Finance Minister Nirmala Sitharaman presented the Union Budget 2024-25 in parliament on July 23. The Budget emphasized support for the agricultural sector, the introduction of employment schemes, loan initiatives, financial assistance for the MSME sector, infrastructural development, and a fiscal deficit projection of 4.9%, with a commitment to reduce it to 4.5%.
The government announced cuts in customs duties and changes to capital gains taxes for the financial year. The “Taxation Budget” includes a revision of tax slabs under the new tax policy.
Budget 2024 Highlights
Union Budget 2024-25 Highlights:
Income Tax and Taxation:
- Comprehensive review of Income Tax Act 1961 to help the middle class, to be completed in six months.
- New tax slabs under the New Tax Regime:
- No tax up to Rs 3 lakh income
- Rs 3-7 lakh: 5%
- Rs 7-10 lakh: 10%
- Rs 10-12 lakh: 15%
- Rs 12-15 lakh: 20%
- Above Rs 15 lakh: 30%
- Standard deduction under the New Tax Regime raised from Rs 30,000 to Rs 75,000.
- Deduction on family pension for pensioners increased from Rs 15,000 to Rs 25,000.
- Simplified capital gains taxation: Short-term capital gains increased to 20%, LTCG to 12.5% for some assets.
- Securities Transaction Tax (STT) on sale of an option increased to 0.1% from 0.0625%; STT on F&O securities hiked by 0.02% and 0.1%.
- Removal of indexation benefit on immovable assets like real estate.
- Long-term capital gains (LTCG) tax on immovable properties reduced to 12.5% from 20%, but indexation benefits removed.
- TDS on e-commerce cut to 0.1% from 1%.
- Angel tax abolished for all investors.
Customs Duties:
- Customs duty on gold and silver reduced to 6%, and platinum to 6.4%.
- Customs duty cut on ferronickel, blister copper.
- Duty hiked to 15% from 10% on specified telecom equipment.
- Duty reduced to 15% on mobile phones, mobile PCBA, and chargers.
- Duty reduced to 5% on certain brood stocks, shrimps, and fish feed.
- Duty raised to 10% on ammonium nitrate and 25% on non-biodegradable plastics.
- Duties exempted for 25 critical minerals.
- Custom duty hiked on plastic products.
- Duty on Methylene diphenyl diisocyanate (MDI) for spandex yarn manufacture reduced from 7.5% to 5%.
- Duty changes proposed for x-ray tubes & flat panel detectors for use in medical x-ray machines.
Other Announcements:
- Employer NPS deduction increased to 14% from 10%.
- NPS solution for Central Government employees to be developed based on review committee recommendations.
- Corporate tax rate for foreign companies reduced from 40% to 35%.
- Relaxation of rules for reopening and reassessment: assessments can be reopened beyond three years only if undisclosed income is Rs 50 lakh or more, with a maximum period of five years.
- Non-reporting of movable foreign assets by Indian professionals will not incur penalties if the value is up to Rs 20 lakh.
- Capex outlay retained at Rs 11.1 lakh crore.
- Record capital expenditure allocation of Rs 2,62,200 crore for railways, with gross budgetary support of Rs 2,52,200 crore.
- Fiscal deficit projected at 4.9% of GDP, with a target to reduce to 4.5% next year.
- Gross market borrowing target for FY 2025 reduced to Rs 14.01 lakh crore from Rs 14.13 lakh crore.
- Pradhan Mantri Janjatiya Unnat Gram Abhiyan for 63,000 tribal villages.
- Centre to ask states to lower stamp duty and consider further reductions for properties purchased by women.
- 100 branches of India Post Payments Bank to be set up in North East.
- Twelve industrial parks to be set up under the National Industrial Corridor Development Programme.
- Rs 10 lakh crore allocated for providing 1 crore houses to urban poor and middle class.
- Critical mineral mission announced for domestic production, recycling, and overseas acquisition.
- Auction of first offshore mining blocks to be launched.
