Budget 2025: Charting a new growth path with a boost to the tax net

Challenges

  *    Reduction in corporation tax share in tax receipts over the past 10 years, coupled with the rise in income tax, has shifted the tax burden on individuals 

  *    Higher collections have also resulted in calls to use the opportunity to simplify the goods and services tax structure, which lies outside the ambit of Union Budget   Takeaways  -    Despite income tax relief for the middle class, gross tax receipts  as a percentage of GDP are projected to remain stable at 

12 per cent for FY26

  -    Tax buoyancy is projected to exceed 1 per cent for FY26, indicating steady tax growth despite a decline from 1.15 per cent in FY25 to 1.07 per cent in FY26