The Finance Minister presented Union Budget 2025 with several significant changes to direct and indirect taxes. Here is a detailed breakdown of what it means for individual taxpayers and businesses.
The Union Budget 2025 has introduced several pivotal changes that will impact both individual taxpayers and corporate entities. Our expert team at VAP & CO has analyzed the Finance Bill to bring you the most critical updates.
1. Changes in the New Tax Regime
The government has further incentivized the new tax regime by expanding the tax slabs and increasing the basic exemption limit. Taxpayers earning up to ₹8 lakh are now completely exempt from tax under the new regime due to enhanced rebates.
2. Corporate Surcharge Reduction
To boost domestic manufacturing and corporate investment, the highest surcharge rate for domestic companies has been reduced from 12% to 10%. This will slightly lower the effective tax rate for high-profit companies.
3. Focus on MSME Compliance
A new presumptive taxation limit has been proposed for MSMEs, increasing the threshold from ₹2 crore to ₹3 crore, provided that at least 95% of their receipts are through digital banking channels. This is a massive push towards formalization and digital payments.
