Business
Minister blames ‘shifting sands’ amid criticism of pre-Budget ‘fiscal fandango’
A Cabinet minister has defended the pre-Budget process, saying it has taken place on “shifting sands” amid fears about the economic impact of the weeks of speculation about what it will contain.
Transport Secretary Heidi Alexander also declined to deny that the Chancellor is planning a pay-per-mile scheme for electric vehicle (EV) drivers, even as she boosts a grant that cuts the upfront costs for buyers.
Speaker of the House Lindsay Hoyle has criticised what he called the “hokey cokey” Budget and called out ministers for leaking key announcements ahead of the Chancellor’s statement on Wednesday.
Rachel Reeves abandoned expected plans to hike income tax rates after a press conference and behind-the-scenes briefings aimed at preparing the country for the manifesto-busting move.
The apparent U-turn was said to have come about because of improved economic forecasts.
Transport Secretary Heidi Alexander, when asked on the BBC’s Sunday With Laura Kuenssberg programme whether speculation about tax rises has damaged the economy, said: “The review that the Office for Budget Responsibility have done about the productivity forecasts has meant that this whole process has really taken place on shifting sands to start off with, and we’ve got a very challenging global economic environment.”
Former Bank of England chief economist Andy Haldane said the “fiscal fandango” of the past months had caused “paralysis” among businesses and consumers.
“Next week, we need a decisive action that puts to bed and beyond reproach any notion of further tax rises,” he told the programme.
Ms Alexander declined to reveal Budget details, but did not deny that drivers of electric vehicles could face a pay-per-mile charge as the Chancellor adds £1.3 billion to a grant cutting upfront costs for buying EVs.
She said: “We need a fair vehicle taxation system for all motorists, because EVs, like drivers of petrol and diesel cars, they’re driving on roads that require maintenance.”
The Chancellor has pledged to get a grip on the cost of living in her Budget next week.
Making people better off is a “fundamental precursor to economic growth”, she wrote in The Sunday Times.
“There is an urgent need to ease the pressure on households now. It will require direct action by this Government to get inflation under control,” she wrote.
But at the same time Ms Reeves is widely expected to raise taxes in an effort to bridge a multibillion-pound gap in her spending plans.
Ms Reeves is grappling with weak economic growth, persistent inflation and an expected downgrade to official productivity forecasts as she prepares her statement.
The Treasury said she would raise £1.2 billion by March 2031 by extending a crackdown on fraudulent and mistaken universal credit payments via the targeted case review (TCR) scheme.
In an example of one move aiming to ease the pressure on people’s finances, rail fares are to be frozen for the first time in 30 years, saving commuters on more expensive routes more than £300 a year.
But an extension of the freeze on income tax thresholds is also among rumoured measures and would see more people dragged into paying tax for the first time or shifted into a higher rate as their wages go up.
Tory leader Kemi Badenoch said the Chancellor should “have the balls” to admit that such a move would breach Labour’s manifesto promise not to raise taxes on working people.
Ms Reeves is also expected to scrap the two-child benefit cap, in a move that could cost more than £3 billion.
The Conservatives, who put the cap in place, are against the move.
Shadow chancellor Mel Stride told Sky News’s Sunday Morning With Trevor Phillips programme: “I want to see the Chancellor stand up and explain how she is going to control public spending, particularly welfare, in order to make sure that we’re not having to put up taxes and she’s not going to be breaking all these promises that she’s made.”
Reform UK’s Zia Yusuf said the Chancellor was “prioritising foreign nationals” by raising taxes on UK nationals.
“We have laid out £25 billion of savings that could be made by this Chancellor, and by choosing not to do that, Trevor, and choosing to raise taxes on people in this country, she is prioritising foreign nationals over UK citizens,” he told the programme.
Green Party leader Zack Polanski has said scrapping the two-child benefit cap in the Budget would be a “victory” but urged the Chancellor to go further and “tax the rich”.
“When are we going to see tough choices for multi-millionaires and billionaires? It’s time to tax the rich,” he told Kuenssberg.
Funding of £48 million for 350 new planners to boost Government efforts to build 1.5 million new homes is also reported.
A Treasury source said the Chancellor is expected to announce all care leavers would be guaranteed full student loan support, worth up to £13,500 each.
Other measures expected include £5 million for secondary schools to buy more books for their libraries, an £18 million scheme to revamp playgrounds in England, and a crackdown on shops selling illegal vapes.
Last Updated:
In 2025, a sweeping set of reforms by the Pension Fund Regulatory and Development Authority (PFRDA) has been announced to make NPS more attractive, flexible, and investor-friendly.
Non-government subscribers with an NPS corpus of more than Rs 12 lakh can now withdraw up to 80% of their savings as a lump sum, with only 20% mandatorily allocated to an annuity.
