The Union Budget 2024, presented by Finance Minister Nirmala Sitharaman, has brought several significant changes and initiatives to boost the Indian economy. This blog will cover the key takeaways and important points from the Budget 2024, making it easy for everyone to understand.
The Union Budget is a crucial event in India, impacting various sectors and the general public. Budget 2024 focuses on employment, skilling, MSMEs, and the middle class. Let's examine the main points and decisions.
Key Priorities of Budget 2024
Productivity and Resilience in Agriculture
The government has emphasized improving productivity and resilience in agriculture. This includes initiatives to improve irrigation, introduce advanced farming techniques, and provide better support to farmers.
Employment and Skilling
Creating jobs and enhancing skills are top priorities. The budget allocates significant funds for skill development programs and job creation schemes, aiming to reduce unemployment and improve the workforce’s quality.
Inclusive Human Resource Development and Social Justice
The budget focuses on inclusive growth, ensuring that all sections of society benefit from economic progress. This includes measures for social justice, education, and healthcare improvements.
Manufacturing and Services
To boost the manufacturing and services sectors, the budget introduces incentives and reforms. This aims to make India a global manufacturing hub and improve the services sector’s economic contribution.
Urban Development
Urban development is another key focus area. The budget allocates funds for smart city projects, infrastructure development, and improving urban living conditions.
Energy Security
Ensuring energy security is vital for sustainable growth. The budget includes measures to promote renewable energy, improve energy efficiency, and reduce dependence on fossil fuels.
Infrastructure
Infrastructure development is crucial for economic growth. The budget allocates funds for building roads, railways, ports, and airports, aiming to improve connectivity and support economic activities.
Innovation, Research, and Development
Promoting innovation and research is essential for long-term growth. The budget includes incentives for research and development in various sectors, encouraging technological advancements and innovation.
Next Generation Reforms
The budget introduces several next-generation reforms to modernize the economy. These reforms aim to simplify regulations, improve the ease of doing business, and attract foreign investments.
Direct Tax Proposals
Increased Limit of Standard Deduction and Family Pension Deduction
Under the new regime, the standard deduction for salaried individuals has been increased to ₹75,000 from ₹50,000. Similarly, the deduction on family pension for persons having pension income has been increased to ₹25,000 from ₹15,000.
Changes in Tax Structure
The tax structure under the new regime has been revised as follows:
- Income up to ₹3 lakh: Nil
- Income from ₹3 lakh to ₹7 lakh: 5%
- Income from ₹7 lakh to ₹10 lakh: 10%
- Income from ₹10 lakh to ₹12 lakh: 15%
- Income from ₹12 lakh to ₹15 lakh: 20%
- Income above ₹15 lakh: 30%
These changes aim to simplify the tax system and provide relief to taxpayers. Under the new tax regime, salaried workers can save as much as ₹17,500 in income tax.
Corporate Tax Rate Reduction
The corporate tax rate on foreign companies has been reduced to 25%, making India a more attractive destination for foreign investments.
Securities Transaction Tax (STT) Increase
The STT on Futures and Options (F&Os) has been proposed to be increased to 0.02% and 0.01% respectively.
Taxation on Financial Instruments
Slab rates will now apply to market-linked debentures, debt mutual funds, debentures, and unlisted bonds.
Abolition of Angel Tax
The government has announced that the angel tax will be abolished, providing relief to startups and investors.
Merging of Tax Exemption Regimes for Charities
Two tax exemption regimes for charities will be merged into one, simplifying the tax process for charitable organizations.
Long-Term Capital Gains Tax
A 12.5% tax rate will be applied to long-term capital gains on all financial and non-financial assets. Furthermore, the annual exemption limit for capital gains will be fixed at ₹1.25 lakh.
NPS Vatsalya Programme
Parents have the option to invest in the NPS Vatsalya programme on behalf of their children. The account may be passed to the child after they reach adulthood.
Simplification of FDI Rules
To encourage foreign direct investments (FDIs), the Finance Minister announced that regulations and recognition for FDIs will be streamlined. This move aims to prioritize and promote using the Rupee for overseas investments.
