A Deep Dive into Union Budget 2024: Opportunities and Challenges
A Deep Dive into Union Budget 2024: Opportunities and Challenges
Nirmala Sitaraman is a Indian economist, politician and senior ledear of the BJP serving as the Minister of Finance and Minister of Corporate Affairs Since 2019.
Nirmala Sitaraman has the presented F.Y. 2025 Union Budget, making her 7th consecutive Budget presentation. This achievement will make her the first Finance Minister to present the Budget seven times in a Row..
India Earns Money In The Following Ways
India Spends its Earning On The Below Mentioned Items
The priorities of the Budget are as follows:-
1)Productivity and Resilience in Agriculture
2) Employment Skilling
3) Inclusive HRD and Social Justice
4) Manufacturing and services
5) Urban development
6) Energy security
7) Infrastructure
8) Innovation, Research & Development
The Finance Minister informed that for the year 2024-25, the total receipts other than borrowings and the total expenditure are estimated at ₹32.07 lakh crore and ₹48.21 lakh crore respectively. The net tax receipts are estimated at ₹25.83 lakh crore and the fiscal deficit is estimated at 4.9 per cent of GDP.
With the start of the new fiscal year (FY 2024-25), there will be some noteworthy changes. These changes will be implemented from April 1, 2024. The corresponding changes from April 1, 2024, will add new regulations or reforms to the prevailing ones. India’s Finance Minister, Smt. Nirmala Sitharaman has presented several new income tax rule changes in the budget 2024. In this article, we have detailed the significant changes that will take effect following the recent budget announcement.
Modifications in the Income Tax Slabs
According to the announcement made under the latest budget, the revised tax slab applies to the new tax regime. The corresponding changes from April 1, 2024, are highlighted below.
• The standard deduction limit under the head salary has been increased from Rs. 50,000 to Rs. 75,000.
•The limit for deduction of family pension has also been increased to Rs. 20,000.
••Deduction on employer's contribution u/s 80CCD(2) has been increased to 14% of salary and dearness allowance.
Advantages of the Implementation of New Tax Regime
The following are the advantages of the new tax regime to taxpayers:
With the introduction of the new tax regime, taxpayers need not maintain a track record of travel tickets and rent receipts.
The income tax rule changes from April 1, 2024 make sure taxpayers can get rid of complex tax planning as these changes aim to simplify tax planning.
With the introduction of the income tax rule changes from April 1, 2024, the basic exemption limit has been elevated from Rs.2.5 lakhs to Rs.3 lakhs. This increased exemption limit makes the novel tax regime more appealing. Note that the highest tax rate, i.e., 30%, will be imposed on income exceeding Rs.15 lakhs.
Changes in Taxation on Capital Gains
Budget 2024 has made significant changes on the tax implications on the capital gains which are as under:
Holding period for determining long term and short term has been simplified, for all listed securities - period of 12 months is to be considered and for other assets period of 24 months should be considered for determining wheether the asset is a long term capital asset or not.
Further, no indexation will be available for sale made from 23rd July, 2024 for any long term capital asset.
LTCG Tax Rate u/s 112A and 112 have been changed to 12.5% from 23rd July, 2024.
STCG Tax Rate u/s 111A has been increased to 20% from 23rd July, 2024.
Further, exemption limit u/s 112A has been increased from Rs. 1 lakh to Rs. 1.25 lakhs
No changes are proposed to the tax rates for Indian companies and partnerships (including Limited Liability Partnerships). The corporate tax rate for nonresident corporate taxpayers would be reduced from 40% to 35%
Economic Growth and Development
Infrastructure: Significant investments in highways, railways, and urban development projects. Special focus on smart cities and enhancing rural connectivity.
Manufacturing: Incentives and subsidies to boost domestic manufacturing under the "Make in India" initiative. Simplified regulations to attract foreign direct investment (FDI).
Technology and Innovation: Increased funding for research and development, especially in emerging technologies like AI, robotics, and biotechnology. Establishment of innovation hubs and tech parks.
Social Welfare
Healthcare: Expansion of healthcare infrastructure, with a focus on rural areas. Increased budget allocation for the National Health Mission and the Ayushman Bharat scheme.Education: Higher investment in primary and secondary education. Focus on improving digital infrastructure in schools and promoting vocational training programs.
Rural Development: Enhanced funding for schemes like MGNREGA and Pradhan Mantri Awas Yojana to improve rural livelihoods and housing.
Tax Reforms
Direct Taxes: Revision of tax slabs to provide relief to middle-income groups. Introduction of incentives for savings and investments.
Indirect Taxes: Rationalization of GST rates to simplify the tax structure and reduce the burden on small businesses. Measures to improve GST compliance and reduce evasion.
Green Initiatives
Renewable Energy: Major investments in solar, wind, and other renewable energy projects. Introduction of subsidies for green energy adoption and development of energy-efficient technologies.
Sustainable Practices: Promotion of sustainable agricultural practices and organic farming. Increased funding for afforestation and conservation programs.
Fiscal Discipline
Fiscal Deficit: Measures to reduce the fiscal deficit through efficient revenue collection and rationalized expenditure. Efforts to improve public sector efficiency and reduce leakages.
Public Debt Management: Strategies to manage public debt and ensure long-term fiscal sustainability. Introduction of bonds and other HB to create a balanced approach that stimulates economic growth, promotes social equity, and ensures environmental sustainability, all while maintaining fiscal discipline.
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