Budget 2024 All Updates: New Income Tax slabs announced, 'Angel Tax' abolished; Bihar, Andhra in focus

Finance Minister Nirmala Sitharaman took part in the traditional 'halwa' ceremony, marking the final stage of preparing the Union Budget 2024-25. The Budget is set to be presented in the Lok Sabha on July 23. In the lead-up to the presentation, 'halwa' is prepared and served to the officials and staff of the finance ministry involved in the budget's preparation.

Amit Jain, Global CEO, Sterling and Wilson Renewable Energy said "The green energy sector is witnessing a paradigm shift, driven by strategic government initiatives and innovative financial instruments. The Production Linked Incentive (PLI) schemes aim to boost domestic manufacturing and create a competitive edge for Indian companies in the coming years. This initiative alone could create numerous jobs and drive technological innovation. We hope that the government will revise the GST rates for renewable energy components, reducing it to 5% (from current 18 %), thereby significantly lowering the cost structure for green energy projects

Budget Expectation on the steel sector by Mr. Vibhor Kaushik, Managing Director, Vibhor Steel Tubes Limited

“Over the past decade or so, India has been growing at a healthy pace thanks to a boom in construction, infrastructure, and automobile space, which has in turn augured extremely well for the domestic steel sector. We expect that with higher fund allocation for both construction and infrastructure space in this Budget, demand for steel products would remain strong going ahead. With increased funding for construction and infrastructure projects in this year's budget, the steel demand is expected to remain strong. Reducing taxes on raw materials used in steel production will benefit local steel companies, while higher import duties on Chinese steel will make our domestic products more competitive."

Dr. Miniya Chatterji, Founding Director, Anant School for Climate Action, and CEO, Sustain Labs Paris:

"In the Union Budget 2024, it would be important to prioritize initiatives that drive sustainable growth. Investments should focus on renewable energy projects, green infrastructure, and sustainable agriculture. Another good move could be a reduction in the GST levied on renewable energy components. Additionally, provisions should be made to promote skilling and innovation in the field of sustainability".

Vimal Kumar, Managing Director, Best Agrolife Ltd said, “As India prepares for the Union Budget 2024, it is imperative for the government to take decisive steps to support the agrochemical sector, given its vital role in ensuring food security and sustainable agriculture. Our heavy reliance on imports from China highlights the need for implementing Production-Linked Incentive (PLI) benefits to boost local production.''

‘’Additionally, increasing import duties on domestically produced raw materials can further encourage this growth. Lowering GST rates from the current 18% to 5% will reduce costs for farmers, thereby improving their income and the overall farm economy. Providing incentives will encourage micro-entrepreneurs to promote modernization through initiatives such as 'Drone as a Service' and the use of advanced machinery. Furthermore, introducing robust measures to combat counterfeit and spurious materials will ensure the integrity and safety of agrochemicals in India."

Girish Agarwal, Co-Founder, Zeno Health

"While the government has increased healthcare expenditure in recent years, it remains lower compared to neighboring countries like Bangladesh and Bhutan. According to the National Health Policy 2017, the government aims to raise healthcare spending to 2.5% of GDP by 2025. To achieve this, increased allocation toward technology integration in public healthcare systems is crucial.

 Given our large population, collaboration with organizations and startups can improve distribution and monitoring of healthcare services. These technological advancements can benefit services delivered through the ASHA network, government hospitals, primary health centers, ambulance services, and insurance delivery.

Despite government schemes like the Pradhan Mantri Jan Aushadhi Yojana (PMJAY), India's access to generic medicines remains limited. Two factors contribute to this limitation: quality control at the source and the lack of prescription law enforcement. 

The government should enforce a law requiring doctors’ prescriptions to include drug names rather than specific brands to address this. Such a change would enhance transparency and directly benefit consumers.

We hope that the government will prioritize these initiatives during the upcoming budget session, as they hold significant promise for future generations."

Economic Survey 2024 Updates: Finance Minister Nirmala Sitharaman presented the Economic Survey 2023-2024 on Monday, ahead of the highly anticipated Union Budget 2024-25 set to be unveiled the following day. The Union Budget for the fiscal year 2024-25 will be introduced in Parliament this Tuesday by Sitharaman, marking the first budget of Prime Minister Narendra Modi's third term.

The Monsoon session, which begins today, will feature 19 sittings until August 12. During this session, the government plans to present six bills, including one to replace the 90-year-old Aircraft Act, and seek Parliament's approval for the budget of Jammu and Kashmir, which is currently under central rule.

