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Union Budget 2025-26: Key Expectations From Industry Leaders And Taxpayers

The Union Budget 2025-26 is set to be presented on Saturday, with hopes of striking a balance between economic growth and fiscal prudence while addressing the expectations of taxpayers, businesses, and key industries. Industry leaders and experts are eagerly anticipating measures that would drive consumption, incentivize capital expenditure, and support critical sectors such as real estate, MSMEs, healthcare, artificial intelligence (AI), electric vehicles (EVs), and renewable energy. Furthermore, continued fiscal consolidation remains a key expectation.

One of the most awaited aspects of the budget is tax relief for both individuals and businesses. Taxpayers are hopeful for changes in tax slabs under the new tax regime, with expectations for an increase in exemption limits and standard deductions. There is a growing demand to make annual income up to Rs10 lakh tax-free. Moreover, taxpayers expect an increase in the standard deduction limit, which currently stands at Rs50,000 under the old tax regime and Rs75,000 under the new tax regime.

On the business side, companies expect a growth-oriented budget while maintaining fiscal discipline. A FICCI survey revealed that 68 per cent of businesses are in favor of at least a 15 per cent increase in capital expenditure allocation to fuel economic growth. The government is expected to continue its fiscal consolidation roadmap, with a target of reducing the fiscal deficit from 4.9 per cent in FY25 to 4.8 per cent and further aiming for 4.5 per cent in FY26.

Industry stakeholders from various sectors have outlined their specific expectations. The real estate sector is advocating for tax rationalization, an increase in the home loan interest deduction limit under Section 24(b) from Rs2 lakh to Rs5 lakh, and relief in long-term capital gains (LTCG) tax. Meanwhile, the healthcare sector is seeking increased spending, pushing the share of healthcare to 2.5 per cent of GDP, lower GST on health insurance premiums, incentives for digital health solutions like telesurgery and electronic health records, and reduced import duties on medical equipment.

For MSMEs, there is a demand for better credit access and incentives for technology adoption to drive sectoral growth. Meanwhile, new-age sectors like AI, EVs, and renewable energy are hoping for policy incentives and financial support to enhance innovation and industry adoption.

Tax reforms and simplification measures remain a focal point. Industry stakeholders are expecting the introduction of a modernized Direct Tax Code (DTC), which aims to simplify the 63-year-old Income Tax Act similar to the transformation achieved by GST in the indirect taxation space. A key request from businesses is the simplification of complex TDS/TCS provisions to reduce litigation and compliance burdens.

As India’s economic momentum remains strong, 60 per cent of businesses expect GDP growth to be between 6.5 per cent and 7 per cent in FY25. Additionally, there is an increasing focus on strengthening the collaboration between educational institutions and industries to ensure a job-ready workforce, particularly in sectors such as IT, healthcare, and manufacturing.

Infrastructure development and export competitiveness are also key expectations. Continued investments in roads, railways, and other critical infrastructure are expected to be a major focus of the budget. Businesses are pushing for logistics efficiency improvements and an extension of interest equalisation schemes to strengthen India’s global trade standing.

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