Finance Bill 2025 Passed in Lok Sabha with 35 Amendments
Major Tax Reforms, Customs Duty Cuts, and Incentives for EV & Mobile Manufacturing
March 25, 2025 | New Delhi – The Lok Sabha has passed the Finance Bill 2025, incorporating 35 key amendments aimed at simplifying taxation, boosting domestic manufacturing, and promoting sustainable growth. The Bill, presented by Finance Minister Nirmala Sitharaman, is a crucial step in implementing the proposals of the Union Budget 2025-26, aligning with the government’s fiscal roadmap for economic expansion and sectoral support.
With the approval of the Finance Bill, significant tax reforms and duty exemptions will come into effect from April 1, 2025, benefitting industries and investors alike. The Bill will now move to the Rajya Sabha for final approval.
Key Highlights of the Finance Bill 2025
✅ Simplification of Customs Duty Structure
- The removal of seven tariff slabs aims to streamline India’s customs tax system, reducing complexities and making imports more predictable.
- Rationalization of customs duties on crucial sectors, enhancing national competitiveness.
✅ Boost for Electric Vehicles & Mobile Manufacturing
- 35 additional capital goods used in EV battery manufacturing will now be exempt from customs duties, accelerating India’s transition to electric mobility.
- 28 key components for mobile phone manufacturing will enjoy customs duty exemptions, supporting India’s Make in India initiative and boosting domestic electronics production.
✅ Safe Harbour Regime for Investment Funds
- New amendments introduced to the Simplified Safe Harbour Regime, providing greater clarity and incentives for foreign asset managers and global investors.
- The move is expected to attract foreign investments and position India as a preferred destination for global funds.
✅ Import Tax Reforms – Transparency & Efficiency
- Imports will now attract either a cess or a surcharge, but not both, preventing cascading taxation and improving ease of doing business.
✅ Abolition of the 6% Equalisation Levy (‘Google Tax’)
- The government has scrapped the 6% digital tax on online advertisements, aligning India’s digital tax policy with international standards.
- This step is expected to improve trade relations with key global partners, including the United States.
✅ New Direct Tax Code on the Horizon
- The Finance Minister hinted at discussions on a New Direct Tax Code during the Monsoon Session of Parliament, indicating potential overhauls in India’s tax structure.
Budget Snapshot for 2025-26
- Total Expenditure: ₹50.65 lakh crore
- Capital Expenditure: ₹11.22 lakh crore
- Effective Capital Expenditure: ₹15.48 lakh crore
What’s Next?
With the Lok Sabha’s approval, the Finance Bill 2025 now moves to the Rajya Sabha for consideration. Once cleared, the Bill will come into effect from April 1, 2025, shaping India’s economic landscape for the coming financial year.
Stay tuned for further updates on how these reforms impact businesses, taxation, and investments.
