One of the most anticipated aspects of the Union Budget 2025 is the potential revision of income tax slabs and rates. Taxpayers, particularly the middle class, are looking forward to relief measures that increase disposable income and stimulate consumption. Given the rising cost of living and inflation, individuals are expecting significant tax benefits that will provide them with higher take-home pay and greater purchasing power. The budget may also focus on streamlining tax compliance, increasing deductions, and incentivizing long-term savings to encourage financial security.

1. Revising Tax Slabs

• One of the biggest expectations is a revision in income tax slabs, which would provide relief to a vast segment of taxpayers.
• There is a strong demand to increase the basic exemption limit from ₹2.5 lakh to ₹5 lakh, ensuring that low-income earners do not fall within the taxable bracket.
• The government may also increase the threshold for the 30% tax rate from ₹10 lakh to ₹20 lakh, allowing middle-income earners to pay lower taxes and retain more of their income.
• A revised tax structure would reduce the tax burden on the salaried class, self-employed professionals, and small businesses, thereby boosting economic activity.
• If implemented, this change will align with the government's goal of increasing disposable income, which in turn could stimulate spending and economic growth.

2. Enhancing Section 80C Deductions

• Currently, the deduction limit under Section 80C of the Income Tax Act is capped at ₹1.5 lakh, which many financial experts believe is outdated.
• There is a growing demand to double this limit to ₹3 lakh, which would encourage individuals to invest in tax-saving instruments such as PPF (Public Provident Fund), EPF (Employees' Provident Fund), ELSS (Equity-Linked Savings Scheme), and National Savings Certificates (NSC).
• Increasing the limit would also help boost household savings and encourage investments in long-term financial products, benefiting both individuals and the economy.
• The government may also introduce new tax-saving instruments under this section, promoting retirement savings, insurance policies, and education funds.

3. Standard Deduction Increase

• The standard deduction for salaried individuals and pensioners is currently ₹50,000, which helps them reduce taxable income.
• To offset the impact of inflation and rising expenses, there is a strong push to increase this deduction to ₹1 lakh, providing more relief to middle-class taxpayers.
• If this proposal is accepted, it will particularly benefit salaried professionals, pensioners, and senior citizens who face high medical and daily living expenses.
• An increased deduction would also simplify tax compliance, as it provides a flat deduction without requiring any additional documentation.
• This measure would help counteract the erosion of purchasing power and ensure better financial security for millions of taxpayers.

In addition to the above measures, taxpayers are also expecting:

• Relief on capital gains tax for investments in stocks, mutual funds, and real estate.
• Incentives for digital transactions and startups through tax rebates and lower corporate tax rates.
• Further simplification of the new tax regime, making it more attractive than the old tax system.
• Tax benefits for gig workers and freelancers, recognizing their growing contribution to the economy.

With high expectations surrounding income tax reforms, the government faces the challenge of balancing fiscal responsibility and economic relief measures for taxpayers. If significant tax cuts and deductions are introduced, they could boost savings, increase investments, and drive overall economic growth.

The real estate sector, a major contributor to India's GDP, plays a critical role in employment generation, urbanization, and infrastructure development. As one of the most capital-intensive industries, stakeholders have high expectations from Union Budget 2025, advocating for reforms and incentives to stimulate growth, improve affordability, and attract investments. Given the challenges of high interest rates, liquidity crunch, and fluctuating demand, the budget is expected to introduce relief measures to boost real estate growth and encourage homeownership.

1. Tax Incentives for Affordable Housing

• The affordable housing segment remains a key focus area, as the government aims to achieve "Housing for All" under its long-term vision.
• Industry leaders are pushing for increased tax deductions for homebuyers, particularly under Section 80EEA, which provides additional deductions on home loan interest for first-time buyers.
• Developers are also seeking tax incentives for constructing affordable housing projects, which would help reduce overall costs and increase supply.
• A revision in the definition of affordable housing (currently limited to homes priced under ₹45 lakh) is expected, allowing more projects to qualify for incentives.
• If accepted, these measures will help bridge the housing gap, promote urban development, and encourage lower-income households to invest in property.

