Understanding Budget 2025: A guide to the complex terms

The Union Budget 2025 is presented on February 1st, detailing the government’s financial plans for the year ahead. It includes expected revenue, planned spending and economic policies. This budget can be complex, with many financial terms. But don’t worry! we are here to simplify it for you with an easy-to-understand glossary of key events.

Budget Basics

• Budget: An annual financial statement detailing the government’s projected revenues and expenditures for the fiscal year (April 1st – March 31st).
• Economic Survey: A document analyzing the state of the economy, paving the way for the budget.
• Vote on Account: Temporary funding granted by Parliament before the budget is finalized.

Key Economic Indicators

• Gross Domestic Product (GDP): The total value of all goods and services produced in the economy.
• Capital Expenditure (Capex): Government spending on infrastructure and assets to boost economic growth.

Budget Documents

• Budget Estimate: Estimated funds allocated to different ministries.
• Finance Bill: Proposes changes to the tax system and introduces new taxes.

Financial Concepts

• Fiscal Deficit: The gap between the government’s income and expenditure, typically covered by borrowing.
• Direct Taxes: Paid directly by individuals and corporations (e.g., income tax).
• Indirect Taxes: Paid by consumers on goods and services (e.g., GST).

Potential Budget Focus

• Home Loans and Affordable Housing: Deductions for home loans to promote affordable housing.
• TDS on Cryptocurrency: Potential reduction in Tax Deducted at Source (TDS) rate for cryptocurrency transactions.

Corporate Finance

• Corporate Tax: Taxes levied on company profits.
• Minimum Alternative Tax (MAT): A minimum tax payable by companies even if they incur losses.
• Disinvestment: Sale of shares in public sector undertakings by the government.