Union Budget

New Delhi: Finance Minister Nirmala Sitharaman announced the Modi Government’s nine priorities and four pillars to take the country forward as she presented the Union Budget for the year 2024-2025 in the Parliament this morning.

She said, the Government will make sustained efforts on nine priorities for ‘Viksit Bharat’, listing them as productivity and resilience in agriculture, employment and skilling, improved human resources, social justice, manufacturing and services, urban development, energy security, infrastructure, innovation, research and development, and next-gen reforms.

“As mentioned in the interim Budget, we need to focus on four different sections: the poor, women, youth and the farmers,” the Minister said as she presented her seventh Budget.

She announced that Rs. 1.48 lakh crore has been set aside for education, employment and skilling.

Introducing the Prime Minister’s package of five schemes and initiatives to facilitate employment, skilling and other opportunities for 4.1 crore youth over five years with a central outlay of Rs 2 lakh crore, Sitharaman said: “This year, we have made a provision of Rs 1.48 lakh crore for education, employment and skilling.”

She added that the government has extended the PM Garib Kalyan Anna Yojana for five years, which is benefiting 80 crore people.

Standard deduction limit

The government has increased the Standard Deduction limit to Rs. 75,000, allowing the salaried class to save up to Rs. 17,500 in taxes under the new regime. This change, up from Rs 50,000, was widely anticipated, with hopes for a rise to Rs. 1 lakh.

Additionally, the Finance Minister Nirmala Sitharaman proposed raising the long-term capital gains tax from 10 percent to 12.5 percent. A comprehensive review of the Income Tax Act has also been announced, aiming to simplify taxation norms and potentially provide further relief to taxpayers, enhancing their disposable income.

TDS and angel tax

The Tax Deducted at Source (TDS) rate on e-commerce operators has been reduced from 1 percent to 0.1 percent. This reduction lowers the tax compliance burden on e-commerce businesses and facilitates smoother transactions.

The abolition of the angel tax provides significant relief to startups by eliminating the tax on investments received above the fair market value of their shares. This move is expected to foster innovation and growth in the startup ecosystem.

The tax deduction on National Pension Scheme (NPS) contributions has been raised from 10 percent of the salary to 14 percent of the salary. This increase covers both government employees and private company employees, encouraging higher savings in the NPS.

Family pensioners

Under the new tax regime, income received on the buyback of shares will now be taxed in the hands of the recipient. This ensures that shareholders are directly taxed on the gains they realize from buybacks.

The deduction for family pensioners has been enhanced from Rs. 15,000 to Rs. 25,000. This change aims to provide additional financial relief to pensioners, benefiting approximately 4 crore salaried and pensioner individuals.

Natural farming

In the next two years, one crore farmers will be initiated in natural farming, she said. Large-scale vegetable production clusters would be promoted to increase output, she stated.

The Government will release new 109 high-yielding, climate-resilient seeds for 32 field and horticulture crops. According to her, the implementation of various schemes announced in the interim budget in February is still underway.

Guarantee scheme for MSMEs

Nirmala said the Government will come out with a credit guarantee scheme for MSMEs to facilitate term loans without collateral or third-party guarantee. She proposed central assistance of Rs. 2.2 lakh crore for urban housing over the next five years.

As part of a slew of measures to boost the sector, the Government will reduce the turnover threshold of MSME buyers for mandatory onboarding on TReDs platform from Rs 500 crore to Rs 250 crore.

TReDS is an online platform to help MSMEs (Micro, Small and Medium Enterprises).

Among other steps, SIDBI will open 24 new branches to serve MSME clusters. In the Budget, Sitharaman said Rs 2.66 lakh crore is being provided for rural development.

Further, the government will launch a saturation drive under Pradhan Mantri Janjati Adivasi Nyaya Maha Abhiyan  (PM JANMAN).

What is cheaper

• Gold, silver, platinum making charges
• Mobile phones, chargers, accessories
• Cancer drugs
• Medical X-ray machines
• Equipment using solar cells, panels
• Fish and shrimp feed
• Leather goods
• Footwear
• Textiles
• 25 critical minerals

WHAT IS COSTLIER

• Ammonium nitrate
• PVC flex banners
• Imported telecom equipment

Income Tax rates

• Rs. 0-3 lakh – Nil
• Rs. 3-7 lakh – 5 percent
• Rs. 7-10 lakh – 10 percent
• Rs. 10-12 lakh –  15 percent
• Rs. 12-15 lakh – 20 percent
• Above Rs. 15 lakh – 30 percent
• Standard deduction increases from Rs. 50,000 to Rs. 75,000