2. Reduction in Stamp Duty

• Stamp duty rates in India vary across states and can go as high as 8-9%, adding a significant financial burden on homebuyers.
• The real estate sector is demanding a uniform stamp duty rate of 3% across all states, which would make property purchases more affordable.
• Reducing stamp duty is expected to encourage more transactions, increase government revenue through higher sales volumes, and stimulate market demand.
• Some states, such as Maharashtra, saw a boom in home sales when stamp duty was temporarily reduced, proving that lower rates can drive real estate transactions.
• A national-level stamp duty rationalization policy could simplify the home-buying process and ensure consistency across the country.

3. Interest Rate Subsidies on Home Loans

• With home loan interest rates ranging between 8-9%, homebuyers are struggling with high EMIs and affordability concerns.
• The real estate sector is pushing for government-backed interest rate subsidies, especially for first-time buyers in the middle-income and affordable housing categories.
• A subsidy under Pradhan Mantri Awas Yojana (PMAY) could be expanded or extended, allowing more buyers to qualify for benefits.
• Lowering home loan interest rates could revive demand and increase home ownership, especially among young professionals and middle-class buyers.
• There is also a demand for tax exemptions on interest payments beyond the existing ₹2 lakh deduction under Section 24(b), which would further reduce the burden on homebuyers.

4. Single-Window Clearance System

• Developers currently face lengthy approval processes, which delay projects and increase costs.
• A single-window clearance system for real estate projects could streamline approvals, reduce bureaucratic delays, and promote faster project execution.
• This system would enhance ease of doing business and attract more foreign and domestic investment into the sector.
• By ensuring a faster turnaround for project approvals, developers would be able to deliver projects on time, reducing the risks of stalled developments.
• The introduction of automated and digitized approval processes would also help reduce corruption and inefficiencies in the system.

5. Granting Infrastructure Status to Real Estate

• Industry bodies such as CREDAI and NAREDCO have long demanded infrastructure status for real estate, which would allow developers to access funds at lower interest rates.
• If granted, infrastructure status would allow easier financing, longer repayment terms, and access to external commercial borrowings (ECBs).
• This move would be a game-changer for the sector, enabling large-scale developments and improving housing affordability.
• Sectors such as affordable housing, logistics parks, and student housing could particularly benefit from this classification.
• Infrastructure status would also improve investor confidence, leading to greater foreign direct investment (FDI) inflows into the real estate sector.

6. GST Rate Rationalization for Under-Construction Properties

• The current GST on under-construction properties is 5% (without input tax credit) and 12% for commercial properties, making them more expensive than ready-to-move-in homes (which attract no GST).
• The real estate sector is pushing for a GST reduction to 3-4% on under-construction properties, which would make them more attractive to buyers.
• Developers are also requesting the return of input tax credit (ITC) to reduce their costs and, in turn, lower home prices for consumers.
• If GST is rationalized, it could revive the demand for newly launched projects and encourage homebuyers to invest in under-construction properties.
• A structured GST policy would improve transparency, reduce litigation, and streamline the taxation structure in the real estate industry.

Other Possible Real Estate Reforms

In addition to the above key expectations, the industry is also hoping for:

• Increased budgetary allocations for urban infrastructure development to improve connectivity and housing projects.
• Special incentives for rental housing and co-living spaces to cater to growing urban migration.
• Boost to REITs (Real Estate Investment Trusts) to enhance liquidity and increase institutional investments in commercial real estate.
• Easier access to financing for small developers, particularly in Tier 2 and Tier 3 cities.

Infrastructure development remains a cornerstone for economic growth, playing a crucial role in enhancing productivity, boosting employment, and attracting investments. The Union Budget 2025 is expected to allocate substantial funds towards infrastructure projects to accelerate urbanization, rural connectivity, and economic expansion. With the government's focus on "Viksit Bharat" (Developed India) by 2047, investments in transportation, energy, and smart infrastructure are anticipated to be a key priority.

1. Increased Capital Expenditure

A record capital expenditure push is expected in transportation, logistics, and industrial infrastructure, particularly in sectors such as roadways, highways, Indian Railways, and ports. The government may increase CAPEX allocation beyond ₹10 lakh crore, focusing on expanding expressways, metro rail networks, and green energy corridors. Investments in dedicated freight corridors and high-speed rail projects could enhance logistical efficiency and reduce transportation costs for businesses. Additionally, a greater emphasis on Public-Private Partnerships (PPP) is likely to mobilize private sector investments, ensuring faster execution of large-scale projects.

