Lok Sabha Passes Finance Bill 2025 with Key Changes

The Lok Sabha has passed the Finance Bill 2025, including 35 amendments by the government. Finance Minister Nirmala Sitharaman presented the updated bill on March 25, urging approval of important budget proposals. With this, the budget process in the Lok Sabha is complete, and the bill will now move to the Rajya Sabha for review. Once approved, the budget for 2025-26 will be finalized.

Key Changes in the Finance Bill 2025

🔹 Tax Exemptions for EVs & Mobile Manufacturing – 35 EV battery parts and 28 mobile components will now be exempt from customs duty to encourage domestic production.

🔹 No More 6% Digital Tax on Online Ads – The government has removed the 6% digital tax that was earlier imposed on online advertisements, benefiting digital businesses.

🔹 Simplified Customs Duties – Seven different custom tariff rates have been removed to reduce costs for businesses. Now, only either cess or surcharge will apply to imports, not both.

India’s Financial Plan for 2025-26

• Fiscal Deficit – Estimated at 4.4%, down from 4.8% in 2024-25.
• GDP Projection – Expected to grow 10.1%, reaching ₹3,56,97,923 crore.
• Government Spending – Estimated at ₹50.65 lakh crore, up 7.4% from this year.
• Capital Expenditure – Set at ₹11.22 lakh crore, while effective capital spending will be ₹15.48 lakh crore.
• Tax Revenue Target – ₹42.70 lakh crore.
• Gross Borrowing – ₹14.01 lakh crore.
• Funds for States – ₹25 lakh crore will be given to states.

Impact of Removing the Digital Tax

India introduced the Equalization Levy (digital tax) in 2016, initially charging 6% on online ads. In 2020, a 2% tax on e-commerce transactions was added, mainly affecting global tech giants like Google, Facebook, and Amazon.

Now, the 6% tax on online ads has been removed, which the government believes will help the digital advertising sector and attract businesses. However, some experts worry this could reduce government revenue and increase competition for Indian companies.

With these new financial policies, the government aims to boost economic growth, support businesses, and simplify taxation. The final approval from Rajya Sabha will complete the budget process for 2025-26.