Expectations from Union Budget 2025

Disclaimer: The opinions expressed in this answer are those of the writer, Ritij Saini, and do not represent the views of our platform.

Income Tax (IT) Related

• What are the expectations regarding the 0% Income Tax slab?
  The 0% IT slab should be increased to INR 1 crore/year income. IT on income greater than INR 1 crore should be applied at the slab rate of 30%.
• Should agricultural income be taxed under Income Tax?
  Yes, agricultural income should be brought under normal IT slabs.
• What is the expectation for taxation on short-term and long-term capital gains (STCG and LTCG)?
  Tax on STCG and LTCG, including gains on property, should be brought under IT slabs.

GST (Goods and Services Tax) Related

• Should petrol and diesel be brought under GST?
  Yes, petrol, diesel, and other fuels should be brought under GST.
• What are the suggested GST rates for different types of fuel?
  - Normal petrol: 28% GST
  - Diesel: 35% GST
  - Ethanol-based petrol: 5% GST (to promote sugarcane farming in Maharashtra).
• Should residential and commercial rent be taxed under GST?
  Yes, GST at 35% should be applicable for residential and commercial rent under the Reverse Charge Mechanism (RCM). Currently, only 18% GST is applicable on commercial rent.
• Should property transactions be taxed under GST?
  Yes, GST at 0.5% should be applicable on all property transactions to help reduce black money in real estate.
• Should GST be applied to home loan EMIs?
  Yes, GST at 35% should be applicable on home loan EMIs to curb rising real estate costs.
• Should GST be applied to foreign education loan EMIs?
  Yes, GST at 35% should be applicable on foreign education loan EMIs to curb the trend of going abroad for education and promote fulfilling the Indian dream.
• Should mutual fund and stock market transactions be taxed under GST?
  Yes, GST at 5% should be applied to all mutual fund and stock market transactions.

Startup and Business Support

• Should more funding schemes be introduced for startups and small businesses?
  Yes, more funding schemes should be introduced for startups and small businesses at the pre-seed/pre-revenue stage.
• What changes are expected in the Startup India scheme?
  The requirements to avail the INR 10 lakh grant under the Startup India scheme should be relaxed.
• Should small businesses and startups receive collateral-free and interest-free loans/grants?
  Yes, collateral-free loans and interest-free grants should be offered to small businesses and startups, respectively, up to the amount of INR 1 crore.
• What challenges do startups face with venture capitalists (VCs)?
  Startups in the pre-seed/pre-revenue stage face issues in raising funds as VCs often demand revenue before considering pitch decks. The government should intervene to address this market failure.

Liberalized Remittance Scheme (LRS)

• What changes are expected in the LRS scheme?
  The LRS scheme should be relaxed to $1 million/year, and Tax Collected at Source (TCS) should be removed from LRS transactions.