Key Highlights of Budget 2024 by Nirmala Sitharaman

Key Highlights of Budget 2024 by Nirmala Sitharaman

Budget 2024 is designed to support economic growth, employment, and development across various sectors with a strong focus on infrastructure, youth, and social inclusion. The government’s commitment to fiscal discipline is evident in the reduction of the fiscal deficit and the allocation of significant resources for capital expenditure.

Tax Reforms:

1. Capital Gains Tax:
   • Short Term Capital Gain (STCG) on financial assets increased from 15% to 20%.
   • Long Term Capital Gain (LTCG) on financial assets increased from 10% to 12.5%.
   • LTCG basic exemption limit increased from ₹1 lakh to ₹1.25 lakh. However, as a relief, the Budget 2024 has increased the exemption limit for shares and equity-oriented funds to Rs 1.25 lakh from Rs 1 lakh per year. Previously, short-term capital gains from listed shares and equity mutual funds were taxed at 15%, while long-term capital gains were taxed at 10%.

1. Standard Deduction:
   • For salaried employees under the new tax regime, the standard deduction increased from ₹50,000 to ₹75,000.
   • Family pension deduction increased from ₹15,000 to ₹25,000.
2. New Tax Regime Slabs:
   • ₹0 – ₹3 lakh: 0%
   • ₹3 lakh – ₹7 lakh: 5%
   • ₹7 lakh – ₹10 lakh: 10%
   • ₹10 lakh – ₹12 lakh: 15%
   • ₹12 lakh – ₹15 lakh: 20%
   • Above ₹15 lakh: 30%
   • Salaried employees in the new tax regime can save up to ₹17,500 in income tax.
3. TDS and STT Changes:

1. • TDS on repurchase by mutual funds or UTI withdrawn.
   • Securities Transaction Tax (STT) on futures increased from 0.0125% to 0.02%.
   • STT on options increased from 0.0625% to 0.10%.
2. Other Key Changes:
   • Default in TDS arrest provision withdrawn.
   • Angel Tax abolished.
   • Re-opening of assessment period reduced from 10 years to 5 years.
   • Reintroduction of block assessment in case of search and seizure.

Economic Survey Highlights:

Capital Expenditure:

1. Capex Allocation:

1. • Set at ₹11.11 lakh crore or 3.4% of GDP for FY25.
   • Historical capex growth: ₹3.1 lakh crore (2019), ₹4.4 lakh crore (2021), ₹5.5 lakh crore (2022), ₹7.5 lakh crore (2023), ₹10 lakh crore (2024).

2. Fiscal Deficit:

1. • Lowered to 4.9% of GDP.
   • Market borrowing unchanged at ₹14.13 lakh crore.
   • Target to reach below 4.5% by FY26.

Summary of Key Highlights of Budget 2024

Sectoral and Policy Initiatives:

1. Mobile Phones and Chargers:

1. • Basic Customs Duty (BCD) reduced to 15%.

2. Mudra Loans:

1. • Limit extended to ₹20 lakh from ₹10 lakh.

3. Focus Areas:

1. • Employment, skilling, MSMEs, middle class.

4. Youth and Skill Development:

1. • ₹2 lakh crore over next 5 years.
   • Five schemes targeting 4.1 crore youth.

5. Agricultural Development:

1. • ₹1.52 lakh crore allotted.
   • Release of 109 high-yielding, climate-resilient seeds for 32 crops.
   • 1 crore farmers to be initiated into natural farming.

6. Urban Development:

1. • PM Awas Yojana-Urban 2.0 for 1 crore poor and middle-class families.
   • Transit Oriented Development plans for 14 large cities.
   • 100 weekly ‘haats’ or street food hubs in select cities.

7. Infrastructure and Energy:

1. • Pumped Storage Policy for electricity storage.
   • New 2400 MW power plant at Pirpainti in Bihar.
   • ₹2.2 lakh crore for urban housing over next five years.
   • Long-term interest-free loans to states for infrastructure development.

8. Rural Development:

1. • ₹2.66 lakh crore provisioned.
   • Phase IV of PM Gram Sadak Yojana in 25 rural habitations.
   • Digital coverage of farmland and farmers.

9. Women and Workforce:

1. • Over ₹3 lakh crore allocated for women and girls’ schemes.
   • Working women hostels to promote workforce participation.

10. Education and Skilling:

1. • ₹1.48 lakh crore for education, employment, and skilling.
   • Model skilling loan scheme revised to facilitate loans up to ₹7.5 lakh.
   • E-vouchers for loans up to ₹10 lakh for higher education.

11. Industrial Development:

1. • Industrial node at Gaya on Amritsar-Kolkata Industrial Corridor.
   • 100 branches of India Post Payments Bank to be set up in the North East.

12. MSMEs:

1. • Credit guarantee scheme for MSMEs.
   • SIDBI to open 24 new branches for MSME clusters.
   • New mechanisms for facilitating bank credit to MSMEs during stress periods.

13. Social and Economic Inclusion:

1. • PM Garib Kalyan Ann Yojna extended for 5 years.
   • Incentives for 30 lakh youth entering job market with 1-month PF contribution.

14. Innovation and Research:

1. • Anusandhan National Research Fund for basic research and prototype development.
   • ₹1 lakh crore financing pool for private sector-driven research and innovation.
   • ₹1000 crore venture capital fund for the space economy.
2. Political Stability:
   • Re-election of PM Modi’s government for a historic third term.
3. Inflation and Economic Stability:
   • Inflation remains low and stable, targeting 4%.
4. Youth-Focused Schemes:
   • Five schemes targeting 4.1 crore youth over 5 years with a central outlay of ₹2 lakh crore.
5. Nine Priorities Roadmap:
   • A roadmap for pursuing nine priorities for India’s development.
6. Budget Focus:
   • Emphasis on employment, skilling, MSMEs, and the middle class with ₹1.48 lakh crore allocated for education, employment, and skilling.
7. Agricultural Development:
   • Release of 109 high-yielding and climate-resilient crop varieties.
   • Initiation of 1 crore farmers into natural farming with support for certification and branding.
8. Vegetable Production Clusters:
   • Development of large-scale vegetable production clusters near consumption centers.
9. Employment and Skilling Schemes:
   • ₹2 lakh crore package announced for five new schemes focusing on jobs and skilling for 4.1 crore youths.
10. Sustained Efforts for Viksit Bharat:
    • Continued efforts on nine priorities for a developed India (Viksit Bharat).

24. Miscellaneous:

1. • Voluntary closure of LLPs to save late fees and fines.
   • Debt recovery and insolvency tribunals to be strengthened.
   • New centrally-sponsored scheme for skilling in collaboration with states and industry.

FAQs on New Capital Gains Tax proposed in Union Budget 2024