Recognise limitations in stimulating corporate investments

Corporate capex grew at just 8% CAGR from FY20 to FY24 despite a steep tax cut in 2019. Private sector investment depends more on project viability than fiscal incentives. Policymakers should focus on creating a favourable environment for sustainable investments, especially as government capex grows at 16% CAGR over the same period.

By addressing these priorities, the government can balance fiscal discipline with sustainable growth. Will this Budget align with these goals? The nation will find out on 1 February.

Sagar Agarwal, Co-Founder and Managing Partner at Beams Fintech, expressed optimism about the Union Budget 2025, anticipating significant steps to strengthen India's fintech ecosystem. He highlighted the potential for addressing the credit gap for MSMEs, with hopes for expanded credit guarantee schemes and subsidies in housing finance to spur growth. He says, we expect the budget to introduce favorable tax incentives for PE investments and provide a clear framework for digital banking licenses. These measures would greatly boost investor confidence, while also accelerating the rate of digital financial inclusion across India. We are particularly keen on seeing initiatives that support green finance and sustainable investments, aligning with global ESG trends. Last but not least, we sincerely hope that the budget will streamline regulatory processes and enhance liquidity in the PE market, potentially through encouraging secondary markets or public listings of PE funds. Such forward-thinking policies would undoubtedly position India as a prime destination for fintech investments and innovation on the global stage, adds Agarwal

Sudeep Bhatt, Director of Strategy at Whiteland Corporation says, "The upcoming budget presents an opportunity to move the real estate sector towards growth and resilience. The industry seeks better tax benefits for homebuyers, particularly a higher deduction limit for home loan interest to boost housing demand. Rationalization of GST rates for under-construction properties and incentives for green and sustainable real estate projects are also likely anticipated. Additionally, policies to enhance liquidity for developers, promote ease of doing business and incorporate private and foreign investments through relaxed FDI norms are crucial. This budget can catalyze the real estate sector’s potential, making it an important element for the country’s economic development and employment generation."

In the last budget, there was a dual impact of STT increase and LTCG increase (on listed shares) on the users with an increase in trading costs as well as impact on profitability of the users. Given that the revenue generation would have significantly increased with STT, this can potentially be used to revert the LTCG to 10% in order to ensure even higher market participation and incentivise long-term investment which is critical for the users and the capital market stability. This can also address reduction in the flight of capital from India towards global markets and potentially contribute to rupee appreciation as well.- Devam Sardana, Business Head, Lemonn

Manik Malik, CFO of BPTP, emphasized that as the Union Budget 2025-26 approaches, the real estate sector is hoping for significant measures to foster growth and sustainability. "As the Union Budget 2025 - 26 approaches, the real estate sector eagerly awaits impactful measures to drive growth and sustainability. With rising housing demand across different locations, tax reliefs for homebuyers and incentives for the housing sector are crucial. Policies promoting sustainable development, infrastructure enhancement will not only help in economic growth but also boost housing demand. Additionally, more real estate investments, particularly in the housing sectors, can be stimulated by extending the benefits of capital gains and allowing for greater flexibility in reinvestment standards. In addition to accelerating sector growth, a forward-thinking policy framework with these measures will support infrastructure development and job creation, both of which are essential for India's economic future", said Manik Malik

"The real estate industry is gearing up for the upcoming budget for new opportunities and growth potentials. The upcoming budget is a que for the industry to revive housing demand conditions. For homebuyers, tax reliefs and simplified tax systems can be helpful especially for first time homebuyers. Key priorities of the upcoming budget include increasing the income tax deduction limit for home loan interest under Section 24(B), incentives for green building projects, and rationalisation of GST rates for under - construction properties. Boosting the affordable housing segment via enhanced tax sops and rental housing schemes are crucial to address urban housing affordability. Additionally, focus on infrastructure development, implementation of digital land records, and incentives for REITs and InvIts can attract better investment. There should also be relaxed FDI norms to encourage global investments. With targeted initiatives, the budget can not only revive housing demand, but also strengthen its role as a significant contributor to economic growth." - Viren Mehta, Director, ElitePro Infra

"As we look forward to the Union Budget 2025, the commercial real estate sector anticipates measures to drive growth and innovation, with Grade A office spaces playing a crucial role in attracting global businesses, boosting economic progress, and establishing standards for sustainability and design. Therefore, we encourage the government to consider policies such as tax incentives for green-certified commercial projects, easier access to financing, and streamlined regulatory approvals to accelerate developments. Additionally, enhancing infrastructure in key business districts and offering incentives for hybrid workspace solutions can further boost demand. Moreover, the upcoming budget is an opportunity to address the diverse needs of luxury commercial real estate, ensuring India remains a prime destination for global corporates and high-value investments." - Ashish Sharma, AVP Operations, Brahma Group

"We anticipate that the upcoming Budget will introduce measures to stimulate demand in the residential real estate market, a critical driver of India’s economic growth. Contributing nearly 8% to the national GDP, the real estate sector is a cornerstone for job creation and supports growth across various industries. To maintain this upward trajectory, it is essential for the government to address the financial challenges faced by both homebuyers and developers. Key interventions could include tax benefits, enhanced access to financing, and liquidity-boosting incentives. By focusing on these priorities, the 2025-26 Budget can further amplify the real estate sector’s impact on India’s economic development and ensure sustainable growth and stability." - Mohit Agarwal, Business Head, Conscient

Despite being the second-largest ally in the BJP-led NDA with 16 MPs, the Telugu Desam Party (TDP) has kept its expectations modest for the upcoming Union Budget, focusing solely on the promises made under the Andhra Pradesh Reorganisation Act, 2014, an Indian Express report says. According to the IE report, the TDP's restrained demands stem from the Centre's recent support in securing key projects for the state. This year, the party has sought budgetary allocations for the South Coastal Railway Zone, metro rail projects in Visakhapatnam and Vijayawada, and additional funds for ongoing initiatives such as the Polavaram irrigation project and the Bharat Petroleum Corporation Limited (BPCL) refinery.

• The 2025 budget is poised to accelerate India's transition to green mobility, setting a target for electric vehicles (EVs) to constitute 30% of total automobile sales by 2030. This ambitious goal aligns with India’s price-sensitive market dynamics, making it achievable with the right measures.
• To boost consumer confidence, the focus must be on developing a robust battery infrastructure, including charging stations and battery recycling facilities. The budget should also propose state-level incentives such as waivers on registration fees for two-wheelers and three-wheelers, along with subsidies to make EVs more affordable and accessible.
• Additionally, low-cost financing options through PSU banks and NBFCs with attractive interest rates can facilitate the adoption of EVs for both personal and commercial buyers. Addressing logistical challenges and reducing transportation costs will be crucial to cater to India's diverse and price-conscious customer base.
• The budget is expected to support the rapidly expanding EV industry by promoting standardization and curbing monopolistic practices. Key measures may include advocating for local manufacturing, self-reliance in the EV supply chain, and positioning India as a global hub for EV production. These steps would lay a solid foundation for sustainable mobility and a thriving EV ecosystem in the country. - Veer Singh, CEO, Lord's Automative

India's 2025 Budget offers a critical opportunity to foster transformative progress by investing in green skilling and gender equality—key drivers of a resilient and inclusive future. Increasing women's representation in renewable energy, where they currently make up only 14% of the workforce, is both an economic imperative and a step toward equity. Allocating dedicated funds for green skilling will equip India's workforce to thrive in the clean energy transition. By embracing gender-responsive budgeting, India can pave the way for a sustainable future, empowering women to take leadership roles in renewable energy and STEM fields. - Vaishali Nigam Sinha, Co-founder and Chairperson Sustainability, ReNew

In the 2024 Budget, the deduction for employer contributions to pension schemes under Section 80CCD(2) was raised from 10% to 14% of salary for private sector employers. This change is applicable only to taxpayers who opt for the new tax regime under Section 115BAC.

The government plans to encourage people to adopt the new tax regime, which offers lower tax rates but significantly fewer exemptions and deductions, according to an ET report. Currently, contributions of up to Rs 50,000 to the National Pension System (NPS) under Section 80CCD(1B) are eligible for deductions only under the old tax regime, with no such benefit available under the new regime.

