Budget 2024 Key Highlights Live Updates: Finance Minister Nirmala Sitharaman unveiled the Union Budget 2024-25 in the Lok Sabha today. This marks the first budget of Prime Minister Narendra Modi’s third term. The 2024 budget outlines nine key priorities aimed at creating numerous opportunities. On the macroeconomic front, FM Sitharaman has lowered the fiscal deficit target for FY25 to 4.5% and introduced a revised income tax structure along with an increase in long-term capital gains tax. Follow our live blog for the latest updates on Budget 2024, including news on tax slabs and share market impacts.
The government allocates 21% of every rupee earned to states’ share of taxes and duties, and 19% towards interest payments.
Approximately 27% of government revenue comes from borrowing and other liabilities, while 19% is derived from income tax.
FM Sitharaman announced increased customs duties on certain items, which are expected to become more expensive after Budget 2024:
– Ammonium Nitrate
– PVC Flex Films/Flex Banners
– Laboratory Chemicals
– Solar Glass for solar cell/module manufacture
– Non-Biodegradable Plastic
Conversely, FM Sitharaman revealed reductions in customs duties for various products, which are anticipated to be cheaper after Budget 2024:
– Mobile phones and chargers
– Printed Circuit Board Assembly (PCBA) and Oxygen Free Copper for resistor manufacture
– Precious metals like Gold, Silver, and Platinum
– Blister Copper and Ferro-Nickel
– Cancer drugs such as Trastuzumab, Deruxtecan, Osimertinib, and Durvalumab
– Components for vessel manufacture
– Solar energy parts
– Certain brood stock, shrimp, and fish feed
– Medical products like orthopedic implants and artificial body parts
Budget 2024 introduced the removal of indexation benefits on property sales and reduced long-term capital gains (LTCG) tax to 12.5%.
Previously, LTCG from property sales was taxed at 20% with indexation benefits. The new rate is 12.5% without indexation benefits.
Here is the budget allocation for major sectors:
– Defence: ₹4,54,773 crore
– Rural Development: ₹2,65,808 crore
– Agriculture and Allied Activities: ₹1,51,851 crore
– Home Affairs: ₹1,50,983 crore
– Education: ₹1,25,638 crore
– IT and Telecom: ₹1,16,342 crore
– Health: ₹89,287 crore
– Energy: ₹68,769 crore
– Social Welfare: ₹56,501 crore
– Commerce & Industry: ₹47,559 crore
Additional tax proposals include:
– Abolishing Angel tax for all investor categories
– Implementing a simpler tax regime for domestic cruise operations
– Establishing safe harbour rates for foreign mining companies selling raw diamonds
– Reducing corporate tax rate for foreign companies from 40% to 35%
Budget Estimates 2024-25:
- Total Receipts for FY25 are projected at ₹32.07 lakh crore
- Total Expenditure for FY25 is estimated at ₹48.21 lakh crore
- Net tax receipts are forecasted at ₹25.83 lakh crore
- Gross market borrowings are expected to reach ₹14.01 lakh crore
- Net market borrowings are anticipated at ₹11.63 lakh crore
- Fiscal deficit for FY25 is estimated at 4.9% of GDP
Finance Minister Nirmala Sitharaman noted that the fiscal consolidation strategy announced in 2021 has been effective. The goal is to reduce the deficit to below 4.5% next year, with plans to ensure Central Government debt as a percentage of GDP declines from 2026-27 onwards.
Sector-Specific Customs Duty Changes Announced:
- Basic Customs Duty (BCD) on mobile phones, mobile PCBA, and chargers reduced to 15%
- Customs duties on 25 critical minerals for nuclear, renewable, space, defence, telecommunications, and high-tech sectors are exempt; BCD on two of these minerals reduced
- BCD on certain broodstock, polychaete worms, shrimp, and fish feed cut to 5%
- Customs duty exemptions for various shrimp and fish feed manufacturing inputs
- BCD on real down filling material from duck or goose lowered
- Customs duties on gold and silver reduced to 6%; platinum reduced to 6.4%
- BCD on ferro-nickel and blister copper eliminated
- BCD on oxygen-free copper for resistors removed
- BCD on ammonium nitrate increased from 7.5% to 10%
- Export period for goods imported for aviation and boat & ship MRO repairs extended from 6 months to 1 year
Taxes on Buy-Backs and Securities Transaction Tax (STT) Rates:
- Buy-Back of Shares: Budget 2024 proposes taxing income from company buy-backs as dividend for the recipient investor, instead of additional income-tax on the company. The cost of such shares will be considered a capital loss for the investor.
- Securities Transaction Tax (STT) Rates: The proposal includes increasing STT on options from 0.0625% to 0.1% of the option premium, and on futures from 0.0125% to 0.02% of the trade price.
