Union Budget 2024 Key Highlights
23 July, 2024
Synopsis:
The standard deduction for salaried employees hiked to ₹75,000.
No income tax up to ₹3 lakh in the new tax regime.
Certain financial assets will attract STCG of 20%.
Custom duties reduced on gold, platinum, mobiles, chargers.
Mudra Loan limit hiked to ₹20 lakh.
The Finance Minister of India Nirmala Sitharaman presented the Union Budget 2024 for the seventh consecutive year.
In the budget speech, the Finance Minister emphasised the stability of India's inflation rate, noting its steady progress towards the 4% target and while the core inflation rate is currently at 3.1%. The Finance Minister also highlighted that despite the uncertainty in the global economy, India's economy continues to grow unperturbed.
The finance minister announced a gamut of changes in the existing tax structure, proposing amendments in the income tax slabs, capital gains taxes, and customs duty. The finance minister also proposed the development of industrial parks in around 100 cities to boost Foreign Direct Investment (FDI) in India and reduce the Fiscal Deficit.
Here are the key Union Budget 2024 highlights:
Income tax structure revised in new tax regime
Those opting for the new tax regime can save up to ₹17,500 as per the revised tax structure. Below are the revised tax slabs under the new tax regime:
Up to ₹3 lakh: Nil
₹3 lakh to ₹7 lakh: 5%
₹7 lakh to ₹10 lakh: 10%
₹10 lakh to ₹12 lakh: 15%
₹12 lakh to ₹15 lakh: 20%
₹15 lakh and above: 30%
Furthermore, the Finance Minister has proposed to hike the standard deduction for salaried employees from ₹50,000 to ₹75,000 in the Union Budget 2024-25. finance minister Nirmala Sitharaman also stated about a comprehensive review of the Income Tax Act of 1961 to be carried out in the next six months.
Simplification of the capital gains taxation
The Finance Minister aims to simplify the existing tax structure through these revisions. Here are the proposed changes announced by the finance minister:
Certain financial assets will now attract short-term capital gains of 20%
Long-term capital gains tax on certain financial assets will be levied at 12.5%
All other assets will continue to attract capital gains tax at existing rates
Certain financial assets will be exempted from capital gains tax up to ₹1.25 lakh
Unlisted bonds, debentures, and debt mutual funds will attract capital gains tax irrespective of the holding period
Besides, the finance minister has proposed to increase the Securities and Transaction Tax (STT) on the sale of Futures and Options (F&O) to 0.02% from 0.01% and 0.1% from 0.0625% respectively. The Angel Tax is abolished for all investor classes to boost entrepreneur and start-up ecosystem.
Furthermore, the finance minister has proposed to eliminate the indexation benefit on the sale of real estate properties. Such a move will prevent property sellers from quoting inflated prices and avoiding capital gains tax.
Reduction in customs duty
The Finance Minister proposed rate cuts in customs duty on several items, including precious metals, mobile phones, chargers, and electronic appliances. The move is expected to make these items cheaper and more affordable.
Highlights of customs duty budget announcements:
Basic customs duty on mobile phones and chargers reduced to 15%
Customs duty on gold and silver has been reduced to 6% and on platinum to 6.4%
Customs duty exempted on specific capital goods used in the manufacturing of solar panels and cells
Customs duty exempted on oxygen-fused copper
Customs duty exempted on 25 essential minerals used in the renewable energy and nuclear power sectors
Three more medicines for cancer treatment are exempted from customs duty
Reduction in customs duty proposed for raw materials used in the leather and textile industries
Plastic products will now attract hiked customs dut
Development of industrial parks in or near 100 cities
The finance minister, in the Annual Budget of India, reaffirmed the government’s commitment to reduce the fiscal deficit, which is now projected at 4.9% of the GDP (Gross Domestic Product). Finance Minister Nirmala has proposed to reduce the corporate tax on foreign companies from the existing 40% to 35%. To boost the Foreign Direct Investment (FDI) in India, the government aims to develop investment-ready “Plug-and-Play” Industrial Parks in or near 100 Tier II and Tier III cities.
The ministry of finance has also allotted ₹2.66 lakh crore in the budget for developing rural infrastructure in India. Additionally, the government plans to launch Phase IV of PM Gram Sadak Yojana in 25 rural habitations due to population growth.
₹2 Lakh crore for five new schemes
The finance minister has put special emphasis on boosting Micro, Small and Medium-sized Enterprises (MSMEs) in India along with generating employment for the youth. She has allotted ₹2 lakh crore for five new schemes under the Employment Linked Incentive. Government also plans to introduce a Credit Guarantee scheme of ₹100 crore to help MSMEs get collateral-free financing.
Furthermore, the finance minister has proposed to hike the Mudra Loan limit to ₹20 lakh from the existing ₹10 lakh to help MSMEs. The turnover threshold for the TReDS platform can also be reduced from ₹500 crore to ₹250 crore. Additionally, ₹3 lakh crore have been allocated for women-centric schemes.
Houses for urban poor and middle-class
The finance minister, during her Budget 2024 speech, focused on providing houses for urban poor and middle-class citizens of India. She has allocated ₹10 lakh crore to build affordable houses under the ‘Housing for All’ scheme. The finance minister also announced a rental housing scheme for the working class. Under this scheme, the government aims to provide dormitory housing for industrial workers.
Special funding for Andhra Pradesh and Bihar
The finance minister has proposed special funding for the upliftment of Andhra Pradesh and Bihar. The former will receive a ₹15,000 crore special assistance from the central government to develop Amaravati and the Vizag-Chennai industrial corridor. Additional funds will be provided for water, railways, and roadways infrastructure development.
On the other hand, Bihar will receive financial assistance of ₹26,000 crore for developing multiple road connectivity projects, including the Patna-Purnia Expressway, Buxar-Bhagalpur Expressway, and a 2-lane bridge at Buzar, among others. Additional funds are allocated for constructing new airports, temples, power projects, and medical colleges.
Announcements for the tourism and space industries
The finance minister also made several announcements for the Indian tourism and space industries. The major announcements in this regard include:
Development of state-of-the-art temples in Gaya and Bodh Gaya in Bihar
Nalanda University to be developed into a world-class tourist centre
Special financial assistance to enhance Odisha’s temples, monuments, and scenic beauty
Setting up a venture capital fund of ₹1,000 crore for the space industry
Disclaimer: The information provided in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances.