Budget 2025: Expectations for Salaried Employees and MSE Businesses

Budget Expectations

With all eyes on the “Union Budget 2025”, expectations are running high, particularly among salaried employees and “Micro and Small Enterprises (MSEs)”.  Both these segments form the backbone of the economy but have been eagerly waiting for meaningful tax relief, simplified compliance, and better financial support.

This year’s budget is an excellent opportunity for the government to introduce reforms that increase disposable income, spur small business growth, and promote employment generation. Let’s take a closer look at the key expectations:  

1. Tax Relief for MSEs: A Need of the Hour

MSEs are a major component of the Indian economy but still face heavy taxes, compliance burden, and limited possibilities of funds. The government should:

 –  Provide tax relief to MSEs so that they can reinvest and expand their business.

 –  Government funding schemes should be easily accessible and become avenues for entrepreneurship      and growth of industries.

 –  Simplified GST compliance– will reduce the burden of regulations on small businesses.

2. Relief for Salaried Employees: Time for a Breakthrough

For years, salaried individuals have not witnessed a major tax relief in the income tax slabs. With increasing inflation and living cost, taxpayers hope for:  Income tax rebate up to ₹10 lakh which will bring relief to the middle class.

 – Enhancement of the deduction limit under Section 80C to ₹2.5 lakh that would boost savings and investments.  

 – Increased limit under Section 80D to ₹1 lakh that would enhance healthcare affordability.  

 – Increased exemption for NPS contributions up to ₹1 lakh to promote retirement savings.  

3. Rationalizing Tax Rates for Individuals & Corporates

The current tax structure is relatively high, particularly for small businesses and corporations. To enhance investments and economic growth, the government should:

 – Keep the maximum tax rate at 25%  for individuals as well as corporates.

 – Tax exemptions for 5 years or more for newly established businesses, to encourage the new         businesses as well as provide employment opportunities.

4. GST Reforms: A More Business-Friendly Approach

Many small businesses struggle with frequent changes in GST regulations and high tax rates on essential goods. The government should consider:  

 – Reducing GST on essential food items and daily-use products to support affordability.  

 – Providing GST relief for small traders and businesses, making compliance easier and cost-effective.  

5. Promoting Industrialization in Rural Areas

A substantial portion of the capital expenditure (Capex) should go towards development in rural industrial areas. It can help in the following ways:

    – creating more employment opportunities in lowly developed regions

    – reducing urban migration because employment is generated closer to home

    – strengthening rural economies and improving infrastructure.

6. Focus on Employment & Business Growth

Beyond tax relief, the government must prioritize job creation and business expansion across all sectors. Some potential measures include:  

 – Incentives for businesses hiring more employees to encourage workforce expansion.  

 – Special schemes for skill development to prepare youth for emerging job markets.  

 – Support for startups and MSMEs to generate sustainable employment opportunities.  

Conclusion

The “Budget 2025” offers the government an opportunity to address the financial concerns of both salaried individuals and MSEs. By reducing tax burdens, simplifying GST regulations, and promoting business growth, the government can drive economic progress and ensure a more financially stable future for all.

As we await the final announcements, the hope remains that this budget will fuel growth, empower businesses, and provide real tax relief to individuals across India.  

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Also Read: 

Union Budget 2025: Key Highlights