<h1>ICAI Proposes 2025 Tax Reforms: New Income Head, ESOP Deferrals, and Climate Incentives in Pre-Budget Memo.</h1> The Institute of Chartered Accountants of India (ICAI) has submitted a Pre-Budget Memorandum for 2025 focusing on Direct Taxes and International Taxation. The memorandum includes suggestions for rationalizing the Income-tax Act, 1961, reducing litigation, easing compliance burdens, and improving tax collection. Key recommendations include introducing a new income head for shares and securities, enhancing standard deductions based on inflation, extending tax deferral for ESOPs to all start-ups, and revising provisions for capital gains and business income. It also calls for adjustments in the taxation of companies, firms, and individuals, and suggests measures to promote climate change mitigation and social security benefits for taxpayers.