THE UNION BUDGET 2024-25 - (July 23, 2024)

HIGHLIGHTS OF THE UNION BUDGET 2024-25 - (July 23, 2024)

Part-A

Budget Estimates 2024-25:

• Total receipts other than borrowings: Rs.32.07 lakh crore.
• Total expenditure: Rs.48.21 lakh crore.
• Net tax receipt: Rs.25.83 lakh crore.
• Fiscal deficit: 4.9 per cent of GDP.
• Government aims to reach a deficit below 4.5 per cent next year.
• Inflation continues to be low, stable and moving towards the 4% target; Core inflation (non-food, non-fuel) at 3.1%.
• The focus of budget is on EMPLOYMENT, SKILLING, MSMEs, and the MIDDLE CLASS.

Package of PM’s five schemes for Employment and Skilling

•  Prime Minister’s Package of 5 Schemes and Initiatives for employment, skilling and other opportunities for 4.1 crore youth over a 5-year period.
  1. Scheme A - First Timers: One-month salary of up to Rs.15,000 to be provided in 3 installments to first-time employees, as registered in the EPFO.
  2. Scheme B - Job Creation in manufacturing: Incentive to be provided at specified scale directly, both employee and employer, with respect to their EPFO contribution in the first 4 years of employment.
  3. Scheme C - Support to employers: Government to reimburse up to Rs.3,000 per month for 2 years towards EPFO contribution of employers, for each additional employee.
  4. New centrally sponsored scheme for Skilling
     • 20 lakh youth to be skilled over a 5-year period.
     • 1,000 Industrial Training Institutes to be upgraded in hub and spoke arrangements.
  5. New Scheme for Internship in  500 Top Companies  to 1 crore youth in 5 years

Nine Budget Priorities in pursuit of ‘Viksit Bharat’:

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

PART B

Indirect Taxes

GST

Buoyed by GST’s success, tax structure to be simplified and rationalised to expand GST to remaining sectors.

Sector specific customs duty proposals

Medicines and Medical Equipment

Three cancer drugs namely TrastuzumabDeruxtecan, Osimertinib and Durvalumab fully exempted from custom duty.

Changes in Basic Customs Duty (BCD) on x-ray tubes & flat panel detectors for use in medical x-ray machines under the Phased Manufacturing Programme.

Mobile Phone and Related Parts

BCD on mobile phone, mobile Printed Circuit Board Assembly (PCBA) and mobile charger reduced to 15 per cent.

Precious Metals

Customs duties on gold and silver reduced to 6 per cent and that on platinum to 6.4 per cent.

Other Metals

BCD removed on ferro nickel and blister copper.

BCD removed on ferrous scrap and nickel cathode.

Concessional BCD of 2.5 per cent on copper scrap.

Electronics

BCD removed, subject to conditions, on oxygen free copper for manufacture of resistors.

Chemicals and Petrochemicals

BCD on ammonium nitrate increased from 7.5 to 10 per cent.

Plastics

BCD on PVC flex banners increased from 10 to 25 per cent.

Telecommunication Equipment

BCD increased from 10 to 15 per cent on PCBA of specified telecom equipment.

Trade facilitation

For promotion of domestic aviation and boat & ship MRO, time period for export of goods imported for repairs extended from six months to one year.

Time-limit for re-import of goods for repairs under warranty extended from three to five years.

Critical Minerals

25 critical minerals fully exempted from customs duties.

BCD on two critical minerals reduced.

Solar Energy

Capital goods for use in manufacture of solar cells and panels exempted from customs duty.

Marine products

BCD on certain broodstock, polychaete worms, shrimp and fish feed reduced to 5 per cent.

Various inputs for manufacture of shrimp and fish feed exempted from customs duty.

Leather and Textile

BCD reduced on real down filling material from duck or goose.

BCD reduced, subject to conditions, on methylene diphenyl diisocyanate (MDI) for manufacture of spandex yarn from 7.5 to 5 per cent.

Direct Taxes

Efforts to simplify taxes, improve tax payer services, provide tax certainty and reduce litigation to be continued.

Enhance revenues for funding development and welfare schemes of government.

58 per cent of corporate tax from simplified tax regime in FY23, more than two-thirds taxpayers availed simplified tax regime for personal income tax in FY 24.

Simplification for Charities and of TDS

Two tax exemption regimes for charities to be merged into one.

5 per cent TDS rate on many payments merged into 2 per cent TDS rate.

20 per cent TDS rate on repurchase of units by mutual funds or UTI withdrawn.

TDS rate on e-commerce operators reduced from one to 0.1 per cent.

Delay for payment of TDS up to due date of filing statement decriminalized.

Simplification of Reassessment

Assessment can be reopened beyond three years upto five years from the end of Assessment Year only if the escaped income is  Rs.50 lakh or more.

In search cases, time limit reduced from ten to six years before the year of search.

Simplification and Rationalisation of Capital Gains

Short term gains on certain financial assets to attract a tax rate of 20 per cent.

Long term gains on all financial and non-financial assets to attract a tax rate of 12.5 per cent.

Exemption limit of capital gains on certain financial assets increased to ? 1.25 lakh per year.

Tax Payer Services

All remaining services of Customs and Income Tax including rectification and order giving effect to appellate orders to be digitalized over the next two years.

Litigation and Appeals

‘Vivad Se Vishwas Scheme, 2024’ for resolution of income tax disputes pending in appeal.

Monetary limits for filing direct taxes, excise and service tax related appeals in Tax Tribunals, High Courts and Supreme Court increased to Rs.60 lakh, Rs.2 crore and Rs.5 crore respectively.

Safe harbour rules expanded to reduce litigation and provide certainty in international taxation.

Employment and Investment

Angel tax for all classes of investors abolished to bolster start-up eco-system,.

Simpler tax regime for foreign shipping companies operating domestic cruises to promote cruise tourism in India.

Safe harbour rates for foreign mining companies selling raw diamonds in the country.

Corporate tax rate on foreign companies reduced from 40 to 35 per cent.

Deepening tax base

Security Transactions Tax on futures and options of securities increased to 0.02 per cent and 0.1 per cent respectively.

Income received on buy back of shares in the hands of recipient to be taxed.

Social Security Benefits.

Deduction of expenditure by employers towards NPS to be increased from 10 to 14 per cent of the employee’s salary.

Non-reporting of small movable foreign assets up to Rs.20 lakh de-penalised.

Other major proposal in Finance Bill

Equalization levy of 2 per cent withdrawn.

Changes in Personal Income Tax under new tax regime

Standard deduction for salaried employees increased from Rs.50,000 to Rs.75,000.

Deduction on family pension for pensioners enhanced from Rs.15,000/- to Rs.25,000/-

Revised tax rate structure:

• 0-3 lakh rupees	Nil
  3-7 lakh rupees	5 per cent
  7-10 lakh rupees	10 per cent
  10-12 lakh rupees	15 per cent
  12-15 lakh rupees	20 per cent
  Above 15 lakh rupees	30 per cent

Salaried employee in the new tax regime stands to save up to Rs.17,500/- in income tax.