The most awaited time of the year is just around the corner: Budget. Every year, people eagerly wait for the Union Budget, hoping for relaxation in policies and new policies that ease their financial burdens. Every year’s budget also paves the way for economic growth. But this time, the expectations are at an entirely new level with the Budget 2025.
With markets falling for the past couple of weeks, the budget could provide stock markets with new momentum to reach new heights. However, if the markets perceive it as a bad budget, the downfall will escalate further. However, that shouldn’t stop you from finding the best stocks to invest in 2025, by attending our stock market free webinar.
Let’s take a closer look at what the people of India are hoping for from Budget 2025, breaking it down in a way that everyone, including kids and adults, can understand.
Why Is Budget 2025 So Important?
For the past few months, investors have faced tough times, with many portfolios seeing a decline of 25-30%. People are feeling the pinch of taxes and rising expenses. The government, led by Finance Minister Nirmala Sitharaman, has been heavily critiqued, with people questioning the value they receive in return for their taxes.
Budget 2025 Expectations are high because people are hoping for changes that can bring relief to taxpayers, encourage investments, and boost the economy. But what are the key areas of focus? Let’s explore.
What Are the Key Budget 2025 Expectations?
1. Lower Taxes for Investors
Many investors are hoping for a reduction in capital gains taxes. Last year, the government increased the Short-Term Capital Gains (STCG) tax from 15% to 20% and the Long-Term Capital Gains (LTCG) tax from 10% to 12.5%. This increase frustrated investors, as it reduces their overall profits.
Organizations like the Association of Mutual Funds in India (AMFI) have suggested reducing these taxes to encourage more people to invest in mutual funds and the stock market. They believe that lower taxes will help investors grow their wealth in the long term.
Expectations:
- Reduction in STCG and LTCG taxes
- Lower Securities Transaction Tax (STT) to attract more traders
- Reintroduction of indexation benefits for debt funds to adjust returns for inflation
2. Affordable Housing for All
Buying a home is a dream for many Indians. However, rising property prices and high loan interest rates have made it difficult for people to afford homes.
Currently, homebuyers get a tax deduction of up to ₹1.5 lakh under Section 80C and ₹2 lakh under Section 24B on home loan interest. But experts believe this is not enough, especially in urban areas where property prices are skyrocketing.
Expectations:
- Increase in tax deduction limits for home loans
- More incentives for first-time homebuyers
- Policies to promote affordable housing projects
3. Relief for the Insurance Sector
Insurance is an important part of financial security, but many people in India still don’t have enough coverage. The industry is expecting special tax benefits for health and life insurance policies to encourage more people to get insured.
Expectations:
- Separate exemption for insurance under the tax regime
- Removal of GST on term insurance and health insurance policies
- Increased awareness programs to boost insurance coverage
4. Boost to Manufacturing and Make in India
The Make in India initiative has been a success, with smartphones becoming the fourth-largest export product after diesel, aviation fuel, and diamonds. However, industry insiders believe that reducing custom duties further can help the manufacturing sector grow and compete globally, especially against China.
Expectations:
- Reduction in custom duties on raw materials and components
- More incentives for domestic manufacturing units
- Greater focus on boosting exports
5. Healthcare and Medical Relief
India’s healthcare sector is improving, but there’s still a lot that can be done to make medical treatment affordable for everyone. Hospitals are expecting a reduction in GST on medical services and essential medicines.
Expectations:
- Lower GST on hospital services and medical insurance
- Reduction in import duties for life-saving drugs and equipment
- Increased government spending on public healthcare infrastructure
6. Push for Green Energy and Electric Vehicles (EVs)
With rising concerns about pollution and climate change, green energy and electric vehicles (EVs) are gaining attention. The government is expected to announce incentives for EV buyers and infrastructure development for charging stations.
Expectations:
- More subsidies for electric vehicles
- Expansion of EV charging stations across India
- Tax benefits for companies investing in green energy projects
7. Income Tax Relief for the Middle Class
The middle class is hoping for some relief from high taxes, especially those earning under ₹15 lakh per year, who fall under the 20% tax bracket.
Currently, only 4.55% of India’s population pays income tax, and the government wants more people to shift to the new tax regime, which offers lower tax rates but fewer deductions.
Expectations:
- Increased standard deduction limits
- More incentives to encourage people to switch to the new tax regime
- Simplification of tax filing processes
8. Employment and Skill Development
India’s biggest challenge remains unemployment. With Budget 2025, people are expecting more initiatives that will create job opportunities and provide skill training to the youth.
Expectations:
- More focus on skill development programs
- Incentives for businesses to hire fresh graduates
- Support for startups and small businesses
A Balanced Approach: What the Government Must Consider
The government has to balance the needs of different groups—taxpayers, businesses, and the underprivileged. While taxpayers want relief, the government also needs funds to run welfare programs and infrastructure projects.
Many expect the government to focus on creating long-term economic growth by promoting employment, investments, and sustainable development.
Conclusion
While the actual announcements will only be revealed on 1st February, the Budget 2025 Expectations remain high. Whether it’s tax relief, housing benefits, or healthcare support, people from all walks of life are looking forward to policies that will improve their financial well-being and contribute to India’s growth story.
As the budget day approaches, stay informed and analyze how these changes might impact your financial plans. Whether you’re an investor, a homebuyer, or just a curious citizen, Budget 2025 has something in store for everyone.
Let’s wait and watch how the government balances the needs of the economy and the expectations of the people in this much-anticipated budget.