The National Pension System (NPS) has been largely used for tax savings. In 2025, a sweeping set of reforms by the Pension Fund Regulatory and Development Authority (PFRDA) has been announced to make NPS more attractive, flexible, and investor-friendly.
Here’s a simple breakdown of what has changed.
Higher lump-sum withdrawals at retirement
One of the most significant changes is the higher cash withdrawal limit. Non-government subscribers with an NPS corpus of more than Rs 12 lakh can now withdraw up to 80% of their savings as a lump sum, with only 20% mandatorily allocated to an annuity. Earlier, 40% had to be annuitised, a provision that often reduced post-retirement returns.
New withdrawal slabs for smaller NPS corpus
PFRDA has introduced a new withdrawal framework based on corpus size, offering greater flexibility to investors with lower balances.
Subscribers with a corpus below Rs 8 lakh can withdraw 100% of the amount as a lump sum. Those with a corpus between Rs 8 lakh and Rs 12 lakh can choose between phased withdrawals using Systematic Unit Redemption (SUR), partial lump-sum withdrawal combined with annuity purchase, or higher lump-sum withdrawal depending on subscriber category.
Systematic Unit Redemption (SUR) introduced
A key structural reform is the introduction of Systematic Unit Redemption, which allows subscribers to withdraw their NPS corpus gradually over a minimum period of six years. This enables a steady post-retirement income stream without locking funds into an annuity.
Investment age limit extended to 85 years
Subscribers can now remain invested in NPS until 85 years of age, up from the earlier limit of 75. This benefits investors who want to delay withdrawals or continue compounding their retirement corpus beyond the traditional retirement age of 60.
More flexibility in partial withdrawals
Before turning 60, NPS subscribers can now make up to four partial withdrawals, compared with three earlier, with a minimum gap of four years. Withdrawals of up to 25% of own contributions are allowed for specified purposes such as education, marriage, home purchase and medical emergencies.
After 60, subscribers who continue investing can make partial withdrawals with a minimum gap of three years between transactions.
Multiple schemes under one NPS account
Non-government subscribers can now hold multiple schemes under a single PRAN, allowing them to diversify across fund managers and investment strategies without opening separate accounts.
100% equity option for long-term investors
From October 2025, private, corporate and self-employed subscribers can invest up to 100% in equities under the Multiple Scheme Framework, up from the earlier cap of 75%. This option is designed for younger investors with long time horizons who can tolerate higher volatility.
Switching between MSF schemes, however, is restricted for the first 15 years or until age 60.
NPS can now invest in gold, REITs and IPOs
NPS equity schemes are now permitted to invest in gold and silver ETFs, REITs, equity AIFs and IPOs. The combined exposure to these assets is capped at 5% of the equity allocation, offering diversification without excessive risk.
Scheme A discontinued: What subscribers must do
Subscribers invested in Scheme A, which focused on alternative assets such as infrastructure, must switch to Scheme C or Scheme E by December 25, 2025. The scheme is being phased out due to low participation and liquidity challenges.
Other investor-friendly changes
Several additional reforms have further improved NPS attractiveness. These include removal of the five-year lock-in for non-government subscribers, permission to pledge NPS corpus to obtain loans (up to 25% of own contributions), and enhanced tax benefits for NPS Vatsalya contributions under Section 80CCD(1B).
Clearer exit and family protection rules
Exit rules have also been streamlined. Subscribers who renounce Indian citizenship can withdraw their entire corpus. In the event of death, nominees or legal heirs receive 100% of the corpus if no annuity has been purchased. Interim relief provisions have also been introduced for cases where a subscriber is legally declared missing.
Click here to add News18 as your preferred news source on Google.
December 19, 2025, 16:15 IST
Read More
Business
India’s Net Direct Tax Collection Rises 8% To Rs 17.04 Lakh Crore On Higher Corporate Tax Mop-Up
Last Updated:
Net corporate tax collection during the period (April 1, 2025, to December 17, 2025) stands at about Rs 8.17 lakh crore, up from Rs 7.39 lakh crore in the same period of FY25.
India’s gross direct tax collection, before adjusting refunds, stood at over Rs 20.01 lakh crore so far this fiscal year, a 4.16 per cent growth over the year-ago period.
India’s net direct tax collection has increased 8 per cent to over Rs 17.04 lakh crore in the ongoing financial year so far, on higher corporate tax mop-up. Net corporate tax collection during the period (April 1, 2025, to December 17, 2025) stood at about Rs 8.17 lakh crore, up from Rs 7.39 lakh crore in the same period of FY25.
Refund issuances fell 13.52 per cent to over Rs 2.97 lakh crore between April 1 and December 17.
The country’s non-corporate tax, including individuals and HUFs, mop-up so far this fiscal year stood around Rs 8.46 lakh crore, up from about Rs 7.96 lakh crore in the same period last year.
