Budget 2024: Major Announcements and Changes

Finance Minister Nirmala Sitharaman unveiled significant changes in the income tax slabs and other financial measures in the Union Budget presented on Tuesday.

This budget marks the first for the new Narendra Modi government, aiming to provide relief to taxpayers and stimulate economic growth. One of the major highlights of the budget is the revision of income tax slabs. The standard deduction has been increased from ₹50,000 to ₹75,000, benefiting millions of taxpayers who opt for the new tax regime. The revised tax rates are as follows: Nil for income up to ₹3 lakh, 5% for ₹3-7 lakh, 10% for ₹7-10 lakh, 15% for ₹10-12 lakh, 20% for ₹12-15 lakh, and 30% for income above ₹15 lakh. These changes are expected to save salaried employees up to ₹17,500 annually in taxes.

In addition to income tax changes, the budget also addresses capital gains taxes. The short-term capital gains tax (for assets held for less than a year) has been increased from 15% to 20%, while the long-term capital gains tax (for assets held for over a year) has been raised from 10% to 12.5%. Furthermore, the indexation benefit for property sales has been discontinued, affecting how property gains are taxed. Corporate tax rates have also been revised to encourage foreign investment. The corporate tax for foreign companies has been reduced from 40% to 35%.

In terms of employment and skilling, the government proposed incentives for companies to train staff and promised cheaper loans for higher education. These measures aim to enhance the skill set of the workforce and support economic development. The budget includes sector-specific announcements to support various industries. Customs duties on three cancer drugs—TrastuzumabDeruxtecan, Osimertinib, and Durvalumab—have been fully exempted. ‘

Additionally, customs duties on mobile phones, mobile Printed Circuit Board Assembly (PCBA), and mobile chargers have been reduced to 15%, while duties on gold and silver have been reduced to 6%, and on platinum to 6.4%. The Security Transactions Tax on futures and options has also been increased to 0.02% and 0.1%, respectively. Several direct tax measures have been introduced to simplify tax compliance and support businesses. Long-term capital gains up to ₹1.25 lakh from listed equities are now exempted, and the TDS rate on e-commerce operators has been reduced from 1% to 0.1%. The budget also decriminalizes delays in TDS payment up to the due date and reduces the time limits for reopening income tax assessments and search cases.

The budget outlines comprehensive fiscal measures, targeting a fiscal deficit of 4.9% of GDP for FY25, with plans to reduce it further below 4.5% the following year. It focuses on nine priority areas, including manufacturing, services, and next-generation reforms, in pursuit of Viksit Bharat (Developed India). The budget also allocates ₹1.52 lakh crore for agriculture and allied sectors and ₹11.11 lakh crore for capital expenditure. Significant financial support has been announced for specific states, with ₹60,000 crore projects for Bihar and ₹1.5 lakh crore assistance for all states.

Notably, ₹11,500 crore has been allocated for irrigation and flood mitigation projects in Bihar, and ₹15,000 crore special financial support for Andhra Pradesh through multilateral development agencies. Responding to political criticisms, Sitharaman dismissed opposition claims of preferential treatment to states run by supporting parties. She emphasized the comprehensive nature of the assistance promised to all states and highlighted the historic success of the BJP-led government in securing more seats than the opposition alliance. In conclusion, the 2024 Union Budget focuses on tax relief, employment, skilling, and support for small businesses and the middle class. With significant changes in income tax slabs and corporate tax reductions, the government aims to foster economic growth and industrialization across the country.