Budget 2024 Highlights: New Tax Slabs Announced, Capital Gains Taxes Hiked; New Regime is The Way to Go, Says FM Sitharaman

Finance Minister Nirmala Sitharaman presented Union Budget 2024 on Tuesday. Sitharaman said that the Budget focuses on on four major classes – poor, women, youth and farmer. From changes in Income Tax slabs under the New Tax Regime to revisions in customs duties on several items, FM Sitharaman made a slew of big announcements. Follow LIVE updates of the Union Budget 2024 on News18. 

This is the first Budget of the Modi 3.0 government after Lok Sabha Elections 2024. This is also a record seventh Budget speech for Sitharaman. Here are the highlights of the Union Budget 2024:

The Finance Minister said that the Budget will make sustained efforts on 9 priorities for Viksit Bharat:

• Productivity and resilience in agriculture
• employment and skilling
• manufacturing and services
• urban development
• infrastructure
• innovation, research and development
• Next gen reforms

Income Tax

The FM announced a review of the Income Tax Act. Sitharaman also made several announcements on LTCG, STCG, Corporate tax and Personal Income Tax.

• Two Tax Incentive Regimes For Charity Sector Will Be Merged Into One
• TDS Rate On e-Commerce Operators Reduced To 0.1 per cent from 1 per cent
• Long-term Cap Gains On All Financial & Non-Financial Instruments Will Attract 12.5%
• Short-term Gains Will Attract 20% On Some Assets
• Limit Of Long-term Capital Gains Exemption Hiked To Rs 1.25 lakh from Rs 1 lakh
• Listed Financial Assets Held For More Than 1 Year Will Be Long Term
• Long-term Capital Gains Tax Increased To 12.5% From 10%. This also means that Long Term Capital gains tax rate on sale of property will be reduced from 20% to 12.5%, however, indexation benefits will be removed.
• Short-Term Capital Gains Tax Hiked to 20% from 15%
• No Angel Tax On All Classes Of Assets
• Security Transaction Tax On F&O Increased To 0.02% & 0.1%
• Propose To Cut Corporate Tax For Foreign Companies To 35% from 40%

Personal Income Tax

• Standard Deduction limit increased to Rs 75,000 from Rs 50,000 under New Tax Regime
• Deduction on family pension for pensioners increased from Rs 15,000 to Rs 25,000 under New Tax Regime
• Lowest Slab In New Tax Regime Increased To Rs 3 lakh From Rs 2.5 lakh. Here’s what the Income Tax Slab under the New Regime would look like:

0-3 lakh: Nil

3-7 lakh: 5%

7-10 lakh: 10%

10-12 lakh: 15%

12-15 lakh: 20%

Above 15 lakh: 30%

• The FM said that salaried Employee In New Tax Regimes Stands To Save Rs 17,500 In Income Tax
• No change in tax rates under the Old Tax Regime.

Customs Duty proposals

• To provide relief to cancer patients, the FM announced that three more medicines will be free of customs duties.
• The FM also announced changes in BCD for X-ray tubes and flat panel detectors for X-ray medicines under phased manufacturing programme.
• The customs duty cut on gold and silver has also been reduced to 6%. The BCD on platinum has been reduced to 6.4%.
• The FM also proposed to cut customs duty on manufacturing leather and footwear.
• Customs duty on mobile phones, mobile PCBA and chargers have also been brought down to 15%.
• The BCD on shrimp and fish feed has been reduced to 5%.

Big Push For Employment:

FM Sitharaman announced big moves on employment generation and money for first-time job-seekers. Sitharaman announced three schemes for employment linked schemes.

• The FM announced that the government will provide 1 month wages to all persons newly entering workforce in the formal sector.
• For job creation in manufacturing, the FM announced that the government will incentivise employees and employers with EPFO contribution. The government will reimburse EPFO contributions of employers up to Rs 3,000 per month for 2 years for all new hires.

Sops to Bihar and Andhra Pradesh

The Finance Minister made big announcements for Bihar and Andhra Pradesh, the two states ruled by BJP allies JDU and TDP.

Bihar FM Sitharaman announced a Rs 26,000 crore allocation for highways in Bihar. She added that the request of Bihar for multilateral development will be expediated. She also announced that Rs 15,000 crore will be arranged with add amounts in future years to set up new airports, medical colleges, sports infrastructure in Bihar.

