Impact of Budget 2024 on IT Sector

Finance Minister Nirmala Sitharaman introduced the first Budget under Modi 3.0, revealing the Prime Minister's package which encompasses five schemes designed to create jobs, enhance skills, and provide opportunities for 41 million young people over the next five years. Regarding capital gains, short-term gains on certain financial assets will be taxed at 20%, while long-term gains on all financial and non-financial assets will be taxed at 12.5%. The exemption limit for capital gains has been increased to Rs 1.25 lakh per year, benefiting lower and middle-income groups.For the current year, Rs 1.48 lakh crore has been set aside specifically for education, employment, and skill development programs.

The two current tax exemption schemes for charities will be consolidated into one. The TDS rate on many payments will decrease from 5% to 2%, and the 20% TDS on mutual fund or UTI unit repurchases will be eliminated.

The Finance Minister said, for pursuit of ‘Viksit Bharat’, the budget envisages sustained efforts on the following 9 priorities for generating ample opportunities for all.?

1. Productivity and resilience in Agriculture
2. Employment & Skilling
3. Inclusive Human Resource Development and Social Justice
4. Manufacturing & Services
5. Urban Development??
6. Energy Security
7. Infrastructure
8. Innovation, Research & Development and
9. Next Generation Reforms

the government will implement 3 schemes for ‘Employment Linked Incentive’, as part of the Prime Minister’s package. These will be based on enrolment in the EPFO, and focus on recognition of first-time employees, and support to employees and employers.?For helping the youth, who have not been eligible for any benefit under government schemes and policies, she announced a financial support for loans upto ?10 lakh for higher education in domestic institutions. E-vouchers for this purpose will be given directly to 1 lakh students every year for annual interest subvention of 3 per cent of the loan amount.

Budget 2024-25 increased standard deduction of salaried employees from ? 50,000/- to ? 75,000/- for those opting for new tax regime. Similarly, deduction on family pension for pensioners enhanced from ? 15,000/- to ? 25,000/-. Assessments now, can be reopened beyond three years up to 5 years from end of year of assessment, only if, the escaped income is more than ? 50 Lakh. The new tax regime rate structure is also revised to give a salaried employee benefits up to ? 17,500/- in income tax.

New income tax regime tax slabs are

Up to Rs 3 lakh the tax is NIL

From Rs 3 lakh to Rs 7 lakh the tax rate is 5%

From Rs 7 lakh to Rs 10 lakh the tax rate is 10%

From Rs 10 lakh to Rs 12 lakh the tax rate is 15%

From Rs 12 lakh to Rs 15 lakh the tax rate is 20%

Above Rs 15 lakh income the tax rate is 30%