On February 1, 2025, the Hon'ble Finance Minister presented the Budget, marking the completion of 10 years of the Modi Government and her 8th consecutive year of presenting the Budget. The Finance Minister announced several policy and tax measures aimed at promoting growth. Among these, two key tax proposals stand out: (i) introduction of a New Income Tax Code within a week; and (ii) increased disposable income for the middle class through changes in slab rates across the board. It is noteworthy though that the expectations and demand for a concessional tax rate for manufacturing companies were not addressed. Additionally, no measures were announced to reduce the litigation backlog. On an overall basis, the direct tax proposals introduced by the Finance Minister are expected to accelerate India's growth, enhance consumer spending, and increase private investment. On the indirect tax front, while we still missed a Customs Amnesty Scheme, a lot of surprises were in store. Hitherto, importers had to either knock on the doors of High Courts or prod the Department to get provisional assessments finalized in contentious cases. Therefore, prescribing a limitation of two years for finalization of provisional assessments is definitely a welcome move. Please click on Download PDF for our summary of the key tax changes that have been proposed.
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