LS passes Finance Bill 2025 with 35 govt amendments
New Delhi: The Lok Sabha on Tuesday passed the Finance Bill 2025, incorporating 35 government amendments, including a significant change that abolishes the six per cent digital tax on online advertisements. With this passage, the Budgetary approval process in the Lower House is complete, and the Bill will now move to the Rajya Sabha for consideration.
The Finance Bill 2025 is a key component of the Union Budget 2025-26, which outlines a total expenditure of Rs 50.65 lakh crore, reflecting a 7.4 per cent increase over the current fiscal. The proposed capital expenditure for the next financial year stands at Rs 11.22 lakh crore, with an effective capital expenditure of Rs 15.48 lakh crore.
The Budget projects a gross tax revenue collection of Rs 42.70 lakh crore and a gross borrowing of Rs 14.01 lakh crore. Centrally Sponsored Schemes have been allocated Rs 5,41,850.21 crore for the fiscal year beginning April 1, 2025, compared to Rs 4,15,356.25 crore in the ongoing financial year. Similarly, central sector schemes are set to receive Rs 16.29 lakh crore for FY26, up from Rs 15.13 lakh crore in 2024-25.
“The Budget estimates have risen due to multiple factors, including higher interest payments on loans and increased allocations for the Armed Forces and employment generation schemes,” an official document stated.
The fiscal deficit for FY26 is projected at 4.4 per cent, down from 4.8 per cent in the current fiscal. The estimated GDP for FY2025-26 stands at Rs 3,56,97,923 crore, reflecting a 10.1 per cent rise over the revised estimates for FY2024-25.
One of the notable amendments in the Bill is a modification to the Income Tax Act, affecting block assessments in search cases. Under the revised provisions, tax officers will only determine undisclosed income rather than assessing the total income of an individual. This change, approved by the Lok Sabha on Tuesday, will take effect retrospectively from September 1, 2024.
The amendment introduces a fundamental shift in tax assessments. A Frequently Asked Questions (FAQ) document issued by the Income Tax Department stated, “The changes to Chapter XIV-B aim to focus only on assessing undisclosed income and place trust in taxpayers to disclose their regular income in block returns.”
According to the FAQ, regular income will continue to be determined separately based on transactions recorded in official books before a search or requisition takes place. It further clarified that the amendment does not alter tax rates for regular income but seeks to streamline the assessment of undisclosed earnings.
With the Bill now set for discussion in the Rajya Sabha, its final passage will mark the completion of the Budget process for the upcoming fiscal year.
