Investors worry, salaried people happy, students benefited, infra boosted | Key Highlights of Budget FY24-25

Finance Minister Sitharaman tabled the first Union Budget of the BJP-led NDA government in its third term in office. Sitharaman is the first full-time woman finance minister of the country and has presented five full budgets since July 2019 and an interim budget on February 1, 2024.

 KEY UPDATES: 

• Changes In New Income Tax Regime Slab
  0-3 lakh: Nil | 3-7 lakh: 5% | 7-10 lakh: 10% | 10-12 lakh: 15% | 12-15 lakh: 20%
  Above 15 lakh: 30%

• Standard Deduction in the New Tax Regime increased. The Finance Minister has hiked the limit from 50,000 to 75,000. Pensioners will benefit from a higher deduction on family pension, which has been raised from Rs 15,000 crore to Rs 25,000 crore.

• Long-term capital gains tax is set at 12.5%. Finance Minister Nirmala Sitharaman announced that long-term capital gains on all financial and non-financial assets will attract a tax rate of 12.5 percent. Listed financial assets held for more than a year will be classified as long-term. Additionally, the exemption limit for capital gains will be set at Rs 1.25 lakh per year.

• Short-term gains on some financial assets to attract 20% tax

• Angel tax abolished, Finance Minister proposes a simpler regime. Finance Minister Nirmala Sitharaman announced that angel tax will be abolished for all investors, and a simpler tax regime will replace it. The angel tax was levied on the capital raised via the issue of shares by unlisted companies from Indian investors if the share price of issued shares exceeded the fair market value of the company. The excess realization was considered income and taxed accordingly. The new proposal aims to simplify the investment regime.

• Precious metals set to become cheaper. Finance Minister Nirmala Sitharaman proposed reducing customs duties on gold and silver to 6 per cent, and on platinum to 6.5 per cent, in the latest budget announcement.

• Fiscal deficit lowered to 4.9% of GDP. Finance Minister Nirmala Sitharaman said India's fiscal deficit was estimated to be 4.9 per cent in FY25, down from 5.6 per cent of GDP in FY24. Market borrowing remains unchanged at Rs 14.13 lakh crore.

  India's fiscal deficit was Rs 16.54 lakh crore in FY24, compared to the budgetary target of Rs 17.86 lakh crore, reaching 95.3 per cent of the budgetary target.

• Medicine and Mobile get cheaper: 3 cancer treatment medicines fully exempt from customs duty; mobile phones, parts, and chargers to be cheaper, announces the Finance Minister.

• Big boost to the space sector. A venture capital fund of ₹ 1000 crore to be set up to encourage space technology development

• Financial relief to flood-hit states. Finance Minister Nirmala Sitharaman acknowledged that Bihar has frequently suffered from floods, noting that plans to build flood control structures in Nepal have yet to progress. The government will provide financial support estimated at Rs 11,500 crore. Assam, which grapples with floods every year, will also receive assistance to tackle the issue, she said. Himachal Pradesh will get government assistance for flood relief and road repairs. Uttarakhand, having suffered losses, will receive government support, and Sikkim will also get assistance from the government.

• Transit-oriented development programs for 14 large cities with a population above 30 lakh will be formulated, says Nirmala Sitharaman. Government to launch scheme to develop 100 street food hubs in select cities over five years.
   
• Big infrastructure push. In a big infrastructure push, Rs 11.11 lakh crore has been allocated for capital expenditure, amounting to 3.4 per cent of India's GDP.
   
• PM Suryaghar Muft Bijli Yojana launched. On the free solar electricity scheme, Finance Minister Nirmala Sitharaman said, "PM Suryaghar Muft Bijli Yojana has been launched to install rooftop solar panels to enable 1 crore households to obtain free electricity up to 300 units each month. This scheme will further encourage it."
   
• Urban housing outlay of ₹10 lakh crore announced. Finance minister Nirmala Sitharaman announced that the housing needs of 1 crore urban poor and middle-class families are to be addressed with an investment of ₹10 lakh crore.
   
• Rental housing for industrial workers with dormitory-type accommodation to be facilitated in PPP mode with VGF support has been announced by the Finance Minister.
   
• Internships for 1 crore youths in 500 top companies to be encouraged. Internship allowance of ₹ 5000 and one-time assistance of ₹ 6,000 to be provided under internship scheme, says Nirmala Sitharaman
   
• Big Boost For Bihar and Andhra Pradesh. Four expressway and bridge projects worth ₹ 26,000 crores for Bihar, says Nirmala Sitharaman. Announces 15,000 crore to be arranged for Andhra Pradesh in FY25 for development of its capital. Comprehensive development of Vishnupad Temple Corridor and Mahabodhi Temple Corridor will be supported.
   
• Model skill loan scheme to be revised to facilitate loans up to ₹ 7.5 lakh with a guarantee from government-promoted funds.
   
• Scheme for first-timers. The Government will provide 1 month's wage to all people newly entering the workforce in all sectors, says Nirmala Sitharaman. Incentive to be provided at specified scale both to employee, and employer in first four years of employment.
   
• Government announces financial support for loans up to Rs 10 lakh for higher education
   
• Job creation in the manufacturing sector. Union Budget 2024 Live Updates: The Finance Minister said that job creation in the manufacturing sector will be incentivized through a scheme linked to the employment of first-time employees. This scheme will provide incentives to both employees and employers concerning EPFO contributions for the first four years of employment. It will benefit 30 lakh youth and cover additional employment in all sectors. The government will reimburse employers up to Rs 3,000 per month for two years towards EPFO contributions for each additional employee. This initiative aims to incentivize the additional employment of 50 lakh people.
   
• Govt's big push on employment-linked skilling. The Finance Minister announced employment-linked skilling through schemes as part of the PM's package. These schemes will be based on enrolment in the EPFO, focusing on recognizing first-time employees. First-timers will receive one month's wage upon entering the workforce in all formal sectors. A direct benefit transfer (DBT) of one month's salary, up to Rs 15,000, will be provided in three installments. The eligibility limit for this benefit will be a salary of Rs 1 lakh per month, and it is expected to benefit 2.1 lakh youths."
   
• Sitharaman on agricultural research. The Finance Minister stated that the government will undertake a comprehensive review of the agricultural research setup to increase productivity and develop climate-resilient varieties. Domain experts will oversee the conduct of this research to ensure its effectiveness and relevance.
   
• Sitharaman unveils 5 schemes on employment, skilling for youth. Finance Minister Nirmala Sitharaman announced a PM Package of five schemes aimed at facilitating employment and skilling, with an allocation of Rs 2 lakh crore. This year, a provision of Rs 1.54 lakh crore has been made for education, employment, and skilling.
   
• Focus on poor, women, youth, and farmers, says Finance Minister. Finance Minister Nirmala Sitharaman said Union Budget 2024 will prioritize the following things: “We need to focus on the poor, women, youth and farmers. For annadata (farmers), we announced higher MSP a month ago for all major crops, delivering on our promise.”
   
• India’s economic growth shining exception amid global headwinds, says Nirmala Sitharaman. Finance Minister Nirmala Sitharaman begins her speech. People have reposed their faith in the government led by PM Modi and re-elected him for a historic third term under his leadership, said Sitharaman. At a time of global uncertainty, India’s economic growth remains the shining exception, she said.