Increase in Duty on PCBAs
A proposal to raise the duty on printed circuit board assemblies (PCBA) for particular telecom equipment by 10% to 15% was made public by the finance minister.
Customs Duty Exemptions and Reductions
The government intends to waive customs duty on three additional cancer treatment medications. Customs duty on gold and silver will be reduced to 6%, and on platinum to 6.4%. The Basic Customs Duty (BCD) on mobile phones, mobile PCDA (Printed Circuit Design Assembly), and mobile chargers will be reduced to 15%.
Also Read: Pay Your Income Tax Online: A Simple and Secure Way
Indirect Tax Proposals
GST Reforms
For the common man, GST has greatly decreased tax incidents, and for industry, it has made compliance easier. In order to optimize the advantages of Goods and Services Tax (GST), the government intends to streamline the tax framework and extend its reach to the remaining industries.
Customs Duty Changes
Many changes are included in the budget to ease the burden of compliance, encourage home manufacturing, and streamline the structure of customs duties. Duty reductions on essential minerals, solar energy components, and electronic parts are among them. Additionally, the government has given targeted assistance to several industries, including chemicals, pharmaceuticals, medical devices, cellphones, marine products, leather, textiles, precious metals, steel, and copper.
Sector-Specific Tax Breaks and Incentives
The budget extended the export period for imported goods for repairs from six months to a year in order to support the domestic aviation and ship repair industries. Three more cancer medications and specific parts used in the medical field were also completely free of customs charges.
Sector-Specific Announcements
Agriculture
The budget allocates funds for improving irrigation, introducing advanced farming techniques, and providing better support to farmers. This aims to enhance productivity and resilience in agriculture.
Healthcare
The budget includes measures to improve healthcare infrastructure, increase funding for public health programs, and promote medical research. This aims to ensure better healthcare access and quality for all citizens.
Education
Education is a key focus area, with funds allocated for improving school infrastructure, enhancing teacher training, and promoting digital education. This aims to provide quality education to all children.
MSMEs
A number of actions to assist Micro, Small, and Medium-Sized Enterprises (MSMEs) are included in the budget. This includes easier access to credit, tax incentives, and support for technology adoption.
Startups
To promote startups, the budget includes incentives for innovation, easier access to funding, and simplified regulations. This aims to create a conducive environment for startups to thrive.
Rural Development
Amounts totalling ₹2.66 lakh crore have been set aside for rural infrastructure and development. Additionally, three crore additional houses will be constructed under the PM Awas Yojana in rural and urban areas.
GST Reforms
For the average citizen, GST has greatly decreased tax incidents, and for industry, it has made compliance easier. To further enhance the benefits of GST, the government will strive to rationalize the tax structure.
Also Read: Tax-Savvy Strategies for Indian Small Businesses: Must-Know Tips
Nuclear Energy Development
In order to establish Bharat small reactors, research and develop Bharat small modular reactors, and develop newer nuclear energy technologies, the government will collaborate with the private sector.
Urban Development
States with high stamp duty rates will be urged to lower them. Additional duty reductions for properties acquired by women will be taken into consideration. These measures will be incorporated as essential components of urban development schemes.
Energy Security
A policy document focussing on employment and sustainability pathways for energy transitions will be made public. With the installation of rooftop solar plants, the PM Surya Ghar Muft Bijli Yojana aims to supply one crore households with free electricity for up to 300 units per month.
Tourism Development
The Finance Minister suggested endorsing the construction of corridors at the Mahabodhi and Vishnupad temples, which would be modeled after the Kashi Vishwanath temple. The government will also support Nalanda's development as a tourism hub in Bihar.
Conclusion
Budget 2024 brings several significant changes and initiatives to boost the Indian economy. From tax reforms to sector-specific announcements, the budget focuses on inclusive growth, job creation, and sustainable development. These measures are expected to have a positive impact on various sectors and improve the overall economic landscape.
