This week in Indian law: Finance Minister Nirmala Sitharaman presented the Union Budget 2025-26, proposing sweeping reforms including 100% FDI in insurance and a new Income Tax Bill to replace the six-decade-old 1961 Act. SEBI tightened restrictions on finfluencer associations, and the NCLAT clarified the scope of CIRP costs under IBC. 5 significant legal developments this week across legislative policy, securities regulation, and insolvency.
Top story
Union Budget 2025-26: FDI in Insurance Raised to 100%, Sweeping Tax Reforms
Category: legislative-policy | Date: 1 February 2025 | Source: PIB
Finance Minister Nirmala Sitharaman presented the Union Budget 2025-26 in Parliament on 1 February 2025, announcing a comprehensive reform package. Key proposals include raising the FDI limit in insurance from 74% to 100%, exempting individual income up to Rs 12 lakh from income tax, and announcing a new Income Tax Bill to replace the Income-tax Act, 1961. The Budget targets a fiscal deficit of 4.4% of GDP.
Why it matters: The insurance FDI liberalisation opens the sector to full foreign ownership for the first time. The income tax exemption benefits millions of middle-income taxpayers. The announcement of a new Income Tax Bill signals the most significant direct tax reform since 1961.
Read more: Veritect analysis
Regulatory updates
SEBI Tightens Restrictions on Finfluencer Ties With Market Entities
Regulator: SEBI | Date: 29 January 2025
SEBI issued a circular restricting regulated entities — including stock brokers, mutual funds, portfolio managers, and investment advisers — from associating with unregistered financial influencers (finfluencers). The circular addresses the growing risk of unregulated investment advice delivered through social media platforms and mandates compliance from all SEBI-registered intermediaries.
Key point: Market intermediaries must audit their existing finfluencer relationships and terminate non-compliant associations under the new framework.
Court judgments
NCLAT: Unused Asset Hire Charges Cannot Be Treated as CIRP Costs
Court: NCLAT | Date: 30 January 2025
The NCLAT ruled that hire charges for equipment or assets that remain unused during the Corporate Insolvency Resolution Process cannot be classified as CIRP costs under the IBC. The ruling provides practical guidance on the classification of expenses during insolvency proceedings.
Key point: Only expenses directly incurred for preserving the corporate debtor as a going concern qualify as CIRP costs — speculative or unused asset charges are excluded.
Also this week
- Republic Day celebrations — 26 January 2025 marked India's 76th Republic Day, with courts closed for the national holiday.
- Budget session commences — Parliament's Budget Session formally opened with the Economic Survey 2024-25 tabled on 31 January.
By the numbers
- 100% — Proposed new FDI cap in insurance, up from 74%
- Rs 12 lakh — Income tax exemption threshold announced in Budget 2025-26
- 4.4% — Fiscal deficit target as percentage of GDP for FY 2025-26
Looking ahead
- February: Parliament to debate Budget; Income-Tax Bill 2025 expected to be introduced
- February 7: RBI MPC decision — rate cut widely expected
- February: SEBI expected to issue algo-trading framework circular
This is the Veritect Weekly Legal Roundup for Week 5 of 2025. For daily updates, visit our legal news page. Subscribe to receive this roundup every Monday morning.
Veritect provides this content for informational purposes and does not constitute legal advice.