Union Budget 2025–26: How Small Businesses in Delhi Can Save More Tax
BMC Associates
Expert Analysis by B M C & Associates — Trusted CA Firm in Delhi NCR
NEW DELHI — Every year, the Union Budget triggers a wave of anxiety among India’s small business owners and startup founders. This year is no different — but the Union Budget 2025–26 has brought several meaningful reforms that directly benefit MSMEs, startups, and entrepreneurs in Delhi NCR. B M C & Associates, one of Delhi’s most trusted Chartered Accountant firms with 14+ years of experience, breaks down what these changes mean for you — in plain language.
1. Zero Tax for Individuals Earning Up to ₹12 Lakh — Big Relief for Founders & Professionals
The most talked-about change in Budget 2025–26 is the revised personal income tax structure. Individuals with a net taxable income up to ₹12 lakh annually now have zero tax liability under the new tax regime, thanks to an increased Section 87A rebate of ₹60,000. This is a significant relief for early-stage founders, freelancers, salaried co-founders, and professionals operating out of Delhi NCR.
“Many of our clients who are first-time entrepreneurs or early-career professionals were paying significant taxes unnecessarily. This change puts real money back in their hands — money that can be reinvested into their businesses,”
— CA Bipin Kumar Jha, Partner, B M C & Associates
2. Startup Tax Holiday Extended to 2030 — More Time to Build Without Tax Burden
In a major boost for India’s startup ecosystem, the government has extended the income tax holiday for DPIIT-recognized startups. Startups incorporated up to April 1, 2030 (previously April 1, 2025) can now claim a 3-year income tax exemption within their first 10 years of operation. This gives thousands of Delhi NCR startups a longer runway to grow without the burden of corporate tax.
Additionally, a fresh ₹10,000 crore Fund of Funds has been announced to support startups, adding to the existing fund that has already attracted over ₹91,000 crore in investment commitments.
Action Point for Delhi Startups:
• Ensure your startup is DPIIT-recognized to claim the tax holiday
• File Form 80-IAC application before the deadline with proper documentation
• Consult a CA to structure your company correctly from incorporation to maximize benefits
3. MSME Reclassification: More Businesses Now Qualify for Government Benefits
One of the most impactful changes for small businesses in Delhi NCR is the revised MSME classification. The government has increased investment limits by 2.5 times and doubled turnover thresholds:
• Micro Enterprises: Investment limit now ₹2.5 crore | Turnover limit now ₹10 crore
• Small Enterprises: Investment limit now ₹25 crore | Turnover limit now ₹100 crore
• Medium Enterprises: Investment limit now ₹125 crore | Turnover limit now ₹500 crore
This means thousands of businesses across Delhi, Gurugram, and Noida that were previously classified as ‘medium’ or ‘large’ may now qualify as MSMEs and access priority lending, government scheme benefits, and procurement advantages on the GeM portal.
4. Credit Guarantee Cover Doubled — Easier Business Loans for MSMEs
Access to working capital has always been the biggest challenge for small businesses. Budget 2025–26 addresses this directly: the Credit Guarantee cover under CGTMSE has been enhanced from ₹5 crore to ₹10 crore, unlocking an additional ₹1.5 lakh crore in credit over the next five years.
Additionally, customized credit cards with a ₹5 lakh limit will be introduced for micro-enterprises registered on the Udyam portal, with 10 lakh such cards to be issued in the first year. This is particularly beneficial for small retailers, traders, and service providers in Delhi NCR.
5. TDS & TCS Rationalization — Less Paperwork, Better Cash Flow
Budget 2025–26 proposes rationalization of TDS and TCS provisions to reduce compliance burden across businesses. The TDS limit on rental income has been increased to ₹6 lakh annually (from ₹2.4 lakh), reducing unnecessary tax deductions for landlords and property-based businesses. A new, simplified Income Tax legislation is also on the anvil, aimed at reducing litigation and improving tax certainty for businesses.
“The rationalization of TDS rates is something many of our clients have been waiting for. It directly improves month-to-month cash flow for businesses that were losing working capital to unnecessary TDS deductions,”
— CA Manish Mishra, Partner, B M C & Associates
6. GST Simplification — Easier Input Tax Credit & Return Filing
The Budget has introduced amendments to the GST Act aimed at simplifying input tax credit distribution and return filing processes. A new Track and Trace Mechanism has also been announced for specified commodities, which will improve supply chain compliance across manufacturing and retail sectors in Delhi NCR.
Expert Commentary: What Delhi SMEs Should Do Right Now
“Budget 2025–26 is genuinely pro-business for small enterprises. But benefits don’t happen automatically — they require proactive action. Business owners need to re-evaluate their MSME classification, check startup recognition eligibility, review their TDS obligations, and restructure their tax planning. The window to capitalize on these changes is right now,”
— CA Saroj Jha, Partner, B M C & Associates
About B M C & Associates
B M C & Associates is a full-service Chartered Accountant firm headquartered in Gurugram with offices across Delhi NCR (Noida, Dwarka, Uttam Nagar). With 14+ years of experience and a 90%+ client retention rate, BMC specializes in GST, Income Tax, Statutory Audit, ROC Compliance, FEMA/RBI matters, NRI Services, and Virtual CFO services for startups, SMEs, and large enterprises. The firm is led by CA Bipin Kumar Jha, CA Manish Mishra, and CA Saroj Jha.
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