For the 2024-25 fiscal year, Finance Minister Nirmala Sitharaman highlighted a decade of economic change in India. She expressed confidence in the government's work and anticipated continued support from the people. The goal remains clear: To transform India into a developed nation by 2047. Fiscal deficit projections for FY 24-25 stand at 5.8% and 5.1% of GDP, respectively.
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Let us have a look at what the new Union Budget is holding for the people of India in the financial year of 2024-2025.
At the beginning of every financial year, the Government of India comes up with a blueprint of how the expenditures and revenues of the country will be taken care of that year. The Finance Minister presents the budget in February so that it can be finalized before the start of the new fiscal year, that is, April. Under Article 112 of the Constitution of India, the Union Budget is a detailed statement of the country's estimated upcoming expenses and revenue sources.
In general, the Union Budget is classified into 2 parts:
The Capital budget comprises 2 major sub-heads: Capital receipts and Capital expenditures. On one hand, capital receipts include
Capital receipts: Loans from RBI (Reserve Bank of India), foreign government, or citizens
Capital expenditures: incurred for the maintenance and development of health facilities, buildings, machinery, etc.
The Revenue budget comprises 2 major sub-heads: Revenue receipts and Revenue expenditures. On one hand, revenue receipts include:
Tax revenues: Excise duty tax, income tax, corporate tax, etc.
Non-tax revenues: Government fees, fines, profits, etc.
On the other hand, revenue expenditures include the day-to-day expenditures incurred by the government for their regular functioning.
Presented by honorable Finance Minister Nirmala Sitharaman on February 1st, 2024, the following are the key highlights put forth in the 2024 Union Budget. There was NO change in the direct and indirect tax structures in the 2024 budget.
Next-gen Common IT Return Form for taxpayer convenience, stronger grievance mechanism.
The personal Income Tax rebate limit increased to Rs. 7 lakh, no tax for income up to Rs. 7 lakh.
Standard deduction of Rs. 50,000 for salaried individuals, a deduction for family pensions up to Rs. 15,000.
The highest surcharge rate was reduced from 37% to 25%, max personal income tax rate at 39%
Tax exemption limit on leave encashment increased to Rs. 25 lakh for non-govt salaried employees.
Presumptive taxation limits increased for micro-enterprises and certain professionals.
Expenditure deduction for MSMEs is allowed only when payment is made.
Lower tax rate of 15% for new co-ops manufacturing till 31.3.2024.
Relief of Rs. 10,000 crores for sugar co-ops to claim payments made to sugarcane farmers prior to 2016-17.
The higher limit of Rs. 2 lakh for cash deposits and loans in cash by PACS and PCARDBs.
The higher limit of Rs. 3 crores for TDS on cash withdrawal for co-op societies.
Extension of date of incorporation for income tax benefits for startups to 31.3.24.
Carry forward of losses on change of shareholding of startups increased from 7 to 10 years.
Capping of capital gains deduction on investment in a residential house at Rs. 10 crores.
Exemption of income tax for authorities and boards set up for housing and development.
Removal of a minimum threshold of Rs. 10,000 for TDS and clarification of taxability on online gaming.
Conversion of gold into electronic gold receipts is not treated as a capital gain.
Reduction of TDS rate from 30% to 20% on the taxable portion of EPF withdrawal in non-PAN cases.
Tax on income from Market Linked Debentures.
Deployment of 100 Joint Commissioners for small appeals reduction.
Increased selectivity in appeal cases scrutiny.
Extension of tax benefits for funds relocating to IFSC till 2025.
Decriminalization of liquidators under section 276A from 2024.
Allowance of losses carries forward on strategic disinvestment, including IDBI Bank.
Exemption from taxes for payment from Agniveer Corpus Fund.
Deduction in total income allowed for contribution to Seva Nidhi account.
