Budget 2025 Expectations highlights: Govt may introduce new income tax bill in Budget session

The upcoming budget holds significant importance as it will be the first full-year budget of the Modi 3.0 government. We anticipate major announcements aimed at benefiting the real estate and infrastructure sectors, which are critical growth engines for the economy and support numerous allied industries.

One key area of focus should be the rationalization of taxes and duties levied on homebuyers, which in many states exceed 12% of a property’s value. In the previous budget, the finance minister urged state governments to address this issue, but significant progress has yet to be made. We hope this budget includes provisions to streamline these charges and provide much-needed relief to homebuyers. Additionally, we urge the government to revisit the long-term capital gains (LTCG) tax on real estate and consider providing relief in this area.- Sahil Agarwal, CEO, Nimbus Group

Parliament's Budget Session will held from January 31 to April 4, with Finance Minister Nirmala Sitharaman set to table her eighth straight budget on February 1.

In line with the convention, the session will start with President Droupadi Murmu's address to a joint sitting of the Lok Sabha and Rajya Sabha on January 31 followed by the tabling of the economic survey.

"The Hon'ble President will address the joint sitting of both Houses on 31st January 2025 at 1100 Hrs in the Lok Sabha Chamber. Union Budget 2025-26 to be presented on 1st February, 2025 in the Lok Sabha," Parliamentary Affairs Minister Kiren Rijiju said in a post on X.

The government, in the ensuing Budget session of Parliament, is likely to introduce a new income tax bill which seeks to simplify the current I-T law, make it comprehensible and reduce the number of pages by about 60 per cent.

Finance Minister Nirmala Sitharaman in her July Budget had announced a comprehensive review of the six-decade old Income Tax Act, 1961, within six months.

"The new Income Tax law will be introduced in the Budget session of Parliament. It will be a new law and not an amendment to the existing Act. Currently, the draft law is being vetted by the law ministry and it is likely to be brought in Parliament in the second half of the Budget session,"a source said.

We also look forward to support for structured skilling programs, vocational training, application-based learning opportunities, and digital upskilling to align the workforce with emerging market demands. The reduction of interest rates on education loans will also help alleviate financial strain, enabling better access to education. We need to prioritize teacher training and development programmes as well as strengthen digital infrastructure to facilitate seamless learning experiences. Additionally, fostering partnerships with foreign educational institutions and promoting cultural exchange programs will enrich our educational offerings and nurture global citizenship among our students. There is also a need to upscale the education system to attract more foreign students to our country to promote India as a global study destination. Looking ahead, we must strive to ensure that the learning experience remains meaningful and enriching. Overall, addressing these issues and the need for increased investment in education are crucial in achieving equitable and inclusive education for all.- Shweta Sastri, Managing Director, Canadian International School, Bangalore

As the Union Budget approaches, we are hopeful that the government will prioritize education spending and implement policies that foster innovation, accessibility, and quality in schools. The budget should prioritize substantial investments in upgrading digital literacy among educators and fostering innovative teaching practices, ultimately enhancing educational outcomes nationwide. A higher allocation would support the establishment of new K-12 schools, enhance educational infrastructure to balance the urban-rural gap in education and improve overall educational outcomes across the country. The increased allocation of funds will also ensure better quality government schools that educate the majority of children in India. We also believe that digitalisation should be at the forefront, ensuring greater access to meaningful educational resources tailored to the student’s needs. Such investments are pivotal for preparing students to thrive in a digital-first world and ensuring equitable access to quality education.- Shweta Sastri, Managing Director, Canadian International School, Bangalore

There is a strong case for interest subsidy for first-time homebuyers as this will boost sales in the real estate sector. We also urge the government to implement tax reliefs in terms of reduction in GST rate along with an input tax credit on under-construction properties. We would also like to see announcements to enhance ease of doing business for the developers to create an overall positive climate for real estate investment. These initiatives would not only drive growth in the real estate sector but also stimulate demand around 250 ancillary industries, thereby boosting job creation across these sectors. We also hope that the government will continue to focus on more infrastructure development as it will help drive housing demand across the country. Overall, the real estate sector plays a pivotal role in the economy, contributing significantly to employment and GDP. Hence, the upcoming budget should introduce measures that will bolster this economic context. With NITI Aayog projecting the sector’s market size to hit $1 trillion by 2030, it is imperative for the government to address these key issues, thereby creating a more efficient and investor-friendly environment.- Ramani Sastri, chairman & MD, Sterling Developers

