Finance Minister Nirmala Sitharaman unveiled the Union Budget 2024, which includes major reforms meant to boost the economy, assist different industries, and ease the burden on taxpayers.
Finance Minister Nirmala Sitharaman presented the Union Budget 2024 in Parliament, focusing on various sectors including taxation, infrastructure, agriculture, tourism, space, and job creation. This budget aims to support the poor, women, youth, and farmers, while also providing significant tax relief for the middle class. Here’s a detailed look at the key highlights and announcements of Budget 2024.
Taxation Reforms in Budget 2024
One of the most anticipated aspects of Budget 2024 is the comprehensive review of the Income Tax Act of 1961, aimed at benefiting the middle class. The new tax regime introduces revised income tax slabs, providing relief to taxpayers. Here are the new tax slabs under the revised regime:
- Up to Rs 3 lakh: No tax
- Rs 3 – 7 lakh: 5%
- Rs 7 – 10 lakh: 10%
- Rs 10 – 12 lakh: 15%
- Above Rs 15 lakh: 30%
The standard deduction under the new tax regime has been increased from Rs 30,000 to Rs 75,000, offering a saving of Rs 17,500. Pensioners now get a 25,000 rupee deduction from their family pension instead of the previous 15,000 rupee reduction.
Changes in Capital Gains Tax
Capital gains taxation has seen significant simplifications in Budget 2024. Short-term capital gains tax has been reduced to 20%, and long-term capital gains tax has been lowered to 12.5% for certain assets. Furthermore, unlisted bonds and debentures will now attract tax on capital gains.
Revisions in Securities Transaction Tax (STT)
The Securities Transaction Tax (STT) on the sale of options has been increased to 0.1% from 0.0625%, and on the sale of futures in securities, it has been raised from 0.01% to 0.02%. These changes are expected to impact trading volumes and strategies in the financial markets.
Angel Tax Abolishment
In a move to foster entrepreneurship and innovation, the budget has abolished the angel tax for all investor classes. This is a significant step towards encouraging investments in start-ups and small businesses.
Custom Duty Adjustments
The budget has also made several adjustments to customs duties:
- Gold and silver: Reduced to 6%
- Platinum: Reduced to 6.4%
- Ferronickel, blister copper: Reduced duty
- Specified telecom equipment: Duty increased to 15% from 10%
- Brood stocks, shrimps, and fish feed: Duty reduced to 5%
- Ammonium nitrate: Duty raised to 10%
- Non-biodegradable plastics: Duty increased to 25%
Corporate Tax Reduction
The corporate tax rate for foreign companies has been reduced from 40% to 35%. This reduction aims to attract more foreign investments and boost economic growth.
Personal Income Tax Revisions
Personal income tax revisions include a noteworthy increase in the standard deduction under the new tax regime, which has been raised from Rs 30,000 to Rs 75,000, providing substantial relief to taxpayers.
Fiscal Deficit Targets
The fiscal deficit for the current fiscal year is estimated at 4.9% of GDP, with an aim to reach 4.5% by the end of next year. The government has also lowered its planned gross market borrowing by Rs 12,000 crore for FY 2025, aiming for a gross borrowing of Rs 14.01 lakh crore.
Agricultural Initiatives
Budget 2024 has allocated Rs 1.52 lakh crore for agriculture and allied sectors. Key initiatives include:
- Shrimp Production Promotion: Enhanced funding for shrimp farming, processing, and export through NABARD.
- Climate-Resilient Varieties: release of 109 climate-resilient and high-yielding cultivars and varieties of 32 field and cultivated crops.
- Natural Farming: Initiation of 1 crore farmers into natural farming over the next two years.
- Bio-Input Resource Centres: Establishment of 10,000 bio-input resource centres to support sustainable farming practices.
Infrastructure and Urban Development
A significant portion of the budget is dedicated to infrastructure and urban development:
- Rs 10 lakh crore: Allocated for urban housing to provide 1 crore houses to the urban poor and middle class.
