As Union Budget 2025 approaches, investors are weighing the potential of Indian railway stocks like IRCTC, IRFC, RVNL and Railtel. Could this be the right moment to jump into railway investments?
Budget 2024 removes indexation benefits for property sales and reduces LTCG tax from 20% to 12.5%. CLSA expects negative impact on shorter duration investments with moderate price growth.
Budget 2024: Indexation will be provided at price in 2001 or at which the property was bought plus indexation till 2001 whichever was lower, explains government official in a media interaction relating to capital gains tax
Budget 2024: Many landlords tend to show their rental income wrongly under ‘profits and gains of business and profession’ instead of ‘income from house property’. Now, the government has tweaked rules to prevent this tax avoidance.
The LTCG tax rate on property sales has decreased from 20% to 12.5%, but the indexation benefit has been eliminated. Previously, this benefit allowed the adjustment of purchase prices to account for inflation, thereby lowering taxable profits.
Wooing the middle class ahead of the upcoming general elections, Finance Minister Nirmala Sitharaman on Thursday announced that the government will launch a housing scheme for those who are living in rented accommodations or slums to buy or build their own houses
Happy New Year 2025: For a financially healthy 2025, set monthly savings goals, track expenses, and build an emergency fund. Focus on retirement planning and employ tax-saving strategies. Insurance is vital for security, and cautious investment approaches can help safeguard your financial future
Determine the future value of your investments made through systematic investment plans (SIPs)
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Budget 2025: A Glimpse into India’s Finances
As India prepares for the Union Budget 2025, the economic landscape of the world’s fifth-largest economy is expected to undergo transformative changes. The Union Budget, traditionally delivered by the Finance Minister, plays a pivotal role in shaping the nation’s economic policies. From deciding capital expenditure to setting fiscal deficit targets, the Budget lays the groundwork for India’s growth story.
Historical Overview of India’s Union Budgets
India’s Union Budget has seen significant changes over the years. From Jawaharlal Nehru’s post-independence budgets to Nirmala Sitharaman’s digital-first approach, the Indian economy has evolved.
Early Years (1947-1970s): In the early years, the union budgets were focused on laying the foundation for economic development, with heavy investments in public sector enterprises and industrialisation.
1980s and 1990s: The economic liberalisation policies of the 1991 budget under Finance Minister Manmohan Singh led to big-bang reforms, reducing import duties and encouraging private sector participation.
2000s: The 2004-2009 period, led by P. Chidambaram, focused on inclusive growth, prioritising social welfare programs and rural development.
Recent Budgets (2019-2024): In recent years, especially under the leadership of Finance Minister Nirmala Sitharaman, there has been a shift towards digital infrastructure, tax reforms, and a push for a $5 trillion economy by 2024.
Each of these phases reflects the government’s response to the socio-economic challenges of their times. Budget 2025 is expected to continue this trend, providing clarity on future strategies.
Key Highlights from Previous Budgets
In the past few years, India’s Union Budgets have introduced several significant reforms that continue to shape the country’s economic development. Let’s look at some of the major announcements from recent budgets:
Budget 2024: Focus on Digital Economy and Green Growth
Tax Incentives for Startups: The 2024 budget introduced a slew of measures aimed at encouraging innovation, with tax exemptions for startups and greater incentives for Research & Development (R&D).
Green Energy Investments: The government earmarked substantial funds for solar energy, electric vehicles, and eco-friendly infrastructure. These initiatives are expected to tackle climate change and boost job creation.
Digital Infrastructure: With the country’s push for a digital economy, Budget 2024 saw the introduction of 5G spectrum allocation, along with further investment in the Digital India program.
Budget 2023: Relief Measures Amid Economic Uncertainty
Direct Cash Transfers: To combat inflation, the 2023 budget allocated direct cash transfers to economically weaker sections of society.
Social Welfare Schemes: The PM Gati Shakti and Atmanirbhar Bharat schemes were further expanded, focusing on improving logistics, infrastructure, and self-reliance.
Agriculture Support: The government doubled down on schemes for farmers, offering subsidies on fertilisers, low-interest loans, and better crop insurance options.
Budget 2022: Fostering Economic Recovery Post-Pandemic
Atmanirbhar Bharat 2.0: Focused on the self-reliance movement, creating an indigenous manufacturing ecosystem, and reducing dependence on imports.
Healthcare Funding: The healthcare budget saw a massive boost, with funding for COVID-19 vaccination, health infrastructure, and mental health support.
Infrastructure and Employment: A focus on reviving the construction sector led to increased funding for roads, railways, and housing projects.
What to Expect in Budget 2025
As the Indian government gears up for the 2025 Union Budget, several areas may get special attention. The key expectations for the Budget 2025 include:
1. Tax Reforms and Simplification
There is huge expectation that the government will introduce comprehensive tax reforms, providing relief to the middle class and corporates. Income tax slabs under the new regime may be revised, offering higher tax exemptions, while efforts to broaden the tax base are likely to continue.
2. Focus on Green and Sustainable Development
Given the growing concerns about climate change, the 2025 Budget is likely to focus on green growth initiatives. There is an expectation for higher investments in renewable energy, electric vehicles, and sustainable agriculture. Incentives for businesses adopting eco-friendly practices and green technologies may be introduced.
3. Infrastructure and Job Creation
A central theme in Budget 2025 will be job creation. With millions of young people entering the workforce, the government is expected to increase its focus on infrastructure projects that generate employment. We may see higher allocations for smart cities, national highways, railway modernisation, and rural connectivity.
4. Healthcare and Education
Post-pandemic, healthcare remains a critical area for policy focus. The government is likely to increase the allocation for healthcare, aiming to improve primary care infrastructure, medical education, and mental health services. Similarly, the education sector may see an emphasis on promoting digital education and addressing skill gaps for youth.
5. Rural Development and Agriculture
In Budget 2025, there could be further initiatives to support the agriculture sector, which has struggled with low productivity. Policies aimed at agriculture mechanisation, subsidised insurance, and better irrigation facilities are anticipated. Special schemes for small and marginal farmers might also be announced.
Conclusion
Budget 2025 will be a defining moment for India’s economic trajectory. As the government continues to address ongoing challenges such as job creation, inflation, and sustainability, the budget’s announcements will set the tone for the nation’s future growth. Budget 2025 can potentially shape India’s economy for the next decade with a focus on inclusive development, digitisation, and green initiatives.