As the country prepares for the Union Budget 2025, the real estate sector is hopeful for progressive reforms that could benefit homebuyers and the industry. This year, the demands go beyond the usual expectation of single-window clearance and industry status, which could unlock financial advantages and streamline project approvals. The government should raise the deduction limit for interest payment on home loans from the existing Rs 2 lakh a year to Rs 5 lakh, which will add momentum to the housing sector. For a large section of the population, affordability remains the biggest challenge and hence there should also be expansion in the definition of affordable housing as this would expand the benefits for homebuyers and hence boost the end-user demand.- Ramani Sastri, chairman & MD, Sterling Developers

The gaming industry is pushing for a reduction in GST following the substantial 1400% increase implemented in October 2023, says Amrit Kiran Singh, President of the Skill Online Games Institute (SOGI), reports Mint. Singh highlighted the potential of the $300 billion global online gaming industry to significantly contribute to India’s GDP growth and job creation, much like the IT sector has done in the past.

He criticized the tax hike, introduced with a moralistic intent, stating that it has failed to achieve its objectives. Instead, 83% of Indian player spending has migrated to untaxed offshore platforms, predominantly Chinese, due to challenges like "domain farming." These platforms remain beyond the reach of Indian tax authorities. Singh urged the government to fulfill its promise to review the tax framework and address the "abnormally high taxes" that have hampered the domestic gaming industry's growth. A corrective approach is essential to bring the gaming economy back on track and encourage local participation.

Puneet Arora, Managing Partner of Biz Staffing Comrade Pvt Ltd, highlights the transformative factors reshaping businesses and the talent landscape, including the growing skills gap, job flexibility, shifting organizational priorities, and the rise of AI. He emphasizes the need for the Union Budget 2025 to allocate more funds for structured skilling programs in emerging technologies to bridge critical skill gaps. Encouraging tax deductions for professional training courses could promote lifelong learning, enhancing workforce competitiveness.

Arora also calls for measures to support employee welfare, simplify compliance, and promote formal job creation. He advocates for granting the staffing industry "industry status" to recognize its pivotal role in employment generation, talent development, and economic growth. He underscores the importance of encouraging women to re-enter or remain in the workforce, fostering a balanced professional landscape. Additionally, promoting sustainable employment and micro-entrepreneurship is essential to drive India’s economic development. Arora urges the government to use the Union Budget 2025 to lay a roadmap for sustainable and inclusive employment growth, ensuring the benefits of economic progress are widely shared across sectors.

Akash Khurana, President and CEO of Krisumi Corporation, anticipates significant reforms in the Union Budget 2025 aimed at driving economic growth and enhancing efficiency across sectors, including real estate. As one of the largest contributors to the GDP, the real estate sector holds the potential to catalyze growth. Khurana emphasized the need to raise the tax deduction limit on housing loans from the current ₹2 lakh per annum to ₹5 lakh, which could significantly boost housing demand. He also expects the government to maintain its focus on infrastructure development, citing its multiplier effect on the economy. Additionally, incentives for green and eco-friendly housing could help increase the supply of sustainable units, aligning with the government’s emphasis on sustainable development.

The Union Budget 2025 may allocate a 15-20% hike in capital expenditure for Indian Railways for FY26. This increase could raise the total allocation to over ₹3 lakh crore, compared to ₹2.65 lakh crore in the current fiscal year. The national transporter is focused on utilizing its existing funds effectively while gearing up for this substantial boost in investment.

According to market expert Abhijit Bhave, the Managing Director and CEO at Equirus Wealth, while certain risks like inflationary pressures and geopolitical tensions appear to have been factored into the markets, uncertainties persist around the extent of global monetary tightening and potential fiscal slippages.

