HIGHLIGHT OF UNION BUDGET 2024

 

  Budget 2024 Key Highlights;

Budget 2024 Key Updates: The Union Cabinet has approved the Union Budget for the financial year 2024-2025. This is the first full budget of the Modi 3.0 government. Finance Minister Nirmala Sitharaman is present the budget 2024 at 11 am in Lok Sabha. This will be her seventh straight Budget speech

1.  Personal Income Tax

Presenting the Budget for 2024-25 in the Lok Sabha, Finance Minister Nirmala Sitharaman said the standard deduction for salaried employees will be hiked to ₹75,000, from ₹50,000 under new income tax regime in FY25. The government raised the deduction limit to 14% from 10% for employers’ contribution for the National Pension System (NPS).

For those opting for the new tax regime, the standard deduction for salaried employees to be increased from ₹50,000 to ₹75,000. Similarly, deduction for family pension for pensioners to be enhanced from ₹15,000 to ₹25,000.

2. Revised in New tax regime of Income Tax Slab

• 0-3 Lakh - NIL
• 3-7 Lakh - 5%
• 7-10 Lakh - 10%
• 10-12 Lakh - 15%
• 12-15 Lakh - 20%
• 15 Lakh and above - 30%

Please note that there is no change in old tax regime.

 3. Major Changes to be considered for Income under Capital Gains

•  Short-Term Capital Gains (STCG) tax on Eq. Shares under Section 111A increased to 20% from 15%
•   Long-Term Capital Gains (LTCG) tax on Eq. Shares under Section 112A increased to 12.5% from 10%
•  LTCG Exemption on Equity Shares under Section 112A increased to ₹1.25 Lakhs from ₹1 Lakh.
•  LTCG tax rate on all other assets reduced from 20% to 12.5% (Major change Indexation Benefit removed).

All above changes are effective from July 23, 2024. Very important to consider while calculating Income Tax.

•      Securities Transaction Tax (STT) on Futures increased to 0.02%.
•       STT on Options increased to 0.1% from 0.0125%.
•       STT rate change effective from: October 1, 2024
•       Buyback of Shares to be taxed in the hands of the recipient.

4.   4. Cut in Custom Duties

·       Customs duties on gold, silver cut to 6%, platinum to 6.4%

·       Lithium, Copper, Cobalt exempted from Custom Duty

·   Expand the list of exempted capital goods used in manufacturing of solar cells, panels

·       Reduce BCD subject to conditions on MDI for manufacturing of spandex yarn from 7.5% to 5%

·       Exempt customs duty on manufacturing of connectors

·       Exempt customs duty on Oxygen-fused copper 

5.    Announcements for MSMEs 

Here are the announcements for MSMEs:

·    New mechanism for facilitating continuation of bank credit to MSMEs during their stress period.

·       Limit of Mudra loans increased from ₹10 lakh to ₹20 lakh.

·   Turnover threshold of buyers for mandatory onboarding on TReDS platform to be reduced from ₹500 crore to ₹250 crore

·       Financial support for 50 multi-product food irradiation units in MSME sector

·  E-Commerce Export Hubs to be set up in PPP mode to enable MSMEs and traditional artisans to sell their products in international markets.

6.    Announcements for Agriculture sector

Here are the announcements made so far for the agriculture and allied sectors:

·       Provision of ₹1.52 lakh crore for the agriculture and allied sectors

·       10,000 bio research centres will be established

·     Next two years, 1 crore farmers will be initiated into natural farming supported by branding and certification

·    Vegetable production and supply chain, large clusters to be developed closer to consumption centres

·       Financial support for shrimp breeding centres to be provided, export to be facilitated through NABARD

·       Kisan Credit Cards to be launched in 5 states

·       To release 109 varieties of 32 crops

·       Will help Natural Farmers with verification and branding

·       To ensure self-sufficiency in pulses and oil seeds 6 crore farmers and their land will be brought into the farmer and land registry, 

7.    Reduce Fiscal Deficit projected at 4.9% of GDP

FM Sitharaman projects FY25 fiscal deficit at 4.9% of GDP as against 5.1% in Interim Budget. She says government is committed to reduce deficit below 4.5%.

·       Expenditure for FY25 seen at 48.21 lakh crore

·       Receipts for FY25 32.07 lakh crore

·       FY25 Fiscal Deficit projected at 4.9% of GDP versus 5.1% in Interim Budget

·       Aim to reach a fiscal deficit of below 4.5% next year

8.    Package in a boost to skilling

FM Sitharaman announced a package in a boost to skilling. Here are the highlights 

Skilling Programme and Upgradation of Industrial Training Institutes

·       1,000 ITIs to be upgraded in hub & spoke arrangements in 5 years

·       Focus on outcome and quality in collaboration with states and industry

Internship in Top Companies

·       1 crore youth to be skilled by India's top companies in five years

·       12-month Prime Minister's Internship with monthly allowance of ₹5,000

9.    Revision of Model Skill Loan Scheme 

FM Sitharaman proposes revision of Model Skill Loan Scheme to help 25,000 students every year. Here are the announcements: 

·       Setting up of working women's hostels and creches in collaboration with industry

·    Model Skill Loan Scheme to be revised to facilitate loons up to & ₹7.5 lakh with a guarantee from a government-promoted fund: expected to help 25,000 students every year

·       E-vouchers for loans upto ₹10 lakh for higher education in domestic institutions to be given directly to 1 lakh students every year for annual interest subvention of 3% of loan amount.

 10. Women's Empowerment:

•  FM Sitharaman announces  The 'Lakhpati Didi' scheme, aimed at empowering rural women, has been expanded to target 3 crore beneficiaries from the previous 2 crore. This initiative focuses on enhancing the socio-economic status of women through self-help groups and financial support.
• Good News for Homebuyers and Real Estate Sector : Moderation of Stamp Duty throughout the nation along with lowering of Stamp Duty specially for Women.