Union Budget 2025 | FAQs: What is sin tax?

Finance Minister Nirmala Sitharaman will present the Union Budget on February. This will be her eighth presentation.

In light of the upcoming Budget, we take a look at some of the terms associated with the exercise.

What is sin tax?

Sin tax is a substantial levy imposed products such as tobacco, alcoholic beverages, gambling, etc., aiming to discourage their consumption among the public. It is perceived as a beneficial strategy from the government's perspective.

India has been imposing hefty taxes on items like cigarettes, liquor, and pan masala substances. These taxes serve a dual purpose - firstly, dissuading people from consuming what is perceived as undesirable and secondly, the companies manufacturing these products bear a significant tax burden.