Highlights of Interim Union Budget 2024-25

Here are the key highlights from the?Interim Union Budget 2024-25?presented by Union Minister for Finance and Corporate Affairs, Smt. Nirmala Sitharaman:

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1. Social Justice Focus: Prime Minister’s emphasis on uplifting four major groups:?‘Garib’ (Poor),?‘Mahilayen’ (Women),?‘Yuva’ (Youth), and?‘Annadata’ (Farmers). Government’s commitment to the welfare of these sections.
2. Poverty Alleviation and Financial Inclusion: 25 crore people?lifted out of multi-dimensional poverty in the last decade. ?34 lakh crore?disbursed through PM-Jan Dhan accounts, resulting in significant government savings. PM-SVANidhi?provided credit assistance to?78 lakh street vendors.
3. Tribal Development: PM-JANMAN Yojana?to aid particularly vulnerable tribal groups (PVTG). PM-Vishwakarma Yojana?supporting artisans and craftspeople in 18 trades.
4. Farmers’ Welfare: PM-KISAN SAMMAN Yojana?provided financial assistance to?11.8 crore farmers. PM Fasal Bima Yojana?ensures crop insurance for?4 crore farmers. e-NAM?integrated 1361 mandis, benefiting?1.8 crore farmers?with a trading volume of??3 lakh crore.
5. Women Empowerment: Over?70% of PM Awas Yojana houses?allocated to women from rural areas. Female enrollment in higher education increased by?28%. Girls and women constitute?43%?of STEM course enrollment.
6. Housing and Solarization: Target of?3 crore houses?under?PM Awas Yojana (Grameen)?to be achieved soon. 1 crore households?to receive?300 units of free electricity?monthly through rooftop solarization.
7. Healthcare Expansion: Ayushman Bharat?coverage extended to?ASHA workers,?Anganwadi Workers, and Helpers.
8. Research and Innovation: ?1 lakh crore corpus?established for long-term financing and deep-tech technologies. Capital expenditure?for infrastructure development increased by?11.1%?to??11,11,111 crore.
9. Railway Corridors: PM Gati Shakti?to implement?3 major economic railway corridors?for logistics efficiency and cost reduction.

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Direct Taxes:

1. Tripling of Direct Tax Collections: Over the past decade, direct tax collections have impressively?tripled, reflecting positive economic growth.
2. Tax Rate Rationalization:

The government has been implementing significant revisions aimed at encouraging taxpayers to embrace the new?tax ?regime. Which was introduced in the Union Budget 2020. While the new tax regime offered concessional tax rates, it restricted taxpayers from claiming several exemptions and deductions such as HRA, LTA, 80C, and 80D.

In the 2023 Budget amendments, the tax exemption limit was increased to Rs 3 lakhs, accompanied by revised tax slabs.?

Income up to Rs 3,00,000: Nil

Income from Rs 3,00,001 to Rs 6,00,000: 5%

Income from Rs 6,00,001 to Rs 9,00,000: 10%

Income from Rs 9,00,001 to Rs 12,00,000: 15%

Old Tax regime overview

Before the new tax regime, taxpayers operating under the old regime were provided access to over 70 exemptions and deductions, including Home Rent Allowance (HRA) and Leave?Travel ?Allowance (LTA). These deductions effectively reduced taxable income and lowered tax liabilities.?

Notably, Section 80C stood out as one of the most popular and generous deductions, allowing for a reduction of taxable income up to Rs. 1.5 lakh.

Income Tax Slabs 2023-24 (Old Regime)

Up to Rs 250,000: Nil

Rs 250,001 to Rs 500,000: 5%

Rs 500,001 to Rs 1,000,000: 20%

Above Rs 1,000,000: 30%

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Additional Considerations for Old Tax regime

For resident individuals aged above 60 years (senior citizens), the basic exemption limit stands at Rs 300,000. Similarly, for super senior citizens (above 80 years), the basic exemption limit is Rs 500,000.

o??? The new tax scheme ensures?no tax liability?for individuals with income up to ?7 lakh, a significant increase from ?2.2 lakh in 2013-14.

3.????? Presumptive Taxation Thresholds:

o??? Thresholds for presumptive taxation for retail businesses and professionals have been raised, promoting ease of doing business.

o??? Corporate tax rates have also been?slashed, benefiting existing domestic companies and new manufacturing entities.

4.????? Enhanced Taxpayer Services:

o??? The government has focused on improving taxpayer services.

o??? Faceless Assessment and Appeal?have transformed the assessment system, ensuring efficiency, transparency, and accountability.

o??? Updates in income tax returns and a new?Form 26AS?have simplified the filing process.

Indirect Taxes:

1.????? GST’s Impact:

o??? The implementation of the?Goods and Services Tax (GST)?has unified India’s indirect tax regime.

o??? It has reduced the compliance burden on trade and industry.

o??? Industry leaders view the transition to GST as largely?positive.

2.????? Positive Outcomes of GST:

o??? Supply chain optimization due to the elimination of tax arbitrage and octroi.

o??? Dismantling of check posts at state and city boundaries.

o??? The tax base of GST has?doubled, and average monthly gross GST collection has nearly doubled to ?1.66 lakh crore.

3.????? Customs Facilitation:

o??? Measures in Customs have facilitated international trade, reducing import release time.

Tax Proposals:

1.????? Continuity in Taxation:

o??? The existing tax rates for both direct and indirect taxes, including import duties, will be?retained.

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Impact on Common Man and Inflation:

·???????? Direct Tax Relief: The increased threshold for no tax liability benefits the common man.

·???????? GST Efficiency: Simplification in indirect taxes benefits trade, manufacturing, and value addition.

·???????? Inflation: While the budget does not directly address inflation, overall economic growth and tax reforms can indirectly impact inflation.

The?housing scheme?announced in the?Interim Union Budget 2024?aims to address the housing needs of deserving sections of the middle class. Here are the key points:

1.????? Target Audience:

o??? The scheme targets individuals living in?rented houses,?slums,?chawls, or?unauthorized colonies.

o??? It aims to empower them to?buy or build their own houses.

2.????? Objective:

o??? The primary goal is to provide affordable housing options to those who currently lack permanent homes.

o??? By facilitating home ownership, the government aims to improve the living conditions and financial stability of these individuals.

3.????? Alignment with “Housing For All”:

o??? This initiative is in line with Prime Minister Narendra Modi’s ambitious?Housing For All?scheme.

o??? It reflects the government’s commitment to ensuring that every citizen has access to safe and decent housing.

4.????? Positive Impact:

o??? Experts view this move as?proactive?and?positive.

o??? It not only fulfills long-standing housing needs but also energizes the housing loan segment and propels real estate growth.

o??? By addressing housing needs and promoting lending opportunities, the government demonstrates a commitment to an inclusive and optimistic future.

5.????? Additional Measures:

o??? The budget also emphasizes the construction of houses under the?Pradhan Mantri Awas Yojana (PMAY)-Rural.

o??? So far,?3 crore houses?have been built under PMAY-Rural, and another?2 crore houses?will be taken up over the next five years to meet the growing demand arising from an increase in the number of families.