- Industrial Parks: Twelve new industrial parks are to be set up under the National Industrial Corridor Development Programme.
- Rental Housing Scheme: Publicly announced for the working class, with PPP-mode rental housing supported in the form of dorms.
Tourism Sector
- Infrastructure Boost: Rs 15,000 crore allocated for improving facilities at major tourist destinations, including heritage sites and national parks.
- Sustainable Tourism: Introduction of the Sustainable Tourism Development Program to promote eco-friendly practices and community-based tourism.
- Domestic Tourism Promotion: Issuance of Rs 2,000 travel vouchers and subsidized regional tourism packages to boost domestic travel.
- Support for Tour Operators: Grants for training and low-interest loans for tour operators to recover and expand their services.
- Global Marketing: Rs 5,000 crore for international marketing campaigns to enhance India’s global tourism appeal.
Space Industry
- Increased Funding: Rs 40,000 crore allocated to ISRO for satellite development, space exploration, and advanced space technologies.
- Private Sector Support: Tax incentives and subsidies for private investments in space technology and public-private partnerships.
- Spaceport Development: Rs 10,000 crore for new spaceports and launch facilities to enhance launch capabilities.
- Innovation and Technology: Investment in space technology incubators and advanced research programs.
- International Collaboration: Strengthened international partnerships and participation in global space initiatives.
Employment and Skilling
Employment and skilling are major focuses of Budget 2024:
- Rs 2 lakh crore: Funds will be allocated over the following five years.
- New Employment Schemes: Three employment-linked schemes based on EPFO enrolment.
- Skilling Scheme: A new scheme to provide skills to 20 lakh youth over five years.
- Internship Allowance: Internship scheme for 1 crore youth in 500 top companies, with Rs 5,000 per month as an allowance and a one-time assistance of Rs 6,000.
Support for Women
The budget emphasizes higher participation of women in the workforce with initiatives such as:
- Working Women Hostels and Creches: To facilitate working women.
- Financial Support for Higher Education: Loans up to Rs 10 lakh with annual interest subvention of 3% for 1 lakh students.
MSMEs and Industrial Growth
Support for Micro, Small, and Medium Enterprises (MSMEs) includes:
- Mudra Loan Limit Increase: Enhanced from Rs 10 lakh to Rs 20 lakh for those who have availed and repaid loans under the TARUN category.
- Credit Guarantee Schemes: Introduction of schemes with a guarantee cover of Rs 100 crore.
- SIDBI Expansion: 24 new branches of SIDBI to be opened within three years.
Focus on Andhra Pradesh and Bihar
Specific allocations and projects for Andhra Pradesh and Bihar include:
- Andhra Pradesh: Rs 15,000 crore for the development of Amaravati, funding for the Polavaram Irrigation project, and social and infrastructure funds.
- Bihar: Development of industrial nodes, expressways, power projects, and funds for temple development and sports infrastructure.
Other Significant Announcements
Other notable announcements in Budget 2024 include:
- Critical Mineral Mission: For domestic production, recycling, and overseas acquisition of critical minerals.
- E-Commerce Export Hubs: To be set up in PPP mode.
- Financial Support for Food Irradiation Units: Setting up 50 multiproduct food irradiation units and 100 food quality and safety testing labs.
A Quick Review
Union Budget 2024, presented by Finance Minister Nirmala Sitharaman, brings forth significant changes aimed at driving economic growth, supporting various sectors, and providing relief to taxpayers. With its focus on infrastructure development, job creation, agricultural advancements, tourism, space exploration, and support for women and MSMEs, this budget is poised to have a far-reaching impact on India’s socio-economic landscape.
By addressing the needs of different sections of society and introducing reforms across various domains, Budget 2024 aims to create a robust framework for sustainable development and inclusive growth. As the government continues to navigate the challenges posed by global uncertainties, this budget reflects a balanced approach toward achieving long-term economic stability and prosperity.
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