Today, Finance Minister Nirmala Sitharaman presented the Union Budget 2024, highlighting a comprehensive approach to supporting the poor, women, youth, and farmers. The budget emphasizes increased spending, job creation, and tax relief for the middle class.
Nirmala Sitharaman: Key Income Tax Reforms
A major highlight is the comprehensive review of the Income Tax Act 1961, set to benefit the middle class within six months. The new tax slabs under the New Tax Regime are:
- Up to Rs 3 lakh: No tax
- Rs 3-7 lakh: 5%
- Rs 7-10 lakh: 10%
- Rs 10-12 lakh: 15%
- Rs 12-15 lakh: 20%
- Above Rs 15 lakh: 30%
The standard deduction under the New Tax Regime is raised from Rs 30,000 to Rs 75,000, while the deduction for family pensions increases from Rs 15,000 to Rs 25,000.
Nirmala Sitharaman: Taxation Changes
Capital gains taxation sees significant simplification:
- Short-term capital gains tax reduced to 20%
- Long-term capital gains (LTCG) tax reduced to 12.5% for certain assets
- STT on options increased to 0.1% and on futures to 0.02%
The budget abolishes angel tax for all investor classes and removes the indexation benefit on property sales. TDS on e-commerce transactions is cut from 1% to 0.1%.
Customs Duty and Other Reforms
Customs duties are adjusted across various categories, with reductions on gold, silver, and certain imports, and increases on non-biodegradable plastics and some telecom equipment. The budget also increases the employer NPS deduction to 14% and lowers corporate tax rates for foreign companies from 40% to 35%.
Infrastructure and Social Programs
The budget retains a capex outlay of Rs 11.1 lakh crore for infrastructure, with a fiscal deficit estimated at 4.9% of GDP. New initiatives encompass the Pradhan Mantri Janjatiya Unnat Gram Abhiyan, which targets 63,000 tribal villages, the establishment of 100 India Post Payments Bank branches in the North East, and the creation of 12 industrial parks under the National Industrial Corridor Development Programme.
Finance Minister Nirmala Sitharaman’s Union Budget 2024 aims to boost economic growth through significant reforms in taxation, increased allocations for social and infrastructure programs, and support for various sectors, setting a forward-looking agenda for India’s development.