- Rental housing scheme for industrial workers in PPP mode.
- Integrated Technology Platform to improve Insolvency and Bankruptcy Code (IBC) outcomes.
- Mudra Loan eligibility limit increased to Rs 20 lakh from Rs 10 lakh for successful TARUN category borrowers.
- Turnover threshold for mandatory onboarding on the TReDS platform reduced from Rs 500 crore to Rs 250 crore.
- Credit Guarantee schemes for MSMEs with a guarantee cover of Rs 100 crore.
- SIDBI to open 24 new branches within three years.
- Financial support for 50 multi-product food irradiation units and 100 food quality and safety testing labs.
- E-Commerce Export Hubs to be set up in PPP mode.
Regional Allocations:
Andhra Pradesh:
- Social and infra funds for Andhra Pradesh.
- Rs 15,000 crore financial assistance for Amaravati development.
- Polavaram Irrigation project to receive government financing for early completion.
- Infrastructure funds for backward regions of Rayalaseema, Prakasam, and North coastal Andhra Pradesh.
Bihar:
- Road and expressways development for Bihar.
- Industrial node at Gaya on Amritsar Kolkata Industrial Corridor.
- Rs 26,000 crore road connectivity projects:
- Patna-Purnia Expressway
- Buxar-Bhagalpur Expressway
- Bodhgaya, Rajgir, Vaishali, and Darbhanga Spur
- Additional 2-lane bridge over river Ganga at Buxar
Flood Assistance:
- Govt to provide assistance to flood-affected states like Himachal Pradesh, Uttarakhand, Sikkim, and Assam.
Also read: Budget 2024: What’s Cheaper and What’s Costlier? Here’s the Full List
Employment and Skilling:
- Three employment-linked schemes based on EPFO enrolment.
- Rs 2 lakh crore allocated for job creation over 5 years.
- New employment skilling scheme to provide skills to 20 lakh youth in 5 years.
- One-month wage to all new employees as a direct benefit transfer in three instalments, up to Rs 15,000. Eligibility salary limit: Rs 1 lakh per month.
- Govt to reimburse employers up to Rs 3,000 per month for 2 years towards EPFO contribution for each additional employee, incentivizing employment of 50 lakh persons.
- Working women hostels and creches to be opened to facilitate higher participation of women in the workforce.
- Internship scheme for 1 crore youth in 500 top companies with Rs 5,000 per month as internship allowance and one-time assistance of Rs 6,000.
- Financial support for loans up to Rs 10 lakh for higher education in domestic institutions. E-vouchers for 1 lakh students annually for 3% interest subvention on loans.
Agriculture:
- Comprehensive review of agriculture research for increasing productivity and developing climate-resilient varieties.
- Rs 1.52 lakh crore allocated for agriculture and allied sectors.
- Promotion of shrimp production.
- Release of 109 high-yielding and climate-resilient varieties of 32 crops. Initiation of 1 crore farmers into natural farming in the next 2 years. Establishment of 10,000 bio-input resource centres.
- Aatmanirbharta mission for pulses and oilseeds such as mustard, groundnut, sesame, soybean, and sunflower.
- Development of large-scale clusters for vegetable production near major consumption centres. Promotion of Farmer-Producer Organizations, cooperatives, and start-ups for vegetable supply chains.
- Financial support for setting up Nucleus Breeding Centres for Shrimp Broodstocks. NABARD financing for shrimp farming, processing, and export.
General Focus:
- Focus on middle-class, employment, skilling, employment, and MSMEs.
- Rs 3 lakh crore allocation for women-centric schemes.
- Nine priorities for generating employment: productivity, jobs, social justice, urban development, energy security, infrastructure, and reforms.
- Rs 2 lakh crore package for 5 schemes.
Tourism:
- Vishnupad Temple at Gaya and Mahabodhi Temple at Bodh Gaya in Bihar to be transformed into world-class tourist destinations on the lines of Kashi Vishwanath Temple Corridor.