• A fiscal deficit target of 4.5% is expected to be welcomed by the stock markets, striking a balance between fiscal consolidation and the need for growth. This target would indicate macroeconomic stability while providing room for capital expenditure, a key driver of economic expansion. In the railways sector, the budget is likely to prioritize high-speed rail projects, electrification, modernization, and green initiatives, as well as improving tourism-focused routes. Stocks like RVNL, IRCON International, Indian Hotels, and Titagarh Wagons could benefit from these developments.
• In defence, the emphasis is expected to remain on “Make in India,” with increased allocations toward domestic production and export initiatives. Companies like Bharat Electronics (BEL), Hindustan Aeronautics (HAL), Mazagon Dock Shipbuilders, and Cochin Shipyard, known for their strong order books and leadership in indigenization efforts, stand to gain. The capital expenditure theme will also benefit infrastructure players such as L&T, KNR Constructions, and PNC Infratech, along with automobile giants Tata Motors and Mahindra & Mahindra, as well as healthcare stocks like Apollo Hospitals. Sectors tied to defense indigenization are also expected to profit.
• Regarding disinvestment, the government may target Rs 65,000–Rs 70,000 crore, with IDBI Bank, Central Bank of India, and BEML as potential candidates. IDBI Bank, in particular, remains a key pick due to its ongoing privatization process. The consumption sector could see a boost if the budget includes income tax relief, rural development initiatives, or benefits for consumer durables and FMCG. Companies like HUL, Tata Motors, Dabur, and Voltas may benefit from an increase in disposable income.Investors will be looking for the budget to maintain a stable tax regime and avoid increases in STT or LTCG taxes, as any hikes could deter both retail and foreign participation. A favorable tax environment or easing of LTCG norms would help bolster market sentiment. The real estate sector could also benefit from higher exemptions on housing loan interest under Section 24(b), extended incentives for affordable housing, and support for REITs and InvITs. Stocks like DLF, Godrej Properties, UltraTech Cement, and REITs such as Embassy REIT may see gains.Renewable energy, startups, agriculture, and fintech could also be key focus areas in the budget. In summary, while a pro-growth budget with a strong capital expenditure focus could lift market sentiment, any shift toward excessive social spending at the expense of growth could dampen it. Investors should position themselves in sectors such as infrastructure, defense, healthcare, and financials, which are expected to benefit most from a positive budget outlook.

• The government is expected to significantly increase the railway sector budget, with a projected allocation boost of 15-18%. In the 2024-25 budget, Rs 2,62,200 crores were allocated, emphasizing passenger safety through the Kavach anti-collision system and infrastructure development. Under this initiative, the Ministry of Railways plans to equip 10,000 train engines with advanced safety systems and upgrade 5,000-5,500 kilometers of track annually over the next two years.
• AI integration in operations, such as ticketing and track condition monitoring, is being implemented to enhance efficiency and safety. The introduction of new Vande Bharat and Amrit Bharat trains is anticipated, along with the expansion of the Amrit Bharat Station Yojana, which aims to modernize 1,275 railway stations with improved passenger amenities and contemporary designs.
• The Namo Bharat Corridor in Delhi represents a key advancement in reducing congestion and pollution. The budget is also likely to include new orders for rolling stock, freight coaches, and wheels to enhance infrastructure. Furthermore, the Make in India initiative is expected to create new opportunities for railway equipment manufacturers.
• With a positive outlook for the railway sector, RVNL, BEML, and IRFC stand out as top investment picks in this space. - Manish Chowdhury, Head of Research, StoxBox

• The affordable housing segment faces several challenges, including rising raw material costs, increasing land prices, and an outdated definition of affordable homes, particularly in metropolitan areas. Revising the affordable housing criteria in terms of size and price, tailored to specific city dynamics, is essential to rejuvenate the sector.
• Tax incentives for homebuyers, subsidies for developers, and granting industry status to affordable housing are crucial triggers that could drive growth in this segment. The upcoming budget is expected to introduce measures like simplified regulations and targeted incentives to attract foreign investment into commercial real estate.
• To stimulate housing demand across all segments, the government might consider increasing the home loan interest deduction limit beyond the current Rs 2 lakh per year. Overall, we maintain a positive outlook on the real estate value chain, with Oberoi Realty, PNB Housing, and AAVAS Financiers emerging as our top recommendations. - Manish Chowdhury, Head of Research, StoxBox

