Finance Act, 2025

The Ministry of Finance on March 29, 2025, notified the Finance Act, 2025.

The following has been stated-

The Act of Parliament received the assent of the President on March 29, 2025.

The following has been stated:

• Chapter II specifies the Rates of Income-Tax

• Chapter III specifies the Direct taxes

• Chapter IV Indirect Taxes

• Chapter V Miscellaneous

It is stated that sections 2 to 86, 99 to 115, 120 and 131 shall come into force on April 01, 2025, and sections 116 to 119 and sections 121 to 129 shall come into force on such date as the Central Government may, by notification in the Official Gazette, appoint. 

The Finance Act, 2025, brings significant changes to the tax structure, aiming to boost economic growth and ease compliance. The personal income tax exemption limit has been raised to ₹12 lakh, with revised tax slabs benefiting middle-class taxpayers. Corporate taxation remains largely unchanged, but targeted incentives have been introduced to promote electronics manufacturing and digital services. The Act also includes provisions to simplify GST compliance and streamline tax dispute resolution mechanisms.

To support domestic industries, the government has revised customs duties on key sectors. Import duties on electric vehicle (EV) batteries and mobile components have been eliminated to encourage local manufacturing. Additionally, the Act provides tax relief to startups and MSMEs by extending the concessional corporate tax rate for newly incorporated manufacturing companies. Capital gains taxation has also been rationalized to make investment in real estate and financial markets more attractive.

In an effort to align with global taxation trends, the Finance Act, 2025, removes the 6% equalization levy on digital advertising, easing trade relations with international companies. The government has also introduced measures to enhance transparency in financial transactions, including stricter reporting requirements for high-value transactions. Overall, the Finance Act, 2025, aims to create a balanced tax framework that promotes economic growth while ensuring fair tax collection.

Please refer to the document below for more details. 

[Notification No.7 of 2025]