Chief Economic Advisor V. Anantha Nageswaran has expressed confidence in achieving the 7 percent growth target set in the Economic Survey 2023-24, presented on July 22. Nageswaran noted that while meeting this target is attainable, there are several risk factors to consider, such as unpredictable weather patterns, growing financial market uncertainties in developed economies, and geopolitical complexities. The government remains hopeful about achieving the growth target despite these challenges.

The 2024–25 Union Budget focuses on nine priorities including productivity, jobs, social justice, urban development, energy security, infrastructure, and reforms.

India's economic growth continues to shine: FM Sitharaman

Global economy is still in the grip of policy uncertainty, says Finance Minister

• In next two years, one crore farmers will be initiated in natural farming: FM Sitharaman in LS.

• Government to strengthen production, storage and marketing of pulses

• Government, in partnership with states, will promote digital public infrastructure for agriculture

• Large scale vegetable production clusters would be promoted to increase production

• Government will provide finance for shrimp farming and marketing

• Jan Samarth-based Kisan Credit Card to be introduced in five states

• Govt to set up working women hostels to promote women participation in workforce

• Govt to provide incentive to 30 lakh youth entering job market by providing 1 month PF contribution

• Fast-tracking growth of rural economy and employment opportunity will be policy goal

• New centrally-sponsored scheme for skilling in collaboration with states, industry; 20 lakh youth to be skilled over 5 years

• Model skilling loan scheme will be revised to facilitate loans up to Rs 7.5 lakh

• 1,000 ITIs to be upgraded in hub and spoke model

Govt to provide e-vouchers directly to 1 lakh students every year with interest subvention of 3 per cent of loan amount: FM

Union government to arrange financial assistance to Bihar through aid from multilateral development agencies: FM Sitharaman

Govt to set up airports, medical colleges and sports infra in Bihar: FM

Power projects, including setting up a new 2400 MW power plant at Pirpainti in Bihar, will be taken up at a cost of Rs 21,400 crore

• SIDBI to open 24 new branches to serve MSMEs clusters: FM Nirmala Sitharaman

• Public sector banks to build in-house capability for credit assessment of MSMEs: FM

• Govt will reduce turnover threshold of MSME buyers for mandatory onboarding on TReds platform from Rs 500 cr to Rs 250 cr: FM

Backward region grant will be provided to 3 districts of Andhra Pradesh: FM in Budget.

Andhra Pradesh to get funds to promote industrial development for essential infra like water, power, railways, roads: FM

For promoting women-led development, Finance Minister Nirmala Sitharaman on Tuesday said the Budget carries an allocation of more than Rs 3 lakh crore for schemes benefitting women and girls.

Sitharaman said this signals the government's commitment in enhancing women's role in economic development.

"For promoting women-led development, the Budget carries an allocation of more than Rs 3 lakh crore for schemes benefitting women and girls," she said.

Sitharaman said the government will set up working women hostels to promote their participation in the workforce.

An internship allowance of Rs 5,000 per month, along with one-time assistance of Rs 6,000, will be provided under this scheme

Additional debt recovery tribunals to be set up: FM in Lok Sabha

Appropriate changes will be made to IBC and steps will be taken to strengthen tribunals: FM

"Urban Housing: Under the PM Awas Yojana-Urban 2.0, the housing needs of 1 crore poor and middle-class families will be addressed with an investment of Rs 10 lakh crores. This will include the central assistance of Rs 2.2 lakh crores in the next five years," announces FM.

Finance Minister proposes Rs 1.5 lakh cr long-term interest-free loans to support states towards infra development.

• Raising Productivity and Climate-Resilient Varieties

• Thrust on Natural Farming: 2 crore farmers to be supported in the next 2 years (certificates).

• Atmanirbharta in Oil Seeds

• Vegetable Production: Large-scale clusters.

• DPI in Agricultural Infrastructure: Coverage of farmers and their land within three years. Digital crop survey in 400 districts this year only. Issuance of Jan Samarth-based certificates.

• Shrimp Brood Stocks: Shrimp farming.

• National Co-operation Policy for the Co-operative Sector

• First Timers Scheme: Government will provide a one-month wage to all individuals newly entering the workforce in formal sectors, disbursed in 3 installments. Direct benefit transfer of up to Rs 15,000 will be given to employees with salaries up to Rs 1 lakh per month. This scheme will benefit 2.1 crore youth.