Bhave emphasized the importance of monitoring US bond yields, which are influencing global market trends. "The sharp rise in yields to 4.75% reflects expectations that Trump-era policies could drive inflation. Any cooling in yields could trigger a rally in emerging markets," he noted. With over 25 years of experience in scaling wealth management ventures in India and abroad, Bhave advises market participants to remain vigilant amid these evolving dynamics.

In the Union Budget 2025, announcements on capital expenditure, special incentives for sectors like renewables, infrastructure, and manufacturing and some tax relief for individuals could bolster market sentiment, said Abhijit Bhave, the Managing Director and CEO at Equirus Wealth.

As Budget 2025 approaches, we are at a pivotal point in history, where big international brands look to diversify their sportswear supply chains. India is the best long term stable and scalable alternative. To capitalise on this opportunity we hope for streamlined import policies for critical raw materials like yarn, fabric, and machinery, essential for driving global competitiveness in the Sportswear and technical textile industry. Policies like QCO and BIS, restrict access to high-quality raw materials, and restrict our ability to play a key role. We need to work with all supply chains for a few years. Meanwhile, we incentivize the local manufacturers to build capability by investing heavily in R&D, technology, scale and automation for manufacturing raw materials to global standards. Additionally, clear directions on Employment Linked Incentive schemes and increased support for sustainability improving infrastructure will be helpful. Robust export incentives would further position India as a leader particularly in the growing sportswear segment. -  Sunil Jhunjhunwala, Co-founder & Managing Director, TechnoSport

All of India's energy transition efforts over the past 8 years to rapidly increase renewable energy capacity generation or energy storage is barely meeting the country's growing demand for cooling either for buildings, data centres or industrial parks. We hope the budget adopts a holistic approach for the energy transition to instead become a cooling transition with more focus on efficient demand management instead of simply adding electricity supply. District Cooling has the potential to cut energy demand by upto 50% for buildings, data centres and manufacturing facilities that require process cooling. In addition, it accelerates circular energy systems to re-use waste, sewage and other forms of energy including city gas to more rapidly decarbonize India whilst powering our economic growth. With increasing heat stress likely to have the most significant climate impact in India in the near term we look forward to policies that can instead mandate and incentivize systemic changes in the way India keeps cool. - Sudheer Perla Managing Director, Tabreed Asia

HEJJE is hopeful that the 2025 Budget will significantly strengthen the healthcare sector, driving economic growth and sectoral advancement. We expect the government to allocate 2.5-3% of GDP to healthcare, as recommended by the National Health Policy, prioritizing infrastructure upgrades, hospital bed capacity, and diagnostic services in underserved regions. Tax reforms to enhance affordability and accessibility are critical for equitable care. We also anticipate increased funding for preventive healthcare through awareness campaigns and programs to ease the burden of chronic diseases. Policies focusing on transition care, holistic recovery, and personalized treatments will improve patient well-being. With strategic investments and reforms, this budget can transform healthcare into a cornerstone of economic progress and societal health. - Sunder Ram, Co-Founder, Hejje

• Reduction in GST rates on cosmetics and skincare products from 18% to 12% to enhance affordability and stimulate demand.
• Simplification of export procedures and tax incentives to promote the global competitiveness of Indian beauty products.
• Support for sustainable practices and initiatives to boost domestic manufacturing.
• The industry is banking on these measures to ensure robust growth and global recognition for Indian beauty brands.

The Budget Session of Parliament is set to commence on January 31 and will be conducted in two parts. As per tradition, the session will begin with President Droupadi Murmu addressing a joint sitting of the Lok Sabha and Rajya Sabha. This will be followed by the presentation of the Economic Survey on the same day.

Union Finance Minister Nirmala Sitharaman is scheduled to present her eighth consecutive Union Budget on February 1, a significant event in the legislative calendar.

The first phase of the session will conclude on February 13, during which both Houses will engage in a debate on the Motion of Thanks for the president’s address. The debate will culminate in a reply by Prime Minister Narendra Modi in both chambers of Parliament.

The second part of the session is expected to reconvene after a recess, from March 10 to April 4. This phase will focus on discussions and approval of the Demand for Grants and the passage of the Finance Bill, among other legislative matters.