This time the budget is expected to see major changes on the lines of GST and many other reforms in the customs duty structure to boost the economy amid global geopolitical uncertainty.Image Credit source: ChatGPT
Finance Minister Nirmala Sitharaman will present her ninth consecutive budget in the Lok Sabha on February 1. This time the budget is expected to see major changes on the lines of GST and many other reforms in the customs duty structure to boost the economy amid global geopolitical uncertainty. The budget may also focus on reducing the debt to GDP ratio, as India’s fiscal management is now moving towards reducing the debt burden rather than just managing the deficit. For individual taxpayers, who got a big relief last year from income tax exemption of up to Rs 12 lakh and subsequent cut in GST rates, this time a further increase in the standard deduction is expected.
Expectations regarding Income Tax Act
The industry hopes that clear rules and guidelines will be issued in the budget regarding the new and simplified Income Tax Act 2025, which will come into effect from April 1. Some new incentives can be given to make the new tax system attractive, so that more people leave the old system and adopt the new system. Along with this, various categories and rates of TDS can be further simplified by reducing them.
customs reform
As part of reforming the customs system, emphasis can be laid on reducing rates and simplifying procedures. Besides, an amnesty scheme can also be introduced to resolve about Rs 1.53 lakh crore stuck in disputes. The budget allocation for the defense sector is likely to increase, as there is a situation of tension at the global level. Budget provision can also be made for a new scheme for rural areas under ‘Developed India – Employment and Livelihood Mission’ with the participation of the Center and the States.
Announcement of commission on 8th
The 8th Pay Commission is expected to be announced for government employees, which can be implemented from January 1, 2026. The share of taxes received by the states may also increase as per the recommendations of the 16th Finance Commission. Special concessions are expected for the MSME sector and industries like gems, jewelery and leather. Apart from this, funds can also be given in the budget for mining and processing of important minerals like lithium and cobalt.