New 2020 personal income tax regime with 6 slabs reduced to 5 and the exemption limit raised to Rs. 3 lakh for major relief to taxpayers.
|Old Tax Redemption
|New Tax Redemption
|NIL (Income limit for a rebate of income tax increased from Rs. 5 lakhs to Rs. 7 lakhs)
|NIL (Income limit for a rebate of income tax increased from Rs. 5 lakhs to Rs. 7 lakhs)
|ABOVE 15 LAKH
Number of basic customs duty rates was reduced from 21 to 13 (excluding textiles and agriculture)
Minor changes in basic customs duties, cesses, and surcharges on items such as toys, bicycles, automobiles, and naphtha
Excise duty exemptions on GST-paid compressed biogas
Customs duty extended on specified capital goods/machinery for the manufacture of lithium-ion cells for EVs until 31.03.2024
Customs duty exemptions on vehicles and parts imported by notified testing agencies for testing and certification purposes
Customs duty reduced to zero on the camera lens and inputs for use in the manufacture of camera modules in mobile phones
Basic customs duty reduced on parts of open cells of TV panels, electric kitchen chimneys, heat coil for electric kitchen chimneys, acid grade fluorspar, crude glycerin for use in epichlorohydrin, seeds for lab-grown diamonds, key inputs for domestic shrimp feed
Denatured ethyl alcohol for the chemical industry exempt from basic customs duty
Increased duties on articles made from dore and bars of gold and platinum
Import duty on silver dore, bars, and articles increased
Basic Customs Duty exemptions continued on raw materials for CRGO Steel, ferrous scrap, and nickel cathode
Concessional BCD of 2.5% on copper scrap continued
Basic customs duty rate on compounded rubber increased to 25%
National Calamity Contingent Duty (NCCD) on specified cigarettes was revised upwards by 16%.
Budgeted fiscal deficit for the current fiscal ending March 2024 stands at 5.9%, down from 6.4% last fiscal.
Current fiscal's disinvestment target likely to be missed for the sixth consecutive year.
Anticipated government target for next fiscal: below Rs 50,000 crore to be more realistic.
Planned capital expenditure for the current fiscal: Rs 10 lakh crore, up from Rs 7.3 lakh crore last fiscal.
Focus on building better infrastructure and encouraging states to spend more on essential projects.
Direct and indirect tax collection targets for the current fiscal: Rs 18.23 lakh crore and Rs 15.29 lakh crore respectively, totaling Rs 33.61 lakh crore.
The government expects to collect more money from GST, income tax, and corporate tax than it planned in the budget.
Gross borrowing budget for the current fiscal: Rs 15.43 lakh crore.
The market is keeping a close watch on how much money the government borrows. This is because the government plans to spend more on building things like roads and bridges.
India's nominal GDP growth (real GDP plus inflation) estimated at 11% for the current fiscal.
Real GDP growth projected at 7.3% for the current fiscal and 7% for the next fiscal.
No changes to income tax slabs.
Current tax rates remain unchanged.
Revised total expenditure for FY24 set at ₹44.90-lakh crore.
Average ITR assessment days reduced to 10 days this year.
Government proposes to withdraw tax demand of up to ₹25,000 up to 2009-10.
Working towards making India a Vikasit Bharat by 2047.
Indian economy witnessed tremendous transformation in the last decade.
Free rations provided for 80 crore people, eliminating food worries.
Tax benefits for startups and investments extended to 31.03.2025.
Average real income increased by 50 percent.
Railway-related company stocks trading positively before interim Budget presentation.
Direct financial assistance extended to 11.8 crore farmers in 2023.
Female enrolment in higher education increased by 28 percent in 10 years.
PM Away Yojana Grameen to undertake 2 crore houses.
₹1-lakh crore corpus for 50-year interest-free financing to encourage private sector R&D.
Capital expenditure hiked by 11 percent for the next fiscal to sustain economic growth.
Relief provided to common man from disputed small tax demands up to ₹25,000.