FM Sitharaman announced a reduction in the tax rate for foreign companies. Budget 2024 proposes lowering the income-tax rate on foreign companies’ income (excluding special rates) from 40% to 35%.
She also introduced incentives for the International Financial Services Centre (IFSC):
- Retail schemes and Exchange Traded Funds (ETFs) in IFSC will enjoy tax exemptions similar to those available for specified funds.
- Certain income of the Core Settlement Guarantee Fund in IFSC will be exempt.
- Section 94B will not apply to some finance companies in IFSC.
- Venture capital funds (VCFs) in IFSC will not need to explain the source of funds when extending loans or other amounts.
- Surcharge will not apply to income-tax on securities income for specified funds.
FM Sitharaman proposed rationalizing and simplifying capital gains taxation:
- Short-term gains tax on specified financial assets raised to 20% from 15%, while other financial and non-financial assets remain taxed at current rates.
- Long-term gains tax on all assets increased to 12.5%. The exemption limit for capital gains on listed financial assets raised from ₹1 lakh to ₹1.25 lakh per year.
- Listed financial assets held over a year will be long-term; unlisted financial assets and non-financial assets must be held for at least two years to be considered long-term.
- Unlisted bonds, debentures, debt mutual funds, and market-linked debentures will be taxed on capital gains regardless of holding period.
Here are some TDS and TCS announcements:
- TDS on Payments to Partners: Firms will need to apply TDS at 10% on aggregate payments exceeding ₹20,000 to a partner in a financial year.
- TCS on Luxury Goods: A 1% TCS will be levied on notified luxury goods valued above ₹10 lakh.
- TDS on Floating Rate Savings Bonds (FRSB) 2020: TDS will apply on interest exceeding ₹10,000 from FRSB 2020 or other notified securities.
FM Sitharaman revised the tax rate structure in the new income tax regime, leading to a ₹17,500 saving in income tax. The new tax slabs are:
- ₹0-3 lakh: Nil
- ₹3-7 lakh: 5%
- ₹7-10 lakh: 10%
- ₹10-12 lakh: 15%
- ₹15 lakh and above: 30%
Capital Gains Tax Announcements:
- Short-term capital gains tax on certain financial assets revised to 20%
- Long-term capital gains tax revised to 12.5% for financial assets
- TDS rate on e-commerce operators reduced to 0.1% from 1%
FM Sitharaman Announces Customs Duty Reductions:
- Customs duties on gold and silver reduced to 6%, and platinum to 6.4%
- Lithium, copper, and cobalt exempted from customs duty
- Expanded list of exempted capital goods for manufacturing solar cells and panels
- BCD on MDI for spandex yarn manufacturing reduced from 7.5% to 5% under conditions
- Customs duty exempted on connectors and oxygen-fused copper
Fiscal Projections and Industrial Parks:
- FY25 fiscal deficit projected at 4.9% of GDP, down from 5.1% in the Interim Budget; government aims to reduce it below 4.5%
- FY25 expenditure estimated at ₹48.21 lakh crore
- FY25 receipts estimated at ₹32.07 lakh crore
- Target to achieve a fiscal deficit below 4.5% next year
Industrial Park Development and Proposals:
- “Plug and play” industrial parks to be developed in or near 100 cities
- 12 industrial parks sanctioned under the National Industrial Corridor Development Programme
- Critical Mineral Mission to focus on domestic production, recycling, and overseas acquisition of critical minerals
Skilling Program Package:
- Skilling Programme and ITI Upgradation:
- Upgrade 1,000 ITIs in hub & spoke models over 5 years
- Emphasize quality and outcomes in collaboration with states and industry
- Internship and Skilling Initiatives:
- 1 crore youth to be trained by top companies over five years
- 12-month Prime Minister’s Internship with a monthly allowance of ₹5,000
The Budget 2024 is anticipated to highlight the government’s roadmap for achieving ‘Viksit Bharat’ by 2047. While continuing with fiscal prudence, the focus is expected to be on capital expenditure to generate jobs and targeted social sector investments. The Budget is also likely to emphasize enhancing access to physical, social, and digital infrastructure.
Finance Minister Nirmala Sitharaman will deliver her Budget speech at 11 am today in the Lok Sabha. Following the presentation, Sitharaman and her Finance Ministry team will brief the media on Budget 2024.
Union Finance Minister Nirmala Sitharaman is set to present her seventh consecutive Union Budget today in the Lok Sabha, surpassing the record of former FM Morarji Desai. This Budget 2024 will be the first full budget of the National Democratic Alliance (NDA) government in Prime Minister Narendra Modi’s third term. However, it will be the Modi government’s 13th Budget since taking office in 2024.
Finance Minister Nirmala Sitharaman is preparing to present the Union Budget for FY 2024-25 in Parliament today. This marks the first budget of Prime Minister Narendra Modi’s third term in office.
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