Finance Bill 2025 Passed in Lok Sabha

On 25th March 2025, Lok Sabha passed the Finance Bill 2025, incorporating 35 amendments to enhance tax certainty, ease of doing business, and economic growth.

Key Points

Abolition of Equalisation Levy: The government proposes to abolish the 6% equalisation levy (EL) on online advertisements, effective 1^st April 2025.
Tax Rationalization: Several provisions have been simplified to provide tax relief and enhance compliance for businesses and individuals.
Foreign Asset Taxation: Strengthened mechanisms to improve tax mobilization from individuals with undisclosed foreign assets.
Higher Capital Expenditure: Total capital expenditure set at ₹11.22 lakh crore, with an effective capital expenditure of ₹15.48 lakh crore.
State Transfers: ₹25.01 lakh crore allocated for state transfers, marking a ₹4.91 lakh crore increase over 2023-24.
Fiscal Deficit Target: Projected at 4.4% of GDP for FY26, down from 4.8% in FY25.
Clarification on Undisclosed Income: The term ‘Total Income’ in search and seizure cases has been replaced with ‘Total Undisclosed Income’ to ensure that only hidden earnings face penalties.
Power to Flag Income Discrepancies: Section 143(1) now includes a provision allowing the tax department to reconcile tax returns with previous years' filings, identifying inconsistencies.