Union Budget 2024 (India) Review and Information
The Union Budget 2024 of India has introduced several changes aimed at simplifying tax procedures, boosting economic growth, and supporting various sectors of the economy. This comprehensive review highlights the key aspects of the budget and their potential impact.
Simplification of Tax Processes and Structure
One of the significant steps taken by the government is to simplify the process of filing Income Tax Returns (ITR). This measure is expected to make it easier for individuals and businesses to comply with tax regulations, reducing the complexity and time involved in the process.
Revised Tax Slab, Deductions and Rates
The budget has introduced several changes to the tax structure to make it more straightforward and beneficial for taxpayers.
- Standard Deduction:
- In the new tax regime, the standard deduction has been increased from ₹50,000 to ₹75,000. This increase will provide additional relief to taxpayers by reducing their taxable income.
- Family Pension Deduction:
- For pensioners, the deduction on family pension is proposed to be enhanced from ₹15,000 to ₹25,000. This will benefit pensioners by reducing their tax liability.
- New Tax Structure:
- No tax on income up to ₹3 lakhs.
- 5% tax on income from ₹3 lakhs to ₹7 lakhs.
- 10% tax on income from ₹7 lakhs to ₹10 lakhs.
- 15% tax on income from ₹10 lakhs to ₹12 lakhs.
- 20% tax on income from ₹12 lakhs to ₹15 lakhs.
- 30% tax on income above ₹15 lakhs.
These revised tax rates aim to provide relief to taxpayers, especially those in the lower and middle-income brackets, while ensuring a progressive tax structure.
Changes in Import Taxes
- Gold and Silver: The import tax on gold and silver has been reduced from 6.5% to 6%. This reduction will likely make gold and silver more affordable for consumers and could boost the jewelry industry.
Changes in Capital Gains Tax
The budget has revised the tax rates on capital gains:
- Long-Term Capital Gains Tax: The tax rate on long-term capital gains has been set at 12.5%. This adjustment aims to encourage long-term investments by offering a lower tax rate.
- Short-Term Capital Gains Tax: The tax rate on short-term capital gains has been increased to 20%. This change is intended to encourage investors to hold their investments for longer periods.
Support for Start-ups and Entrepreneurs
The budget has introduced several measures to support start-ups and entrepreneurs:
- Angel Tax Exemption: Investors in start-ups are exempt from the angel tax. This exemption is expected to encourage more investments in start-ups, fostering innovation and entrepreneurship.
- Late Payment of TDS: Late payment of TDS (Tax Deducted at Source) is no longer considered a crime. This change reduces the compliance burden on businesses, making it easier for them to manage their tax obligations.
Industrial and Economic Growth Initiatives
- Capital Gains: The capital gain limit will be increased. This change aims to encourage more investments in the economy by providing better returns on capital investments.
- Industrial Parks: The Plug and Play Industrial Park Scheme will be implemented in 100 cities across the country. This initiative is designed to provide ready-to-use infrastructure for industries, promoting industrial growth and job creation.
- Export Concessions: Concessions on the export of mineral products will be provided to boost the mining sector and increase foreign exchange earnings.
- Support for Women: A substantial provision of ₹3 lakh crores has been made for the development of women. This allocation aims to empower women through various programs and initiatives.
- Cheaper Goods: The budget has made provisions to make several goods cheaper, including electric vehicles, gold and silver jewelry, mobile phones, and related parts, Solar panels and x-rays machines. This move is expected to boost consumer demand and support these industries.
- Agriculture: Priority has been given to increasing production in the agriculture sector. This includes various measures to support farmers and enhance agricultural productivity.
- FDI Simplification: The process of foreign direct investment (FDI) will be simplified to attract more foreign investments into the country.
- Interest-Free Loans: States will receive interest-free loans for 15 years. This financial support is intended to help states undertake developmental projects without the burden of interest payments.
- Rural Development: A provision of ₹2.66 lakh crores has been made for rural development. This allocation aims to improve infrastructure and living conditions in rural areas.
- Support for Farmers: An announcement of ₹1.52 lakh crores has been made for farmers. This support will help farmers with financial aid and improve their overall well-being.
- Education Loans: Financial support for loans up to ₹10 lakhs for higher education has been announced. This initiative will make higher education more accessible to students.
Nine Priorities for Upcoming Years
The budget outlines nine key priorities for the coming years to drive sustainable and inclusive growth:
- Manufacturing and Services: Boosting the manufacturing and services sectors to create jobs and drive economic growth.
- Urban Development: Enhancing urban infrastructure and development to improve living standards in cities.
- Energy Security: Ensuring reliable and sustainable energy supply to support economic activities.
- Infrastructure: Developing robust infrastructure to facilitate trade and commerce.
- Innovation and R&D: Promoting research and development to drive innovation and technological advancements.
- Next-Generation Reforms: Implementing reforms to streamline regulations and enhance ease of doing business.
- Productivity and Resilience in Agriculture: Improving agricultural productivity and resilience to ensure food security.
- Employment and Skilling: Creating employment opportunities and providing skill development programs to the workforce.
- Inclusive Human Resource Development and Social Justice: Ensuring inclusive growth and social justice for all sections of society.
Employment-Linked Incentives
To boost employment, the budget introduces several incentives linked to job creation:
- First-Time Employees: A one-month wage incentive for first-time employees entering the formal sector. This incentive aims to encourage formal employment.
- Manufacturing Sector: Incentives for manufacturing employers and employees for the first four years. This measure is designed to support the manufacturing sector and create jobs.
- Youth Employment: A new scheme will benefit 3 million employees and their employers. The government will provide incentives to 30 lakh youths entering the job market by contributing one month’s PF (Provident Fund).
EPFO Contribution Reimbursement
- The government will reimburse ₹3,000 per month towards EPFO (Employees' Provident Fund Organisation) contribution for two years for each additional employee. This reimbursement aims to encourage businesses to hire more employees and reduce the financial burden on employers.
E-Commerce and Youth Internship Initiatives
- E-Commerce Export Hub: An e-commerce export hub will be created in collaboration with the private sector. This hub aims to boost exports and provide a platform for Indian businesses to reach global markets.
- Youth Internship Scheme: An all-inclusive scheme for youth internships will be planned. Internships will be given to 1 crore youth in top companies. As part of this scheme, each intern will receive a one-time assistance of ₹6,000 and a monthly allowance of ₹5,000 during the internship. This initiative aims to provide practical experience and financial support to young professionals.
The Union Budget 2024 is a comprehensive plan designed to drive economic growth, support various sectors, simplify tax procedures, and provide robust support for employment and youth development. By addressing key areas such as tax simplification, industrial growth, support for start-ups, and infrastructure development, the budget aims to create a more inclusive and prosperous economy for all citizens.
