Finance Minister Nirmala Sitharaman announced the Union Budget 2024-2025 in the Lok Sabha today, prioritising support for Garib, youth, women, and farmers. This marks her seventh consecutive budget presentation, surpassing the record previously held by former Prime Minister Morarji Desai. Presented on July 23, this budget is the first by the BJP-led NDA government following its re-election in June.
In the speech, the Finance Minister emphasised on increasing expenditure, job generation, and tax benefits for the middle class. Significant alterations in taxation were also revealed, such as an increase in the Securities Transaction Tax (STT) and taxes on both short-term and long-term capital gains. Furthermore, adjustments to the personal income tax brackets within the New Tax Regime were announced.
Key Highlights of Budget 2024-2025
The Budget 2024-2025 has introduced several important changes and new initiatives to support various sectors of the economy. Among them were the following nine priorities:
- Productivity and resilience in agriculture
- Employment and skilling
- Inclusive Human resource development and social justice
- Manufacturing and services
- Urban development
- Energy security
- Infrastructure
- Innovation, research, and development
- Next generation reforms
To further elaborate, here are the key highlights detailing specific measures and reforms announced in the budget:
1. Revisions in Personal Income Tax Rates under the New Tax Regime
- Standard deduction for salaried employees increased from ₹50,000 to ₹75,000
- Deduction on family pension for pensioners enhanced from ₹15,000 to ₹25,000
- The revised tax structure will save taxpayers ₹17,500
- New tax rates are as follows:
| Income Range (in ₹) | Revised Tax Rates (New Tax Regime) |
| 0-3 lakh | Zero tax |
| 3-7 lakh | 5% |
| 7-10 lakh | 10% |
| 10-12 lakh | 15% |
| 12-15 lakh | 20% |
| 15 lakh and above | 30% |
Read in detail: Budget 2024 Tax Updates: New Income Tax Slab, Change in STCG and LTCG Rate
2. Securities Transaction Tax on Futures and Options
- STT on Futures and Options contracts raised to 0.2% and 0.1%, respectively
- Income from share buybacks will now be taxed for the recipient.
- Tax deduction on NPS contributions increased from 10% to 14% of salary, applicable to both government employees and private sector workers
3. Changes in Capital Gains Taxes
- Short-term capital gains (STCG) tax on specific financial assets increased from 15% to 20%
- Long-term capital gains (LTCG) tax on all assets raised to 12.5% from 10%
- Exemption limit on capital gains for certain listed financial assets increased from ₹1 lakh to ₹1.25 lakh annually
- Angel tax abolished for all investor classes to support start-ups and innovation
4. Launch of 3 Employment-Linked Schemes
- Government to provide incentives to 30 lakh youth entering the job market, including one month's provident fund (PF) contribution
- Establishment of working women hostels to boost women's workforce participation
- MGNREGA to offer 100 days of wage employment annually to at least one adult member from every household seeking manual work
5. Increase in Spending on Education
- Support loans of up to ₹10 lakh for students in domestic institutions who haven't benefited from other government schemes
- E-vouchers with 3% interest subvention provided to 1 lakh students annually
- Comprehensive internship scheme in 500 top companies for 1 crore youth over five years, offering 12 months of real-life business exposure
6. Big Allocations to Bihar and Andhra Pradesh in Budget
- "Purvodaya" plan for the all-round development of Bihar, Jharkhand, West Bengal, Odisha, and Andhra Pradesh
- ₹26,000 crore allocated for expressways in Bihar, with additional projects including power projects, new airports, medical colleges, and sports infrastructure
- Series of announcements for Andhra Pradesh under the AP Reorganisation Act to support industrial development with funds for water, power, and road infrastructure
7. Mudra Loans Limit Enhanced to ₹20 Lakh
- Mudra loans limit raised from ₹10 lakh to ₹20 lakh for MSMEs that have successfully repaid previous loans
- Introduction of a credit guarantee scheme to support term loans for MSMEs, covering credit risks
8. Allocation of ₹2 Lakh Crore to Employ Youth
- ₹2 lakh crore allocated to create employment for 4.1 crore youth over five years
- ₹1.48 crore allocated for skilling 20 lakh youth over five years, with the upgrade of 1,000 industrial training institutes
- One-time wage incentive for first-time employees across sectors through Direct Benefit Transfer (DBT)
- Launch of internship opportunities in 500 companies for 1 crore youth over five years with a monthly allowance of ₹5000
9. Fiscal Deficit Estimated at 4.9% of GDP
- Net tax receipts estimated at ₹25.83 lakh crore
- Fiscal deficit projected at 4.9% of GDP
- Gross market borrowings through dated securities estimated at ₹14.01 lakh crore and net borrowings at ₹11.63 lakh crore
- Commitment to reducing the fiscal deficit to below 4.5% of GDP by 2025-26
10. Customs Duty Reductions
- Full exemption on customs duty for three additional cancer medicines
- Reduction in duty on mobile devices and accessories to 15%
- Gold and silver duties reduced to 6%, platinum to 6.4%
- Basic customs duty on spandex yarn reduced from 7.5% to 5%
11. NPS for Minors: NPS Vatsalya
- Introduction of NPS Vatsalya under the National Pension Scheme for minors, allowing parents and guardians to start pension planning for their children
- Contributions accumulate until the child turns 18, at which point the amount is transferred to a standard NPS account
12. Pradhan Mantri Awas Yojana-Urban 2.0
- Launch of PM Awas Yojana-Urban 2.0 with ₹2.2 lakh crore central assistance over five years
- Construction of 1 crore additional houses for urban poor and middle-class families
- ₹10 lakh crore investment, including central assistance
- Provision of interest subsidy for affordable housing loans
- Policies for efficient and transparent rental housing markets
Conclusion
The Union Budget 2024-2025 has introduced various changes and initiatives aimed at boosting the economy, with a strong focus on manufacturing and infrastructure to accelerate growth. However, it did not mention any new developments for the Railways. The stock markets reacted with high volatility during the budget presentation, with the Sensex dropping 1,266.17 points to 79,235.91 and the Nifty falling 435.05 points to 24,074.20, particularly after the hike in STT on Futures and Options and upward revision in capital gains tax. On a positive note, corporate tax for foreign companies has been reduced to 35%, and there have been revisions in the taxation for charities and cruise operations.