Lok Sabha Passes Finance Bill 2025, Announces Major Tax Relief

Why in the News ?

The Lok Sabha has passed the Finance Bill 2025, introducing zero income tax for income up to ₹12 lakh under the new tax regime. The Bill also focuses on tariff rationalization, boosting domestic manufacturing, and supporting startups with extended benefits.

Lok Sabha Passes Finance Bill 2025, Announces Major Tax Relief

Key Provisions of the Finance Bill 2025:

  • Tax Benefits: Under the new tax regime, zero income tax will be applicable for income up to ₹12 lakh.
  • Customs & Tariff Changes: The Bill proposes rationalizing tariff structures, removing seven custom tariff rates, and adding 35 products to the exempted duty list to boost battery manufacturing for electric vehicles.
  • Support for Startups: The incorporation period for startups to avail benefits is extended by five years, covering those registered before April 1, 2030.

Impact on Economy and Domestic Manufacturing

  • The Bill aims to boost domestic production, enhance export competitiveness, and support trade facilitation.
  • Tariff reductions on raw materials will aid manufacturing sectors like mobile phone batteries and industrial goods.
  • These measures align with the goal of Viksit Bharat 2047, aiming for economic growth while ensuring fair taxation.

Debate and Political Reactions

  • Finance Minister Nirmala Sitharaman defended the Bill, emphasizing its role in honoring taxpayers and promoting ease of doing business.
  • Congress MP S. Jothimani criticized the government, citing unemployment concerns and arguing that tax relief would benefit only one crore people.
  • Protests erupted in Lok Sabha over the alleged non-release of MGNREGA funds, leading to an adjournment of the House.