Budget 2024: Union Budget 2024, Finance minister Nirmala Sitharaman’s 7th budget, announced a series of boosters for a number of sectors. India’s economic growth continues to be the shining exception and will remain so in the years ahead, the Finance minister said presenting the Budget on July 23. There, however, are significant downside risks to growth and upside risks to inflation, she noted.

he budget laid out nine priorities for this year and coming years. They are:

• Productivity and resilience in Agriculture
• Employment and skilling
• Inclusive HRD and social justice
• Mfg & services
• Urban development
• Energy security
• Infra
• Innovation, R&D
• Next generation reforms

here is a need to focus on the garib, mahilaye, yuva and annadata, said the FM. One of the top Budget highlights pertained to a PM Package of 5 schemes to facilitate employment and skilling at an outlay of Rs 2 lakh crore

Tax

FM Sitharaman announced changes in new tax regime. Standard deduction was proposed to be increased to Rs 75,000 from Rs 50,000.

n new tax regime, the tax rate structure will be revised. Below is the new structure:

• 0-3L Zero
• 3-7L 5%
• 7-10L 10%
• 10-12L 15%
• 12-15L 20%
• 15 & above, 30%

Salaried employee in new tax regime will save up to Rs 17,500 in income tax, the Finance minister said.

Monetary limits for filing appeals related to direct taxes, excise and service tax in the Tax Tribunals, High Courts and Supreme Court have been increased to Rs 60 lakh, Rs 2 crore and Rs 5 crore respectively.

To improve social security benefits, the deduction of expenditure by employers towards NPS is proposed to be increased from 10 to 14% of the employee’s salary.

Stock markets

It was announced that long-term capital gains on all financial and non-financial assets will attract a tax rate of 12.5%. Additionally, the limit of exemption for capital gains will be set at Rs 1.25 lakh per year.

The Finance Minister announced an increase in the Securities Transaction Tax (STT) on Futures and Options. The STT on futures will rise from 0.0125% to 0.02%, while the STT on options will increase from 0.0625% to 0.10%.

Also, the 20% TDS on repurchase by MF or UTI was proposed to be withdrawn.

he new moves are basically these:

1. STCG on certain assets will attract 20% and all other on financial and non-financial assets will be taxed at tax rate applicable
2. Hike in the limit capital gains exemption limit to Rs 1.25 lakh per year.
3. LTCG on specified certain assets will be hiked to 12.5%
4. Unlisted bonds, debt mutual funds will continue to be taxed at applicable tax rate.

Economy & Fisc

The fiscal deficit for the year is estimated at 4.9% of GDP, Sitharaman’s Budget revealed.

The government will try and maintain strong fiscal support for infrastructure, it was announced. This year, Rs 11.11 lakh crore has been allocated for capital expenditure, which amounts to 3.4% of India’s GDP.

Due to an increase in tax revenue, the government reduced its projected borrowings for the current fiscal year to 14.01 lakh crore. To achieve its desired budget deficit, the government must issue dated securities in order to borrow money.

ovt’s expenditure under major heads

• Defence: 4,54,773 cr
• Rural Development: 2,65,808 cr
• Agriculture and Allied Activities: 1,51,851 cr
• Home Affairs: 1,50,983 cr
• Education: 1,25,638 cr
• IT and Telecom: 1,16,342 cr
• Health: 89,287 cr
• Energy: 68,769 cr
• Social Welfare: 56,501 cr
• Commerce & Industry: 56,501 cr

Agriculture

Giving a big boost to the agriculture sector, the Finance minister said that the government will undertake a comprehensive review of the agricultural research setup to increase productivity and develop climate-resilient varieties. Domain experts will oversee the conduct of this research to ensure its effectiveness and relevance.

Jobs

Increasing the participation of women in the workforce will be a priority, the Budget announced. This will be facilitated by setting up hostels and creating partnerships to organise women-specific skilling programs.

Job creation in the manufacturing sector will be incentivised through a scheme linked to the employment of first-time employees. This scheme will provide incentives to both employees and employers concerning EPFO contributions for the first four years of employment.

It will benefit 30 lakh youth and cover additional employment in all sectors. The government will reimburse employers up to Rs 3,000 per month for two years towards EPFO contributions for each additional employee.

This initiative aims to incentivise the additional employment of 50 lakh people.

Big Skilling move

The Finance Minister announced employment-linked skilling through schemes as part of the PM’s package. These schemes will be based on enrolment in the EPFO, focusing on recognizing first-time employees.

First-timers will receive one month’s wage upon entering the workforce in all formal sectors. A direct benefit transfer (DBT) of one month’s salary, up to Rs 15,000, will be provided in three instalments.

The eligibility limit for this benefit will be a salary of Rs 1 lakh per month, and it is expected to benefit 2.1 lakh youths.

A PM Package of 5 schemes will be announced to facilitate employment and skilling at an outlay of Rs 2 lakh crore.

Education

The Budget announced financial support for loans up to Rs 10 lakh for higher education.

This year, a provision of Rs 1.48 lakh crore has been made for education, employment, and skilling.

