Budget 2025 is expected to boost capex in aerospace, defense, and logistics, support real estate growth with tax reliefs and GST reforms, and promote AI innovation and sustainability. Key priorities include revised income tax slabs, enhanced health insurance and housing deductions, capital gains tax reforms, debt fund benefits restoration, and measures to stimulate investments and economic growth.
Aerospace and Defiance: Call for Increased Capex
There is a need for greater capital expenditure in the aerospace and defense sector. He noted that the ₹6.21 lakh crore defense budget allocation in 2024 demonstrated the government’s intent to modernize capabilities. Key highlights:
- Anticipation of increased capex to support long-term capability building.
- Hope for expanded support for indigenous manufacturing and enhanced public-private partnerships.
- Encouragement of policies to position India as a global leader in aerospace innovation.
Real Estate Sector: Growth and Sustainability
Tax Relief for Homebuyers
- Policies promoting sustainable development and infrastructure enhancement.
- Extension of capital gains benefits and flexibility in reinvestment standards.
- Measures to accelerate job creation and support economic growth
Support for Tier-II Cities
- Higher tax deductions on home loan interest.
- Simplified GST rates for better housing affordability.
- Single-window clearance to reduce project delays and costs.
GST Rationalization for Under-Construction Properties
- Incentives for green and sustainable real estate projects.
- Relaxation of FDI norms to attract private and foreign investments.
- Enhanced liquidity for developers to foster growth.
AI and Sustainability: Scaling AI Adoption
- Investments in AI for Indic languages to boost accessibility.
- Sustainability initiatives to balance technological advancement and environmental goals.
- Collaborative measures to address the rising energy demands due to AI advancements.
Capital Gains Tax: Encouraging Reverse Flipping
The capital gains tax provisions for reverse flipping are expected to be reformed to incentivize:
- Tax neutrality in scenarios involving inbound mergers and swap of shares.
- Growth of startups seeking to list on Indian stock exchanges.
Logistics Sector: Increased Capex for Connectivity
- Enhancing multimodal connectivity.
- Supporting the government’s vision of reducing logistics costs and boosting GDP.
Capital Markets: LTCG and STT Revisions
Stakeholders highlighted concerns over the dual impact of:
- Increased STT and LTCG rates, which have deterred market participation.
- Recommendations to restore LTCG to 10% to promote long-term investments and market stability.
Mutual Funds: Tax Benefits and Debt Funds
The Association of Mutual Funds in India (AMFI) proposed:
- Restoration of long-term indexation benefits for debt funds to attract investors.
- Rollback of capital gains tax hikes to encourage retail participation.
Income Tax Reforms: Boosting Disposable Income
Key expectations include:
Revised income tax slabs or increased deductions to stimulate consumer spending.
Enhanced limits under Section 80D for health insurance premiums:
From ₹25,000 (₹50,000 for seniors) to ₹50,000 (₹1,00,000 for seniors).
Increased limits under Section 24(b) for home loan interest:
From ₹1.5 lakh to ₹2–3 lakh.
These reforms and allocations are anticipated to drive growth, innovation, and economic recovery across multiple sectors, aligning with India’s long-term development goals
