Budget 2025: Preparations for the general budget have started. Industry bodies and industry experts are giving many suggestions to the Finance Minister on their behalf. This includes many demands including income tax relief, suggestion to reduce tax on fuel. The Confederation of Indian Industry (CII) has suggested reducing excise duty on fuel in its suggestions for the general budget for the financial year 2025-26. The industry body said that this exemption should be given especially at the lower income level to increase consumption, as fuel prices increase inflation significantly. CII said that the budget has also demanded to consider giving relief in income tax for personal income up to Rs 20 lakh per annum. The industry body says that reducing income tax will save money in the hands of the people, which will help in increasing demand in the market. This will also increase the revenue of the government. 

Currently, excise duty on petrol is 21%

The industry body said central excise duty accounts for about 21 per cent of the retail price of petrol and 18 per cent for diesel. Since May, 2022, these duties have not been adjusted in line with the reduction in global crude oil prices by about 40 per cent. Reducing excise duty on fuel will help reduce inflation and increase disposable income. CII suggested introducing consumption vouchers targeting low-income groups to boost demand for certain goods and services over a fixed period. Apart from this, the government has also been suggested to increase the annual payment under the PM-Kisan scheme from Rs 6,000 to Rs 8,000. 

R&D should be encouraged in electronics hardware 

The Electronics and Computer Software Export Promotion Council (ESC) has advocated further reforms in the Design Linked Incentive (DLI) scheme to make it more comprehensive and impact-oriented. The industry body has strongly advocated incentives to promote research and development (R&D) and innovation in the capital intensive electronics hardware sector during its recent interaction with Finance Minister Nirmala Sitharaman. The ESC has also sought additional income tax exemption for Indian companies spending more than three per cent of their turnover to pursue R&D and file patents/designs in India.