2. Urban Infrastructure Development

With rapid urbanization, the demand for smart cities, efficient public transportation, and sanitation infrastructure is increasing. The budget is expected to boost allocations for Smart Cities Mission, metro rail projects, and affordable housing in urban centers. Expanding mass rapid transit systems (MRTS), electric vehicle (EV) infrastructure, and sustainable urban development projects will be key focus areas. Moreover, investments in waste management, clean water supply, and sewage treatment plants are crucial to improving the quality of life in cities. Strengthening Municipal Bonds and Urban Development Funds could also provide additional financing for city-level infrastructure expansion.

3. Rural Connectivity

Bridging the urban-rural divide is essential for inclusive growth, and the budget is expected to prioritize investments in rural roads, electricity, and digital connectivity. Under the Pradhan Mantri Gram Sadak Yojana (PMGSY), funding may be increased to expand rural road networks and improve last-mile connectivity. Enhanced rural electrification projects under schemes like Saubhagya Yojana will ensure 100% electricity coverage, while investments in broadband expansion under BharatNet will accelerate rural digitalization. Strengthening agricultural storage and cold chain logistics could also help farmers access better markets and reduce post-harvest losses. By enhancing rural infrastructure, the government aims to boost rural employment, support MSMEs, and improve overall living standards.

The agriculture sector, being the backbone of the Indian economy, provides livelihood to over 50% of the population. With increasing challenges such as climate change, rising input costs, and market volatility, the sector is expecting strong policy interventions in the Union Budget 2025. The government is likely to prioritize rural development, modernize farming practices, and improve financial support for farmers, ensuring sustainable agricultural growth and higher rural incomes.

1. Increased Funding for Rural Development

Allocations toward rural development programs are expected to strengthen rural infrastructure, create employment opportunities, and improve living standards. The budget is likely to expand funding for schemes like MGNREGA (Mahatma Gandhi National Rural Employment Guarantee Act) to provide financial security to rural households. Investments in rural roads, irrigation projects, and electrification will enhance agricultural productivity and improve market access for farmers. Additionally, expanding digital connectivity and financial inclusion through rural banking and microfinance initiatives could further accelerate economic growth in India's villages.

2. Support for Sustainable Farming

With increasing climate-related risks, the government is expected to introduce incentives for climate-resilient and sustainable farming practices. Expanding subsidies for solar-powered irrigation, organic farming, and precision agriculture could encourage farmers to adopt eco-friendly techniques. Programs promoting water conservation, crop diversification, and efficient fertilizer usage will be crucial in ensuring long-term food security. Additionally, funding for research in drought-resistant and high-yield crop varieties will be critical in mitigating climate risks and enhancing agricultural output.

The healthcare sector is expected to receive major attention in Union Budget 2025, especially after the lessons learned from the COVID-19 pandemic. The government is likely to increase spending on public healthcare, reduce tax burdens on medical expenses, and promote indigenous pharmaceutical production. Strengthening primary healthcare infrastructure and expanding insurance coverage will be key focus areas to improve accessibility and affordability.

1. Reduction in GST on Healthcare Services

One of the major expectations from the budget is a reduction in GST on health insurance premiums, medical equipment, and essential healthcare services. Currently, health insurance attracts 18% GST, making it costly for middle-class families. A tax cut could encourage more people to buy health insurance, leading to better financial protection against medical emergencies. Similarly, reducing GST on critical healthcare products like medical devices, diagnostic tests, and hospital services will make quality healthcare more affordable for the masses.

2. Increased Healthcare Spending

With growing healthcare needs, the government is likely to boost budgetary allocations for hospitals, research institutions, and medical infrastructure. Strengthening Ayushman Bharat (PM-JAY) and expanding coverage to more beneficiaries could provide greater healthcare access to economically weaker sections. Investments in telemedicine, AI-driven diagnostics, and rural healthcare facilities will improve medical outreach in remote areas. Additionally, funding for pharmaceutical research, vaccine development, and indigenous drug manufacturing will be crucial for strengthening India's position as a global healthcare hub.

The Union Budget 2025 holds the promise of ushering in reforms and policies aimed at revitalizing the Indian economy. With focused attention on sectors like real estate, infrastructure, agriculture, and healthcare, the budget is expected to lay down a roadmap for sustainable growth, increased investments, and improved quality of life for citizens. Stakeholders remain hopeful that the budget will address their concerns and pave the way for a prosperous future.