• Manufacturing Jobs Assistance: Incentives will be provided to both employees and employers in the manufacturing sector during the first 4 years of employment. This will benefit 30 lakh youth and employers.

• Support to Employers: For additional employment in all sectors with a salary of up to Rs 1 lakh per month, the government will provide Rs 3,000 per month for 2 years to cover EPFO charges. This will incentivize the creation of up to 50 lakh additional jobs.

• Skilling Initiative: 20 lakh youth will be skilled over the next 5 years.

• Education Loans: Financial support of up to Rs 10 lakh for higher education in domestic institutions, with an annual interest subvention of 3%.

FM Sitharaman says, "I announce a comprehensive review of the Income Tax Act 1961. This will reduce disputes and litigation. It is proposed to be completed in 6 months."

Duty on gold and silver has been reduced.

FM Sitharaman says, "I propose to reduce customs duties on gold and silver to 6% and 6.5% on platinum."

• Standard Deduction: Increased from Rs 50,000 to Rs 75,000 for those under the new tax regime.

• Increased tax deductions on family pension for pensioners from Rs 15,000 to Rs 25,000.

• Salaried employee in New Tax Re.gime stands to save up to Rs 17,500 in income tax based on changes.

New Tax Slabs:

• No tax on income up to Rs 3 lakh

• Income from Rs 3 lakh to Rs 7 lakh taxed at 5%

• Income from Rs 7 lakh to Rs 10 lakh taxed at 10%

• Income from Rs 10 lakh to Rs 12 lakh taxed at 15%

• Income from Rs 12 lakh to Rs 15 lakh taxed at 20%

• Income above Rs 15 lakh taxed at 30%

Senior Congress leader P Chidambaram took a swipe at the government over the Union Budget, saying he is glad that Finance Minister Nirmala Sitharaman has read the Congress 2024 manifesto after the Lok Sabha poll results.

Chidambaram said he was also pleased to hear that the Finance Minister will abolish the Angel Tax.

The Congress has pleaded for its abolition for many years and most recently in the Congress manifesto on page 31, he said.

Senior Congress leader P Chidambaram took a swipe at the government over the Union Budget, saying he is glad that Finance Minister Nirmala Sitharaman has read the Congress 2024 manifesto after the Lok Sabha poll results.

Chidambaram said he was also pleased to hear that the Finance Minister will abolish the Angel Tax.

The Congress has pleaded for its abolition for many years and most recently in the Congress manifesto on page 31, he said.

A hike in the standard deduction by 50% from 50,000 to Rs 75,000 means that salaried employees can reduce their taxable income by Rs 75,000 before calculating the income tax they owe.

Here's a simple breakdown:

• Previous Deduction: Earlier, the standard deduction was Rs 50,000. So let's assume your annual salary was Rs 5,00,000. You could subtract Rs 50,000, leaving you with Rs 4,50,000 as taxable income.

• New Deduction: Now, the deduction has increased to Rs 75,000. So, for the same Rs 5,00,000 salary, you can subtract Rs 75,000, leaving you with Rs 4,25,000 as taxable income.

• Impact: This means you have less income on which you need to pay tax, reducing your overall tax bill, with more take-home pay.

Samajwadi Party president Akhilesh Yadav slammed the Union Budget, claiming that it has ignored the interests of the youth and farmers.

Speaking to reporters after Finance Minister Nirmala Sitharaman presented the budget in Parliament, Yadav linked her announcements of several development measures for Bihar and Andhra Pradesh to the BJP's political compulsion to "save" its government and asked if there was anything for Uttar Pradesh, India's most populous state.

Yadav said Uttar Pradesh has given the country its prime minister, claiming that the state's farmers have received nothing despite the government's earlier promises of doubling their income.

The state has no "mandi" for farmers, and the budget's announcement for the highway from Buxar in Bihar should have included extension to Purvanchal Expressway, he said.

Yadav played down the announcement of internship for the youth, saying they want permanent jobs and not short-term measures.

"Will reservation be given for these short-term employment initiatives," he asked, blaming the government for unemployment.

Finance Minister Nirmala Sitharaman has proposed increasing the Securities Transaction Tax (STT) on futures and options (F&O) trading to discourage retail investors from participating in these high-risk instruments.

Key Changes:

• STT on the sale of options will rise from 0.0625% to 0.1% of the option premium.

• STT on the sale of futures will increase from 0.0125% to 0.02% of the trade price.