Presented by the honorable Finance Minister Nirmala Sitharaman in the year 2023, 1st February, the following are the key highlights put across in this year 2023's Union Budget:
Economic Growth: Projected GDP growth of 6-6.8% for 2023-24.
Fiscal Deficit: Targeted at 5.9% of GDP, aiming to reach 4.5% by 2025-26.
Infrastructure: Increased capital expenditure by 33% to Rs 10 lakh crore. Focus on railways, regional air connectivity, urban infrastructure development.
Agriculture: Increased agricultural credit target to Rs 20 lakh crore. 2% interest subsidy for short-term loans to farmers. Focus on high-value horticulture crops.
Taxation: New tax regime with lower rates but fewer deductions. Relief for senior citizens and salaried individuals.
Green Growth: Mission LiFE launched to encourage sustainable lifestyles. Increased allocation for renewable energy.
Social Welfare: Increased allocation for education and healthcare. Focus on women empowerment with Rs 28,600 crore allocation.
Other: Incentives for startups, digitalization push, increased defense budget.
Presented by the honorable Finance Minister Nirmala Sitharaman in the year 2022, 1st February, the following are the key highlights put across in this year 2022's Union Budget:
The new provision allows taxpayers to update their past returns as well as include the omitted income by additional tax payment. Updated returns are to be filed in the time span of 2 years (ending from the relevant AY).
For startups, tax incentives are extended for a year. Also, startups are now eligible for tax benefits till 31st March 2023 under Section 80IAC of the Income Tax Act.
Reduction in Corporate surcharge from 12% to 7%.
30% tax levied on the transfer of Virtual Digital Assets, like Cryptocurrency. Gifting is also taxable under the hands of the receiver.
The tax deduction limit for state government employees to NPS was raised to 14% from 10%.
Surcharge and cess on income shall not be considered as business expenditure.
Insurance tax benefits for the special able parents.
Some amendments in Sections 16, 34, 37, 39, and 52 of the Central Goods and Services Act are made. The last date to make any kind of changes and amendments has shifted to 30th November from 30th September of the following year.
The initial rate of 7.5% for custom duty on the import of capital goods is to be imposed.
Imitation jewelry's custom duty was raised to discourage imports.
Duty on packaging boxes and specified leather reduced.
Custom duty reduced to 5% on cut and polished gems and diamonds.
Rs. 2 per liter additional excise duty on unblended fuels.
For the financial year 2023, a 6.4% fiscal deficit has been estimated.
6.9% of the GPD is the estimation of the revised fiscal deficit.
To help fund the Prime Minister's "Gati Shakti" related investments, the government has provided the states Rs. 1 lakh crore as 50-year interest-free loans.
To improve child health, 2 lakh Anganwadis will be upgraded.
All post offices are to be linked with core banking solutions to push financial inclusion.
No Tax slab change
Startups will be facilitated to promote drone usage under the "Drone Shakti" program.
Kisan drone usage is also to be promoted for assessing the crops, spraying nutrients and insecticides, etc.
For the North East Council, PM development initiatives are to be implemented.
Digital rupee using blockchain technology to be introduced by RBI in the financial year 2022 – 2023.
Rs. 19,500 crores announced for allocation in PLI for solar modules.
Online billing system to be launched for the reduction in payment delays.
5G spectrum to be auctioned in the financial year 2022 – 2023.
e-passports to be issued and insured in 2022 – 2023.
400 Vande Bharat trains to be developed in the next 3 years with better efficiency.
PLI (Production Linked Incentive) scheme to be spread across 14 sectors and create 60 lakh job opportunities.
The 2024-2025 Union Budget holds great promise and prioritizes the technological and digital advancement of India and its citizens. While various groups have their own interests, the government must consider the country's overall growth in its decision-making process. Balancing the needs of all citizens is challenging, but if the majority is satisfied, we can expect to see a thriving India in the near future.
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