Mumbai, February 5, 2025: To raise awareness of the various tax and non-tax measures announced in the budget and their effects on trade and industry, World Trade Centre Mumbai and the All India Association of Industries (AIAI) organised an interactive discussion on the “Implications of Union Budget 2025-26.” A variety of budget changes to simplify tax structures and enhance company ease of doing business were addressed by tax experts and solicitors throughout the event.
Senior Counsel Mr. Firoze B. Andhyarujina offered his thoughts on the Budget’s direct tax-related clauses. Mr. Andhyarujina said that although taxpayers making up to Rs 12 lakhs might not be subject to taxes, those making more than Rs 12 lakhs will have their taxable income determined using Rs 4 lakhs plus the relevant surcharge and cess.
“There were 84 amendments, including three omissions, one insertion, and one deletion in the Income Tax Act,” he said, addressing simplicity and rationalisation as major budgetary issues. A number of tax laws have been decriminalised. There have been explanations given on TDS and TCS’s agreement. Additionally, TDS on education loans has been exempted; But only loans from financial organisations are excluded, which might be problematic for students trying to get financing from non-financial sources like charity trusts. Thirteen TDS and TCS-related clauses have been simplified overall.
Mr. Andhyarujina also emphasised the unconditional exemption from taxes on two dwelling units, which is a significant benefit for taxpayers. He also drew attention to the transfer pricing officer’s approach of continuity, which calls for preserving the arm’s length estimate that the assessing officer uses for three years.
However, Mr. Andhyarujina expressed reservations about the merger and acquisition clause change, pointing out that not all announcements were industry-friendly. Although an eight-year term has been established to carry forward the merging company’s losses, he pointed out that the new provision now specifies that the computation of this eight-year period would start from the year the loss was incurred rather than the year of the merger.
(From left to right): Capt. Somesh Batra, Vice Chairman, WTC Mumbai, Ms. Rupa Naik, Executive Director, WTC Mumbai, Dr. Vijay Kalantri, Chairman, WTC Mumbai, Mr. Firoze B. Andhyarujina, Senior Counsel, Ms. Aakruti Bagwe, Director- Operations, WTC Mumbai, Ms. Priya Pansare, Director- Trade Promotion, WTC Mumbai and Mr. Siddhartha Rastogi, Managing Director, Ambit Asset Management at the interactive discussion on ‘Implications of the Union Budget 2025-26’.
Mr. Andhyarujina went on to say, “A number of incentives have been introduced to boost the shipbuilding and maritime industry in India,” highlighting the budget’s primary priority areas of education, health, agriculture, and the maritime sector. Previously exclusively applicable to foreign leaving sea boats, the tonnage tax exemption has recently been expanded to include vessels in interior waterways. In a similar vein, the shipbuilding and shipbreaking sectors have benefited greatly from marketing.
In his remarks, Mr. M.S. Mani, Partner -Indirect Tax, Deloitte India highlighted the various initiatives announced in the budget to simplify customs duty structure and improve ease of trading across borders. Specifically, Mr Mani mentioned that the government reduced number of slabs in the customs duty structure by removing seven rates. In future, the government may further reduce the number of slabs to three to simplify and rationalise rate structure, he said.
Mr. Mani informed that the government reduced customs duty on many products and with this, the number of dutiable products taxed above 70% has fallen substantially. The government’s move to fix the timeline for finalisation of provisional bill of entry has shifted the responsibility of timely clearance of these documents to the tax officers rather than to the assessees.
Mr. Mani said the various tax measures announced in this budget indicate a positive outlook for future reforms to improve income tax and GST compliance by tracing supply and purchase data of the assessees. At the same time, Mr Mani suggested that the government could have announced a timeline for phased inclusion of petroleum products under the GST net to allow input tax credit for industries using fuel as raw materials.
Dr. Vijay Kalantri, Chairman, WTC Mumbai (left) felicitating Mr. M. S. Mani, Partner – Indirect Taxes, Deloitte India at the interactive discussion on ‘Implications of the Union Budget 2025-26’.
Speaking on the government’s efforts to support economic growth, Mr. Siddhartha Rastogi, Managing Director, Ambit Asset Management stated, “The Union Budget 2025-26 places a strong emphasis on increased government spending and tax reductions as key drivers of economic growth. Over the past decade, infrastructure spending has risen more than 3.5 times. However, despite this, signs of economic slowdown were evident due to weak private consumption, prompting the government to introduce tax cuts to boost disposable incomes. Under the new tax regime, out of 7.5 crore taxpayers in the country, 6.5 crore individuals earning up to Rs.12 lakh per annum are now exempt from paying taxes. This move enhances savings, increases liquidity, and stimulates consumer demand, ultimately driving economic activity.”
Mr. Rastogi also highlighted the government’s efforts to support domestic businesses, particularly through enhanced credit availability for MSMEs. “The credit guarantee cover for MSMEs has been doubled from Rs.5 crore to Rs.10 crore, along with an expanded definition of MSMEs. With nearly 1 crore registered MSME units contributing approximately 45% of exports and 37% to manufacturing, strengthening this sector is crucial for economic resilience and job creation,” he remarked.
Emphasizing the budget’s focus on logistics and infrastructure development, he added, “This year’s budget prioritizes the shipping and maritime industry, including the use of inland waterways and coastal transportation to improve supply chain efficiency. The government’s capital expenditure, including state government loans for capital expenditure and capex of public sector undertakings, has surged to Rs. 19 lakh crore from Rs. 17 lakh crore. Over the past decade, India’s turnaround times in infrastructure projects have also improved, reflecting a more efficient economic framework.”
In conclusion, Mr. Rastogi underscored the importance of evaluating the budget from a long-term economic perspective rather than short-term market fluctuations. “Stock market movements are influenced by multiple factors, and they should not be the sole indicator of budget effectiveness. The true focus of this budget is on stabilizing and propelling growth in the economy,” he stated.
Earlier in his welcome remarks, Dr. Vijay Kalantri, Chairman, WTC Mumbai welcomed the Union Budget and expressed hope that the various measures announced in the budget will support MSMEs, Startups, financial sector, maritime, agriculture, infrastructure and logistics.
Dr. Kalantri said, “This is one of the rare budgets where the government reduced taxes without imposing additional tax burden or cost on industry or individual taxpayers. The government could reduce tax rate because of strong buoyancy in tax collection. Indirect tax collection has grown 11% more than the budget estimate this year (FY25), while direct tax has grown 19% more than the estimate and corporate tax revenue has grown 14% more than the estimate.”
Dr. Kalantri pointed out that the tax cuts in the budget will support private consumption and revive sales of automobiles and consumer goods, which are facing slowdown in recent times.
Dr. Kalantri mentioned that recent volatility in the stock market is due to uncertain global environment amidst lingering fear of trade war, protectionist policies of foreign countries and so on. He raised optimism that the volatility will stabilise and Indian stock market will perform well in the medium term because of strong economic fundamentals.
Capt. Somesh Batra, Vice Chairman, WTC Mumbai proposed vote of thanks for the event. In his remarks, Capt. Batra welcomed the various budgetary announcements to support shipbuilding sector. Capt. Batra pointed out that India should upgrade capacity for manufacturing commercial cargo vessels as currently majority of the ships made in India are naval ships. Capt. Batra concluded his remarks by emphasising that a lot more can be done to promote manufacturing and foreign investment in India’s shipbuilding sector. Capt. Batra also suggested the government to improve ease of doing business to attract foreign investment.
The event was attended by members of trade and industry, financial institutions and academia.