FDI

It was announced that the rules and recognition for Foreign Direct Investments (FDIs) will be simplified to facilitate their inflow. This move is aimed at prioritising and promoting the use of the rupee for overseas investments.

Corporate tax

The Finance Minister announced a cut in the corporate tax rate for foreign companies, reducing it from 40% to 35% in the FY25 Budget.

Startups: Angel tax

In a major move, Finance Minister Nirmala Sitharaman announced the abolishment of Angel tax. This abolition is for all investor classes.

Telecom

There will be an increase by 10-15% on printed circuit board assemblies (PCBA) on specific telecom equipment.

The duty on mobiles and accessories was proposed to be cut to 15%.

The accessories include mobile PCDA (Printed Circuit Design Assembly), and mobile chargers.

Customs duty

India, the second-largest consumer of bullion in the world, cut import levies on gold and silver from 15% to 6%. Industry officials say this could increase retail demand and assist reduce smuggling. Increased Indian demand for gold could drive up world prices, which broke records this year, but it could also increase India’s trade deficit and weaken the rupee.

Providing significant relief to cancer patients, Nirmala Sitharaman waived customs duties on three cancer medications. Osimertinib, Durvalumab, and Trastuzumab Deruxtecan are the three medications.

Customs duties on 25 critical minerals for sectors like nuclear energy, renewable energy, space, defence, telecommunications, and high-tech electronics will be made fully exempt and reduce BCD on two of them. This will provide a major fillip to the processing and refining of such minerals and help secure their availability for these strategic and important sectors.

GST

To further enhance the benefits of GST, the govt will strive to rationalise the tax structure, the Finance minister proposed in her budget.

GST has significantly reduced tax incidents for the common man and eased compliance for industry, marking a success of vast proportions, the FM said.

Realty sector

Under the PM Awas Yojana, Urban 2.0, the housing needs of the urban poor and middle class will be addressed with an investment of Rs 10 lakh crore.

A Rs 2.2 lakh crore push to make housing more affordable was announced.

States charging high stamp duty will be encouraged to moderate their rates for all, it was announced in the Budget.

Additionally, further reductions in duties for properties purchased by women will be considered.

These measures will also be incorporated as essential components of urban development schemes, the FM said.

Indexation bonus on property sale

The indexation bonus that was offered on property sales was announced to be eliminated in the 2024 budget. Many property sellers will consequently be unable to increase their acquisition price and lower their capital gains.

Before the announcement, long-term capital gains from the sale of real estate were subject to a 20% indexation benefit tax. According to the budget documents, capital gains from the sale of property will now be subject to the new LTCG tax rate of 12.5% without indexation advantage, as opposed to the previous rate of 20% with indexation benefit.

According to the budget documents, capital gains from the sale of real estate will now be subject to the new 12.5% LTCG tax rate without the index ..

NPS for minors

The NPS Vatsalya programme will be made made available for parents to invest in on behalf of their children. The account may be passed to the child after they reach adulthood.

Space economy

There will be a continued emphasis on expanding the space economy by five times over the next 10 years.

To facilitate this target, a venture capital fund of Rs 1,000 crore will be established, the FM announced.

Infra

Budget 2024 proposed to provide Rs 2.66 lakh crore for rural development.

Road connectivity projects will get a Rs 26,000-crore boost.

12 industrial parks will be sanctioned, it was announced.

The government has announced the launch of Phase IV of Pradhan Mantri Gram Sadak Yojana to provide all-weather connectivity to 25,000 rural habitations which have become eligible in view of their population increase, the FM said.

Urban infra

Street Markets: Envisioning a scheme to develop 100 weekly ‘haats’ or street food hubs in select cities.

ransit Oriented Development: Transit Oriented Development plans for 14 large cities with a population above 30 lakh

Water Management: Promote water supply, sewage treatment and solid waste management projects and services for 100 large cities through bankable projects

R&D push

A mechanism will be set up to spur private-driven research at a commercial scale, supported by a financial pool of Rs 1 lakh crore. This move had been first announced in February.

Power and nuclear energy

The govt will partner with the private sector for setting up Bharat small reactors, research and development of Bharat small modular reactors & research and development of newer technologies for nuclear energy.

It was also announced that a policy document on energy transition pathways will be released, with a stress on employment and sustainability.

Entrepreneurship

The Finance Minister announced that the limit of MUDRA loans will be enhanced to Rs 20 lakh from the current Rs 10 lakh for those who have availed and successfully repaid loans under the TARUN category.

IBC

An integrated tech platform will be set up to improve outcomes under the Insolvency and Bankruptcy Code (IBC). This platform will aim to achieve greater consistency, transparency, and better oversight for all stakeholders, including the National Company Law Tribunal (NCLT).

Defence

The defence outlay has been set at Rs 4.56 lakh crore, compared to Rs 4.55 lakh crore previously.

Small businesses

On credit guarantee schemes for MSMEs in manufacturing, FM said, “to facilitate term loans for MSMEs for the purchase of machinery and equipment without collateral and guarantee, a new scheme will be introduced. This guarantee fund will provide guarantees of up to Rs 100 crore.”