Introduction to Budget 2025: What’s New in Taxation?                                                                                                                                                                                                                                              The much-anticipated Budget 2025 has introduced a wave of tax amendments aimed at simplifying processes, encouraging economic growth, and making taxation more equitable. As the government strives to align with its vision of a $5 trillion economy, there have been significant changes made to income tax, corporate tax, and various sector-specific taxation policies. These reforms aim to enhance compliance, reduce the burden on taxpayers, and incentivize investments. Key highlights include revised income tax slabs, enhanced standard deductions, and targeted tax exemptions to stimulate economic activities.                  Key highlights-                                                                                                                                                                                                                                                                     ·       The adjustments are made by prioritizing on the needs of middle-class households.                                                                                                                                                 ·       Tax rates have been revised for individuals with annual earnings of up to ₹5,000,000.                                                                                                                                               ·       Corporate tax rate of 15% is implemented for new manufacturing units under the Make-in-India program.                                                                                                         ·       A standard deduction of ₹50,000 is now available for salaried individuals and pensioners.                                                                                                                                     ·       The integration of tax slab adjustments and reforms reflects a well-rounded approach to fiscal management.

 Tax Amendments for Individual Taxpayers in 2025                                                                                                                                                                                                                                                       The Budget 2025 has brought several significant changes for individual taxpayers, focusing on easing the tax burden and incentivizing savings. Here are the primary amendments:                                                                                                                                                                                                                                                                                                                 1. Revised Income Tax Slabs: The government has introduced a new tax regime with simplified slabs. For instance, individuals earning up to ₹2.5 million annually              are now subject to lower tax rates, with exemptions for savings and investments continuing under Section 80C. Taxpayers earning between ₹2.5 million and ₹5            million will benefit from marginal reductions in tax liability.                                                                                                                                                                                                                     2. Enhanced Standard Deductions: To provide additional relief to salaried individuals and pensioners, the standard deduction has been increased to ₹50,000.                This  change ensures that taxpayers retain more disposable income, boosting consumption and overall economic activity.                                                                               3. Tax Exemptions for Family Pension: Budget 2025 has also introduced a significant provision for families receiving pensions. Annual value up to ₹50000 is now            exempt from taxation to provide financial support for families reliant on pension income.                                                                                                                                                                 4. Tax Incentives for Homebuyers: First-time homebuyers are eligible for additional deductions under Section 24(b) for interest paid on housing loans. The                        deduction has been increased from ₹2 lakh to ₹2.5 lakh promoting greater investment in the real estate sector.                                                                                                      5. Focus on Digital Transactions: Tax rebates for individuals using digital payment modes for specified transactions have been enhanced. Under the new tax                    regime, individuals can avail a rebate up to ₹25000. This aligns with the government’s push for a cashless economy.

Corporate Tax Reforms in Budget 2025                                                                                                                                                                                                                                                                         Corporate tax reforms in Budget 2025 emphasize promoting entrepreneurship, reducing the compliance burden, and fostering growth in key industries. The major changes include-                                                                                                                                                                                                                                                                                                                             1.  Incentives for Private and Public Limited Companies: Tax incentives have been introduced for private limited companies and public limited companies involved         in research and development, renewable energy, and infrastructure development. These incentives include additional depreciation and deductions under                       Section 35(2AB).                                                                                                                                                                                                                                                                                                                                       2. Reduced Compliance for Small Businesses: Proprietorship and small enterprises have benefited from reduced compliance requirements and tax filing                             processes. Simplified return forms and extended deadlines have been introduced to ease operations.                                                                                                                           3. Sector-Specific Tax Holidays: Start-ups in technology, green energy, and healthcare sectors are eligible for a 3-year tax holiday, if registered under the Start-            up  India initiative. This step is aimed at encouraging innovation and entrepreneurship.

Sector-Specific Tax Changes: Insights for SMEs and Start-ups                                                                                                                                                                                                                     Small and Medium Enterprises (SMEs) and start-ups form the backbone of Indian economy. Budget 2025 has rolled out targeted tax reforms:                                                      1.Tax Incentives for SMEs: SMEs can now benefit from higher deductions under Section 44AD, as the presumptive taxation scheme’s threshold has been                             increased from ₹2 core to ₹3 core to streamline compliance and minimizing paperwork.                                                                                                                                                                         2.Tax Relief for Start-ups: Start-ups registered under the DPIIT (Department for Promotion of Industry and Internal Trade) are entitled to tax exemptions for the              first five years of their operation. Additionally, start-up tax exemptions have now been expanded to cover foreign investors, facilitating a more seamless                            fundraising process.                                                                                                                                                                                                                                                                                                               3.Support for Proprietorships: Sole proprietors can benefit from increased limits on deductions for business expenses. The ceiling for tax-deductible expenses,         such as rent and utilities, has been raised to promote self-employed individuals.                                                                                                                                                                               4.Tax Incentives for Digital Adoption: SMEs adopting digital payment solutions or upgrading their IT infrastructure can claim deductions under a newly                                introduced section. This aligns with the government’s vision of a digital-first economy.                                                                                                                                                               5.Ease of GST Compliance: GST reforms for SMEs include quarterly filings for businesses with turnovers up to ₹5 crore, along with streamlined refund processes            to enhance cash flow and reduces compliance costs.

How the Budget 2025 Tax Amendments Impact the Economy?                                                                                                                                                                                                                                The tax amendments introduced in Budget 2025 are expected to have far-reaching effects on the Indian economy, driving growth, equity, and sustainability. Key impacts include:                                                                                                                                                                                                                                                                                                                                         1.Boosting Disposable Income: Adjustments to standard deductions and tax slabs provide individuals with more disposable income, potentially boosting                           consumption and driving growth in industries such as retail, real estate, and travel.                                                                                                                                                                                 2.Encouraging Investments: Lower corporate tax rates and targeted incentives encourage businesses to expand, undertake new projects, and generate                           employment, particularly in manufacturing and technology sectors supported by the Make-in-India initiative.                                                                                                                         3.Promoting Innovation: Tax holidays and incentives for start-ups play a key role in cultivating an innovative ecosystem, motivating entrepreneurs to develop                   solutions in areas like healthcare, renewable energy, and digital transformation.                                                                                                                                                                       4.Strengthening SMEs: Enhanced deductions and simplified compliance measures ensure that SMEs have the required resources and support they need to                     thrive  to contribute significantly to employment and GDP.                                                                                                                                                                                                                                 5.Aligning with Sustainable Development Goals (SDGs): By incentivizing investments in renewable energy and green technologies, Budget 2025 is aligned to             the fiscal policy with global sustainability goals. Tax incentives for electric vehicles and solar power installations exemplify this commitment.                                               6.Digital Economy Growth: Rebates for digital transactions and IT infrastructure adoption ensure that India moves closer to becoming a cashless and                                    technologically advanced economy.

Conclusion                                                                                                                                                                                                                                                                                                                                                  The 2025 Budget marks a pivotal shift for taxation in India. By introducing taxpayer-friendly reforms, incentivizing investments, and aligning policies with long-term                  economic goals, the government has created a robust framework for growth and development. Individuals, corporations, SMEs, and start-ups stand to benefit significantly    from these changes, ensuring that the vision of an inclusive, sustainable, and prosperous India becomes a reality