UNION BUDGET 2025-26

INDIAN UNION BUDGET 2025-26: A DETAILED ANALYSIS

The Union Budget 2025-26, presented by Finance Minister Nirmala Sitharaman, introduces several key measures aimed at stimulating economic growth, supporting businesses, and providing relief to taxpayers. This comprehensive overview will cover the major highlights, the impact on various industries, and specific benefits for jewellers.

Revised Income Tax Slabs: Relief for Self-Employed and Business Individuals

One of the most notable announcements in this budget is the revision of income tax slabs under both the old and new tax regimes, particularly benefiting self-employed individuals and business owners. The government has extended the 'nil' rate of income tax up to an income of ₹12 lakh, providing substantial relief to taxpayers.

Additionally, the rebate under Section 87A has been enhanced, ensuring individuals with an income up to ₹12 lakh do not have to pay any income tax.

Illustrative Example:

Old Tax Regime:

• Income up to ₹2.5 lakh: Nil
• ₹2.5 lakh to ₹5 lakh: 5%
• ₹5 lakh to ₹10 lakh: 20%
• Above ₹10 lakh: 30%

New Tax Regime:

• Income up to ₹5 lakh: Nil
• ₹5 lakh to ₹7.5 lakh: 10%
• ₹7.5 lakh to ₹10 lakh: 15%
• ₹10 lakh to ₹12.5 lakh: 20%
• ₹12.5 lakh to ₹15 lakh: 25%
• Above ₹15 lakh: 30%

With the enhanced rebate under Section 87A, individuals earning up to ₹12 lakh will receive a full rebate, reducing their tax liability to zero.

Industries Most Impacted by the Budget

Industries Positively Impacted:

• Jewellery Industry: The reduction in import duty on jewellery from 25% to 20% and platinum findings from 25% to 5% is expected to boost domestic demand and benefit jewellers by making imports cheaper.
• Renewable Energy Sector: Increased allocations for solar and wind power projects will encourage sustainable energy solutions and promote green energy adoption.
• Startups and MSMEs: Tax holidays for startups and enhanced credit availability for small businesses provide a boost to the entrepreneurial ecosystem.

Industries Negatively Impacted:

• Automobile Industry: An increase in customs duty on imported auto components may lead to higher production costs and impact vehicle pricing.
• Tobacco Industry: A significant hike in excise duty on tobacco products is likely to reduce consumption and impact revenues.

Opportunities for Jewellers in the 2025-26 Budget

As a jeweller, this budget presents multiple opportunities:

• Reduced Import Duty on Jewellery: The duty reduction from 25% to 20% makes imported jewellery more affordable, enabling jewellers to offer a wider range of products at competitive prices.
• Platinum Findings Duty Reduction: The government has reduced import duty on platinum findings from 25% to 5%, making it cheaper for jewellers to procure and use platinum in their designs.
• Increased Disposable Income: The revised income tax slabs and enhanced rebates are expected to increase consumers' purchasing power, potentially leading to higher spending on luxury items, including jewellery.

Frequently Asked Questions (FAQs)

1. What are the new income tax slabs for the financial year 2025-26?

The government has revised the income tax slabs, extending the 'nil' tax rate up to ₹12 lakhs and adjusting other slabs accordingly under the new tax regime.

2. How does the reduction in import duty affect the jewellery industry?

The reduction in import duty from 25% to 20% will lower the cost of imported jewellery, making it more affordable and increasing demand for both imported and domestically produced jewellery.

3. How does the platinum findings duty reduction benefit jewellers?

The government has slashed import duty on platinum findings from 25% to 5%, which will significantly lower the cost of platinum-based jewellery production and increase its affordability.

4. Which industries benefit the most from the 2025-26 budget?

Industries such as jewellery, renewable energy, startups, and MSMEs are among the biggest beneficiaries due to favourable policy changes and increased financial incentives.

5. How can jewellers leverage the opportunities in this budget?

• Expand product offerings with reduced import costs.
• Target high-net-worth individuals who now have more disposable income.
• Promote platinum jewellery, leveraging the lower import duty to offer competitive pricing.

Note:

The Union Budget 2025-26 introduces significant changes aimed at boosting economic growth, reducing tax burdens, and encouraging investment across various sectors. The jewellery industry, in particular, benefits from the reduction in import duties on jewellery and platinum findings, opening up opportunities for growth and increased sales.

Jewellers should capitalize on these opportunities by adjusting pricing strategies, expanding product lines, and leveraging increased consumer purchasing power.

Take Action Now!

To make the most of these tax changes and business opportunities, consult Chhabria Associates for expert financial and tax guidance. We can help you optimize your tax strategy and leverage business-friendly policies introduced in this budget.

 

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Our team of experts is ready to assist you in understanding the implications of the Union Budget 2025-26 and optimizing your financial strategies accordingly.