Context:

• The Economic Survey highlighted concerns over the rising interest of retail investors in speculative F&O trading.

• Derivatives trading caters to gambling instincts and can lead to significant gains or losses.

• SEBI data revealed that 89% of individual traders in the equity F&O segment suffered losses, with an average loss of Rs 1.1 lakh in FY22.

Implications:

• This tax hike aims to reduce the allure of speculative trading among retail investors and encourage safer investment practices.

• The SEBI has also approved stricter norms to limit the entry of individual stocks into the derivatives segment, ensuring that only stocks with consistent turnover remain in F&O trading.

Housing Boost: Government will spend Rs 2.2 lakh crore over five years—under the Pradhan Mantri Awas Yojana-urban—to help build homes for 1 crore poor and middle-class families in cities. They will also offer cheaper loans to make buying homes more affordable.

Impact on rental housing: New rules will make renting homes easier and more transparent. They will also create dorm-style housing for factory workers.

Impact on tax changes: Rent from property will now be taxed differently, and there will be clearer rules for property sales and penalties for illegal property deals.

Congress leader and Leader of Opposition in Lok Sabha Rahul Gandhi termed the Union budget as a 'kursi bachao' move which makes hollow promises to BJP allies at the cost of other states.

Gandhi also alleged that the budget presented by Finance Minister Nirmala Sitharaman is a copy paste of the Congress manifesto and the previous budgets. He added that the budget doesn't give any relief to the common Indian.

The National Stock Exchange (NSE) CEO and MD, Ashish Chauhan on Tuesday termed the Union budget's moves on securities transaction tax and short term capital gains tax as "minor changes" which will not impact markets much.

On the correction in markets right after these announcements by Finance Minister Nirmala Sitharaman in her budget speech, Chauhan said the sell-off is a result of investors not understanding the implications of the moves.

West Bengal Chief Minister and TMC supremo Mamata Banerjee alleged that the Union budget presented by Finance Minister Nirmala Sitharaman is politically biased.

Banerjee pointed out that her state was completely deprived in the budget. It doesn't look into interests of poor people, she said.

The NCP (SP) responded to the Union Budget presented by Finance Minister Nirmala Sitharaman saying that it was not designed for India but for the NDA allies of Bihar and Andhra Pradesh.

In a post on 'X', NCP (SP) spokesperson Clyde Crasto said Maharashtra was neglected in the Budget

Lauding Finance Minister Nirmala Sitharaman and her team for bringing out a budget that is designed to "empower all sections of the society," Prime Minister Narendra Modi in his remarks said that the budget also stresses on targeted measures for addressing the problems faced by the youth of the country.

He said the budget will will open many new opportunities for youngsters.

All union budgets focus on only four broad areas—farmers, youth, women and taxpayers.

But few manage to crack the mysterious alchemy of rightly balancing spending and taxation. And regardless of the efforts, budgets are often questioned over a lack of zinger.

But what will set the FY25 budget apart?

Needy sectors like agriculture, infrastructure, and MSMEs got budgetary policy interventions, although it can be debated whether the measures were adequate enough.

Private forecasts are flashing red. While CMIE data pegs the FY24 unemployment rate at about 8%—higher than last year—a Citigroup report stressed that even with a 7% GDP growth rate, India may add just about 8-9 million jobs a year as against the needed 11-12 million. 

Another area that needs urgent attention is the rural economy, where the twin-evils of unemployment and inflation seem to have caused untold voter resentment.

Economic Surveys are expected to assess the current State of the Economy and outline the path that we can potentially take for progress and prosperity and being an economic powerhouse.

The current survey (2023-24) that was released on July 22, like last year's survey, does inform us that we are in good shape, but it does not seem to reflect the confidence that the economic leadership was demonstrating last year about our economic future.

Global economic and geopolitical conditions, combined with AI, will hold back India’s progress.

Labour and capital productivity are the most important drivers of Growth, but the survey does not discuss them.

Once again, the question raised is whether Digital India can satisfactorily address issues which have brought lakhs of farmers, especially in north India, on the warpath since December 2020.

Even with higher allocations, more subsidies and free distribution of food grains, the new Budget needs to provide a healing touch for the farming communities.

Worrisome for the Union Finance Minister Nirmala Sitharaman is not just the increased reliance on imports of pulses but inflationary pressures across domestic markets which the Budget has to address, year after year.

The budget's focus on the space sector is expected to drive significant advancements, with the private sector playing a crucial role.