• The government is likely to reduce customs duties on inputs used in manufacturing medical equipment, electronic goods, and footwear in the upcoming Budget to encourage local production, according to tax experts.
• Harpreet Singh, Partner, Indirect Tax at Deloitte India, highlighted that key expectations from the Customs side in the 2025-26 Budget, set to be presented on February 1, include rate rationalization, regime simplification, and better management of disputes and litigation.
• "As part of the phased manufacturing plan, we anticipate some duty reductions on raw materials for electronics, home appliances, healthcare products, and pharmaceuticals. These are sectors where the government aims to promote manufacturing, leading to lower duties on raw materials in these industries," Singh told PTI.

• India should eliminate tax on drugs for cancer treatment and for chronic and rare diseases, the chairperson of major drugmaker Biocon Ltd said ahead of Prime Minister Narendra Modi's budget announcement, expected next month.
• Other than cosmetic surgeries, drugs used for treating chronic diseases such as diabetes and cancer should be exempted from tax, Kiran Mazumdar-Shaw told Reuters on Friday.
• "In India most of the expenses on medicines are out of pocket - even diagnostic scans are very expensive," she said, urging the government to consider making lifesaving therapies affordable and waiving tax on them.
• "All cancer-related drugs are expensive. Any drug used for chronic therapy with a monthly cost of treatment exceeding 5,000 rupees ($60) should also be exempted from tax," Mazumdar-Shaw said.
• Calls to government representatives over the weekend seeking comment went unanswered. The government in July exempted three cancer drugs from customs duty and slashed taxes on some of them.
• There is usually a 12% tax on medication for chronic diseases, said Rajiv Singhal, general secretary of the All India Organisation of Chemists and Druggists. (Reuters)

After Finance Minister Nirmala Sitharaman's announcement during last budget calling for a comprehensive review of the Income Tax Act, 1961, the CBDT has set up an internal committee to manage the review process. The goal is to streamline the Act, making it more concise, clear, and easier to understand, which would help reduce disputes, litigation, and provide greater tax certainty for taxpayers. In addition, 22 specialized sub-committees have been formed to assess various aspects of the Act.

As per PTI, the committee responsible for revising the income tax law is deliberating whether the replacement for the 63-year-old Income Tax Act should be split into two or even three parts. While the government had initially planned to release a draft law for public feedback, it has now opted for a more assertive approach in response to criticism of the current complex tax laws. The bill will be introduced first, allowing for adjustments based on input from taxpayers and experts before it is finalised.

IIFL Securities, in its latest note on the telecom sector, stated that the government is considering a potential partial waiver of AGR dues, which could reduce the liabilities of Bharti Airtel Ltd and Vodafone Idea Ltd (VIL) by Rs 38,000 crore and Rs 52,000 crore, respectively. Some reports suggest that this relief may be announced in the Union Budget on February 1. If the relief is granted, IIFL Securities anticipates a per-share upside of ₹62 for Bharti Airtel, Rs 7 for VIL, and Rs 29 for Bharti Hexacom Ltd.

The government is expected to introduce a new income tax bill during the upcoming Budget session of Parliament, aiming to simplify the current tax laws, enhance clarity, and reduce its length by approximately 60 percent. In her July Budget, Finance Minister Nirmala Sitharaman had announced a comprehensive review of the six-decade-old Income Tax Act of 1961, with a target to complete it within six months. According to a source quoted by PTI, the new Income Tax law will be presented in the Budget session as a completely new law, rather than an amendment to the existing Act.

Good morning and welcome to our live coverage of Union Budget 2025. Union Finance Minister Nirmala Sitharaman is set to present the second full Budget of the Narendra Modi government after the 2024 Lok Sabha Elections on February 1, 2025. Reports suggest that the government may introduce tax breaks for individual taxpayers and implement new measures to make the new tax regime more appealing.