Finance Minister Nirmala Sitharaman today presented the Union Budget 2024 in Parliament. This is her seventh consecutive budget. After the BJP-led NDA Government won in the 2024 General elections, this is the first budget she is presenting. Previously with majority of nearly 303 seats, they made 240 seats this year. The major sectors that are highlighted in Union budget for the Financial year 2024-25 are listed below:
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- Manufacturing and Services
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- Productivity and Resilience in agriculture
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- Urban Development
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- Energy Security
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- Employment and Skilling
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- Infrastructure
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- Inclusive human resource development and social justice
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- Innovation research development
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- Next generation reforms
The key announcement that are made in the Union Budget 2024 are:
>>>> Highlights: Standard deduction limit hiked in the new tax regime
To make the new tax regime more attractive, Budget 2024 raised the basic exemption limit to Rs 75,000 from Rs 50,000 in the new tax regime. This allows taxpayers to have a higher disposable income.
>>> Highlights: New income tax slabs under the new income tax regime
The new income tax slabs announced are as follows:
| Income Tax Slabs | Tax Rate |
|---|---|
| Up to Rs 3 lakh | 0% |
| Rs 3 lakh to Rs 7 lakh | 5% |
| Rs 7 lakh to Rs 10 lakh | 10% |
| Rs 10 to Rs 12 lakh | 15% |
| Rs 12 to Rs 15 lakh | 20% |
| Above Rs 15 lakh | 30% |
>>> Highlights : Capital gains tax structure changes
There was a major changes in capital gains tax structure. All you want to know:
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- Assets will now be classified into long-term or short-term based on holding periods of either 12 months or 24 months, with the 36-month period having been removed.
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- The taxation rate for Short-Term Capital Gains on listed equity shares, units of equity-oriented funds, and units of business trusts has been raised from 15% to 20%. Other financial and non-financial assets held for the short term will continue to be taxed according to slab rates.
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- To benefit lower and middle-income classes, the exemption limit for Long-Term Capital Gains on the transfer of equity shares, equity-oriented units, or units of Business Trust has been raised from Rs. 1 lakh to Rs. 1.25 lakh per year. However, the tax rate applicable to these gains has increased from 10% to 12.5%.
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- To benefit lower and middle-income classes, the exemption limit for Long-Term Capital Gains on the transfer of equity shares, equity-oriented units, or units of Business Trust has been raised from Rs. 1 lakh to Rs. 1.25 lakh per year. However, the tax rate applicable to these gains has increased from 10% to 12.5%.
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- Unlisted bonds and debentures will now be taxed similarly to debt mutual funds and market-linked debentures, with capital gains taxed at applicable slab rates. This means they will be treated as short-term regardless of the holding period.
>>> Highlights : NPS Vatsalya scheme announced
NPS Vatsalya offers families a systematic approach to ensure the future financial security of their children. By participating in this scheme, parents can lay a solid foundation for their children’s financial needs as they move into adulthood. This new scheme operates similarly to the NPS, which is widely regarded as a valuable tool for securing financial stability in retirement.
>>> Highlights : Abolish ‘angel tax’ for all classes of investors
Sitharaman proposed abolishing the Angel Tax for all classes of investors. “Angel tax” is a term used to describe a tax levied on the investment received by startups from angel investors.
>>> Highlights : Slew of cuts on the customs duties levied on various items
With these slew cuts on customs duties let’s see what’s going to get cheaper and costlier:
What is cheaper
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- Cancer drugs (Trastuzumab Deruxtecan, Osimertinib and Durvalumab)
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- Medical X-ray machines
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- Mobile phones, chargers
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- Equipment using solar cells, panels
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- Fish and shrimp feed
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- Leather goods
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- Footwear
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- Textiles
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- Gold, silver, platinum making charges
What is costlier
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- Ammonium nitrate
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- PVC flex banners
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- Imported telecom equipment
>>> HIghlights : STT on Futures and Options
The Securities Transaction Tax (STT) on futures has been increased from 0.0125% to 0.02% and STT on options has been increased from 0.0625% to 0.1%.
BUDGET 2024:
The budget prioritizes employment, skilling, MSMEs, and support for the middle class. It includes a Prime Minister’s package comprising 5 schemes and initiatives aimed at creating opportunities for 4.1 crore youth over 5 years, supported by a central outlay of INR 2 lakh crore. Additionally, INR 1.48 lakh crore has been allocated for education, employment, and skilling initiatives.
To read about the full budget articles, click on the given PDF links:
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- Budget At a Glance – PDF
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- Budget Speech – PDF
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- Deficit Statistics – PDF
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- Budget Profile – PDF
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- Recepits – PDF
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- Expenditures – PDF
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- Transfer of Resources to States and Union Territories with Legislature – PDF
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- Outlay on Major Schemes – PDF