Bihar has also been given a Rs 11,500 crore flood mitigation package.

The FM also announced a plan for comprehensive development of Vishnupath and Mahabodhi corridors on the lines of Kashi-Vishwanath corridor. Nalanda University will also be promoted as a tourist spot apart from being an educational centre. A comprehensive development initiative for Rajgir will also be undertaken which holds religious significance for Hindus, Buddhists and Jains.

Andhra Pradesh: The FM announced Rs 15,000 crore to develop the capital of Andhra Pradesh. She also announced grants for backward regions of Andhra Pradesh as per the AP Reorganisation Act.

The FM announced a proposal for the completion of Polavaram Irrigation Project ensuring food security of the nation. The FM also announced essential infrastructure such as water, power, railways and roads in Kopparthy node on the Vishakhapatnam-Chennai Industrial Corridor and Orvakal node on Hyderabad-Bengaluru Industrial Corridor.

MSMEs

The FM made the following announcements for MSMEs

• New MSME guaranteee plan to enable loans up to Rs 100 crore
• PSU banks to make internal assessment model for MSME credit
• Govt to bring MSME credit guarantee scheme for collateral-free loan
• New mechanism to facilitate bank credit to MSMEs while being in SMA (special mention account) stage
• Limit Of Mudra Loans enhanced from Rs 10 lakh To Rs 20 lakh
• Export hubs to be set up under a regulatory body

Other Key Announcements

• Sitharaman announced a scheme for providing internship opportunities in 500 top companies to 1 crore youth in 5 years. An allowance of Rs 5,000 per month along with a one-time assistance of Rs 6,000 through the CSR funds will be provided.
• The Finance Minister also announced a Rs 10 lakh crore outlay for Prime Minister’s urban housing plan.
• Finance Minister Sitharaman announced the PM Suryaghar Muft Bijli Yojana for 1 crore houses.
• Sitharaman said that states will be encouraged to bring down stamp duties.
• The Finance Minister also announced flood relief assistance to Assam, Himachal Pradesh and Uttarakhand.

Who Said What

Prime Minister Narendra Modi, reacting to the Union Budget 2024, said it was for the “empowerment for the new middle class.” “In the last 10 years, 25 crore people have come out of poverty. This budget is for the empowerment of the new middle class. The youth will get unlimited opportunities from this budget. Education and skill will get a new scale from this budget. This budget will give power to the new middle class…This budget will help women, small businessmen, MSMEs,” PM Modi said.

Union Defence Minister thanked Sitharaman for the highest allocation to Defence. “As far as the allocation to Ministry of Defence is concerned, I thank the Finance Minister for giving the highest allocation to the tune of Rs 6,21,940.85 Crore, which is 12.9 % of total Budget of GoI for FY 2024-25. The capital outlay of Rs 1,72,000 Crore will further strengthen the capabilities of Armed Forces. Earmarking of Rs, 1,05,518.43 Crore for domestic capital procurement will provide further impetus to Atmanibharta. I am pleased that Border Roads have been given 30% increase in allocation over the last budget under the capital head,” he posted on X.

Congress MP Shashi Tharoor called it an “underwhelming Budgdet”. “It is an underwhelming budget. I didn’t hear anything about the key issues facing the common man. There is no mention of MNREGA, and insufficient mention of steps taken to improve the income of a common person. We have seen far too little from govt on addressing income disparity. On job creation, a token gesture was made. I welcome only one provision which is abolishing of tax on angel investors. I had recommended it to Arun Jaitley more than 5 years ago,” Tharoor said.

Leader of Opposition Rahul Gandhi called it a “Kursi Bachao” budget.

When asked whether the Modi government plans to scrap the Old tax regime, the FM said, “I can’t say now on whether old tax regime will be ended. Our motto right now is to simplify the tax regime and new tax regime is the way to go for that. Sunset on old tax regime will be based on review. 70 per cent people last year opted for new tax regime.”

Ahead of the presentation, the FM arrived in Parliament with the Bahi Khata, clad in a white and magenta silk sari. Earlier today, she met President Droupadi Murmu and sought her approval for the Budget. Murmu fed her curd and sugar, a tradition where a person going for an important assignment is fed this.