The much-awaited Union Budget 2024 was revealed on 23 July in Parliament by our Finance Minister, Nirmala Sitharaman.
Here, we are going to explain the major highlights of budget 2024.
"India's economic growth continues to be the shining exception and will remain so in the years ahead" - said Nirmala Sitharaman in her budget speech.
Budget Priorities
FM stated the budget priorities as follows:
(i)Productivity and resilience in Agriculture
(ii) Employment & Skilling
(iii) Inclusive Human Resource Development and Social Justice
(iv) Manufacturing & Services
(v) Urban Development
(vi) Energy Security
(vii) Infrastructure
(viii) Innovation, Research & Development
(ix) Next Generation Reforms
Further, it was focused on ‘Garib’ (Poor), ‘Mahilayen’ (Women), ‘Yuva’ (Youth) and
‘Annadata’ (Farmer).
Changes in Tax Structure
The tax structure is revised under the new tax regime.
Income Tax Slabs | Tax Rate |
₹0-3 lakh | Nil |
₹3-7 lakh | 5% |
₹7-10 lakh | 10% |
₹10-12 lakh | 15% |
₹12-15 lakh | 20% |
Above ₹15 lakh | 30% |
If you are a salaried employee, you can save up to ₹17,500 in taxes under the new tax regime.
Standard Deduction Limit Increased Under The New Tax Regime
The standard deduction limit under the new tax regime was increased from ₹50,000 to ₹75,000.
Abolishment of Angel Tax
Abolishment of Angel Tax is announced for all classes of investors.
Employment and Skilling
PM Package with five schemes to improve employment and skill training was introduced. The total budget for these schemes is ₹2 lakh crore, with ₹1.48 lakh crore dedicated to education, employment, and skilling.
Job Creation Plans
To create more jobs, the government will start three schemes with job-related incentives. These plans will focus on enrolling workers in EPFO and supporting first-time employees. New hires will get up to ₹15,000 in direct benefit transfers (DBT) in three installments, with a monthly salary cap of ₹1 lakh. This will help 2.1 lakh young people.
Increased Capital Gains Tax On LTCG & STCG
Long-term capital gains on both financial and non-financial assets will now be taxed at 12.5%, up from the previous 10%. Also, the limit of exemption of capital
gains on certain financial assets are increased to ₹1.25 lakh per year from ₹1 lakh per year.
Short-term capital gains tax has been raised to 20% from the previous 15%.
Let’s understand the tax on LTCG & STCG with an example.
Long-Term Capital Gains (LTCG):
If you sold shares worth above ₹1.25 lakh after holding them for over a year, you’ll be taxed at 12.5%.
Short-Term Capital Gains (STCG):
You bought shares 6 months ago and sold them within a year, resulting in a short-term capital gain of ₹1,00,000. Now, you’ll be taxed at 20%.
Key Takeaways:
The increase in the LTCG tax rate to 12.5% is partially offset by the higher exemption limit, which benefits investors with lower gains.
The rise in the STCG tax rate to 20% means higher taxes for short-term investors.
Changes in TDS Rates
Section | Present TDS Rate | Proposed TDS Rate | With effect from |
Section 194D - Payment of insurance commission (in case of person other than company) | 5% | 2% | 1.4.2025 |
Section 194DA - Payment in respect of life insurance policy | 5% | 2% | 1.10.2024 |
Section 194G – Commission on sale of lottery tickets | 5% | 2% | 1.10.2024 |
Section 194H - Payment of commission or brokerage | 5% | 2% | 1.10.2024 |
Section 194-IB - Payment of rent by individual or HUF | 5% | 2% | 1.10.2024 |
Section 194M - Payment of certain sums by certain individuals or Hindu undivided family | 5% | 2% | 1.10.2024 |
Section 194-O - Payment of certain sums by e-commerce operator to ecommerce participant | 1% | 0.1% | 1.10.2024 |
Section 194F relating to payments on account of repurchase of units by Mutual Fund or Unit Trust of India | Proposed to be omitted |
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