Securities Transaction Tax (STT) collection stood at Rs 40,194.77 crore so far this fiscal year, marginally higher than Rs 40,114.02 crore in the year-ago period.
India’s gross direct tax collection, before adjusting refunds, stood at over Rs 20.01 lakh crore so far this fiscal year, a 4.16 per cent growth over the year-ago period.
In the current fiscal year, the government has projected its direct tax collection at Rs 25.20 lakh crore, up 12.7 per cent year-on-year. The government aims to collect Rs 78,000 crore from STT in FY26.
Rohinton Sidhwa, partner at Deloitte India, said, “Tax refunds issuance has dropped much below last year, while overall tax collection has grown marginally at 4%. The drop in refunds is being attributed to a higher amount of screening of any fraudulent refund claims. Holding back refunds also accelerates litigation that the tax department can ill afford. Overall, the corporate advance tax increase signals good corporate earnings. Non- corporate advance tax collections have, however, declined possibly on the back of rate cuts for individuals given in the previous Budget.”
Click here to add News18 as your preferred news source on Google.
December 19, 2025, 12:49 IST
Read More
Borrowing fell last month to its lowest November level for four years but was still higher than expected as figures for the year so far were pushed higher due to the Government’s U-turn on winter fuel payments.
Official figures showed borrowing stood at £11.7 billion last month, £1.9 billion less than in November last year and the lowest for that month since 2021 thanks to a sharp fall in debt interest payments.
But the figure was more than the £10.3 billion expected by most economists and the £8.6 billion forecast in March by the UK’s independent fiscal watchdog, the Office for Budget Responsibility (OBR).
The OBR’s monthly forecasts from the budget on November 26 are not available until mid-January, according to the ONS.
Borrowing for the eight months of the financial year so far was £132.3 billion, £10 billion higher than the same period a year ago and £16.8 billion higher than the OBR forecast in March.
This was partly due to an extra £1.8 billion of spending on winter fuel payments after the Government U-turned on its previous decision to severely restrict payments through means testing, instead opting to give the payout to all pensioners except those earning above £35,000 a year.
This helped drive an upward revision to borrowing for the seven months to October by £3.9 billion.
ONS senior statistician Tom Davies said: “Despite an increase in spending, this month’s borrowing was the lowest November for four years.
“The main reason for the drop from last year was increased receipts from taxes and National Insurance contributions.”
November’s figure was pushed lower thanks to falling debt interest payments on borrowing, down by £200 million year-on-year to £3.4 billion and the lowest November level for six years.
Public sector net debt, including the Bank of England, reached £2.93 trillion at the end of November, which is around 95.6% of gross domestic product (GDP) and 0.3 percentage points more than a year ago, although remains at levels last seen in the early 1960s.
Elliott Jordan-Doak, senior UK economist at Pantheon Macroeconomics, said there was “very little Christmas cheer for the Chancellor” in the latest borrowing figures.
He added: “Ms Reeves has staked much fiscal credibility on chunky tax increases in the back end of the forecast period. But we think today’s figures further illustrate the shaky foundations of that gamble.
“Revenues continue to underperform, and the smorgasbord approach of tax increases relies on distortionary tax increases with uncertain yields.
“We also have serious doubts about the Government’s ability to follow through on the raft of spending cuts announced in the Budget.”
Chief Secretary to the Treasury James Murray said the debt interest payments underscored the need to bring borrowing down.
He said: “£1 in every £10 we spend goes on debt interest – money that could otherwise be invested in public services.
“That is why last month the Chancellor set out a Budget that delivers on our pledge to cut debt and borrowing.”
Martin Beck at WPI Strategy said “confidence remains the missing ingredient”.
“A clear and credible pro-growth strategy from the Government – and an end to the pervasive gloom surrounding the UK economy – may matter just as much for the public finances as the fine print of future tax and spending plans,” he said.
US brand Vera Bradley posts net revenue of $62.3 million in Q3
Injured Éder Militão defiant about Brazil World Cup selection
NPS Gets A Major Overhaul In 2025: What The New Rules Mean For Your Retirement Money?
-
Business6 days agoHitting The ‘High Notes’ In Ties: Nepal Set To Lift Ban On Indian Bills Above ₹100
-
Politics1 week agoTrump launches gold card programme for expedited visas with a $1m price tag
-
Business1 week agoRivian turns to AI, autonomy to woo investors as EV sales stall
-
Fashion1 week agoTommy Hilfiger appoints Sergio Pérez as global menswear ambassador
-
Sports1 week agoPolice detain Michigan head football coach Sherrone Moore after firing, salacious details emerge: report
-
Business1 week agoCoca-Cola taps COO Henrique Braun to replace James Quincey as CEO in 2026
-
Tech1 week agoGoogle DeepMind partners with UK government to deliver AI | Computer Weekly
-
Sports1 week agoU.S. House passes bill to combat stadium drones