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Significant tax relief is expected by Budget 2025. Learn more!
As Finance Minister Nirmala Sitharaman gears up to table the Union Budget 2025 on 1st February, experts and analysts are voicing their Budget 2025 expectations. The budget is expected to target the economic and fiscal questions that the country is currently facing.
The Budget 2025 expectations will give individuals a peek into the possible budget provisions and enable prudent financial planning ahead of the budget 2025. This blog explores the expectations and suggestions voiced by various industry experts and analysts to empower readers with income-tax, capex, GDP and other anticipations.

Striving for a significant economic push
The government is expected to target the fiscal deficit to ensure sustainable economic growth in 2025-26. The Union Budget 2024 had an estimated fiscal deficit of 4.9% of GDP.
Reducing the fiscal deficit to 4.5% of GDP in FY26 might be the top priority of Budget 2025. At 54.4%, the debt-to-GDP ratio is far higher than the FRBM (Fiscal Responsibility and Budget Management) goal of 40%.
Raising the aggregate investment rate assessed at constant prices to 34% may be necessary to meet a medium-term real GDP growth objective of 6.5% or more. It is key to ensure sustained economic growth.
A gradual decrease in interest rates may be taken into consideration to encourage investment from the private sector. Additionally, to boost urban demand and sustain economic momentum in FY26, specific job programs may be accelerated.
Taxation
The union government is expected to simplify the taxation policy. The finance ministry has also invited public comments on policy decisions. According to some sources, the incoming Union Budget 2025 is anticipated to aim for a gross tax revenue (GTR) rise of 10.5–11% above the FY25 revised estimates (RE).

There are two types of taxes. Expectations regarding each of these are listed below.
Direct tax
Taxes that are imposed directly on individuals and entities are called direct taxes. It is levied on individuals in the form of personal taxes and corporations through corporate tax.
Income tax has become simplified under the new tax system. Additionally, a ₹7 lakh exemption implies that taxpayers would pay no taxes on the same amount of income as before. Therefore, Budget 2025 expectations state that when the Income Tax Act undergoes a thorough review on February 1, the government might consider this and establish the new system as the sole regime.
Due to the cost of inflation, experts and analysts are expecting an easing of tax rates. Significant tax relief is expected by Budget 2025 experts in the form of an additional 25% tax band for income levels between ₹15 lakh and ₹20 lakh. It would increase consumption expenditure.
- Corporate Taxation
The Tax Deducted at Source and Tax Collected at Source policies are expected to continue. The industry, experts and analysts are looking forward to the simplification of TDS/TCS policies in Budget 2025. Relaxing and simplifying compliances can lead to better performance of the organised sector.
Indirect Tax
The increasing inflation has reduced disposable income, resulting in a fall in demand for commodities. This trend has resulted in a falling performance of many industries, especially FMCG.
In this scenario, the industries are hoping for GST reforms that can surge demand. Some specific expectations from Union Budget 2025 are listed below.
- Restoring the GST Input Tax Credit, which would lower operating expenses and give the industry much-needed relief, is one of the main issues.
- The Service Export from India Scheme (SEIS) might be reinstated.
- Lowering the GST on environmentally friendly products would promote the adoption of sustainable packaging.
- It is anticipated that intermediary services rendered to individuals outside of India will receive exemptions from GST under the Budget 2025.
Expected Capex
Some experts and analysts believe that the capex target could be set at 3.1% of GDP.
The decline in capital expenditures has contributed to the subsequent downturn in GDP growth, which dropped from 8.2% in FY24 to 6.0% in H1 FY25. Therefore, an increase in capex in budget 2025 can promote GDP growth.
However, some experts believe that the increase in capex might be lower than before. In contrast to the 17% increase in FY24 and the strong growth in the three years previous, the Union Budget 2025 is expected to declare a 13% increase in public capital expenditures.

Household income and fiscal discipline
The experts are emphasising increasing household income rather than spending alone. India’s formal economy may be strengthened by providing non-inflationary help to MSMEs, which account for over 30% of GDP and support the construction industry, a major employment.
Conclusion
The growth trajectory of the Indian economy requires strong provisions detailed in Budget 2025. The expansion of businesses requires a simplified taxation policy and government support. Administrative aid through the Union Budget 2025 can give a competitive advantage to businesses in both domestic and international markets. Moreover, as suggested by multiple experts, the budget 2025 requires a boost to consumer demand through easing taxes and increasing capex. Union Budget 2025 expectations might enable traders and investors to take advantage of early trends. However, they must perform due diligence before investing.
DISCLAIMER: This article is not meant to be giving financial advice. Please seek a registered financial advisor for any investments.
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