Union Budget 2024-2025

- A Budget for Viksit Bharat

A PRESENTATION BY KALRA LAW GROUP

 A Quick Overview:
 The Union Budget 2024, was announced on 23rd July 2024 by the Hon’ble Finance Minister in furtherance to the

interim budget announced on 1st February 2024.

 The Budget was announced with 9 Priorities:

• Productivity and resilience in Agriculture • Energy Security

• Employment & Skilling • Infrastructure

• Inclusive Human Resource Development and Social Justice • Urban Development

• Manufacturing & Services • Innovation, Research & Development

• Next Generation Reforms

 The budget 2024 seems to lay focus on employment generation, infrastructure enhancement and increasing

consumption.

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Key Takeaways-

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Budget Estimates:

• Total receipts – 32.07 lakh crore

• Total expenditure 48.21 lakh crore

• Fiscal deficit – 4.9% of GDP

What become Cheaper?
 Mobile Phones, mobile PCBA & Chargers - Customs Duty reduced to 15%

 Gold and Silver - Customs Duty reduced to 6%

 3 cancer treatment drugs - Exempted from Customs duty

 Critical minerals - Exempted from customs duty

 Brood stocks, shrimps and fish feed - Reduction in basic customs duty to 5%.

 Solar panels, Solar cells & Electric vehicles - Expanded the list of exempted capital goods used in

manufacturing

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What become Costlier?
 Equity investments held for less than one year – Short Term Capital Gain Tax increased to

20% from 15%

 Shares held for more than 12 months – Long term Capital Gain Tax increased to 12.5% from

10%

 Specified telecom equipment - Basic customs duty increased to 15 per cent from 10 per

cent.

 Ammonium nitrate - Customs duty raised to 10 per cent

 Non-biodegradable plastics - Customs duty raised to 25 per cent

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 Capital Expenditure
• INR 26,000 crore allocated for various road projects in Bihar.

• In addition to road projects, the government has plans to establish airports, medical colleges, and sports

infrastructure in Bihar.

• The Centre will also develop a comprehensive plan called 'Purvodaya' to foster all-round development in

Bihar, Jharkhand, West Bengal, Odisha, and Andhra Pradesh.

• The government will support the development of an industrial corridor in the eastern region.

• Government will also arrange INR15,000cr this fiscal and in future years for development of capital city

of Andhra Pradesh.

• Under the PM Awas Yojana, urban housing needs of 1 crore urban poor and middle class families to be

addressed with an investment of 10 lakh crore. Kalra Law Group

Skill Development
• With an allocation of INR 1.48 lakh crore for education, employment and skilling, the Union Budget lays

foundation for a knowledge based growth economy.

• The government is set to launch an internship scheme for 1 crore youths in over 500 top companies

with INR 5000 per month as internship allowance and one-time assistance of INR 6000 .

• Government to provide financial support for loans up to INR 10 lakhs for higher education in domestic

institutions.

• Employment linked incentive schemes announced with a view of formalization of jobs in the country.

These incentives will be based on registration with the EPFO.

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 Boost to MSMEs and Start Ups
• In a welcome announcement for Start Ups, the FM announced the abolishment of angel tax for all classes of

investors in India.

• Credit guarantee scheme for MSMEs to be introduced providing each applicant cover of up to INR 100 crore

while loan amount may be larger.

• Sidbi to open 24 new branches to serve MSMEs clusters

• The FM also announced an increase in the Mudra loan limit to INR 20 lakh from the current INR 10 lakh for

borrowers who have successfully repaid loans under the Tarun category.

 Pradhan Mantri MUDRA Yojana (PMMY) is a scheme launched by the Hon’ble Prime Minster in 2015

to provide loans up to INR 10 lakh to non-corporate, non-farm small/micro enterprises. These loans

are classified as MUDRA loans under PMMY.

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• Turnover threshold of buyers for mandatory onboarding on TReDS platform to be reduced from INR

500cr to INR 250cr.

• Financial support to be provided to 50 multi-product food irradiation units in MSME Sector.

• E-Commerce export hubs to be set up in PPP* mode to enable MSMEs & traditional artisans to sell

their products in international markets.

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 Research and Development
• Research and development in nuclear energy sector is expected to

form a significant part of 'Viksit Bharat’.

• With a view to back up the research and development, the

government will partner with private sector for:

1.) Setting up Bharat Small Reactors;

2.) Research and development of Bharat Small Modular Reactor;

3.) Research and development of newer technologies for nuclear

energy.

• The R&D funding announced the in the interim Budget will be made

available for this sector also.

• Space Economy: A venture capital fund of INR 1000 Cr. To be set up. Kalra Law Group
 Direct Tax Reforms:
Changes in Individual Tax Slab Rates under the new tax regime announced as under:

Annual Income Slab Rates Under Annual Income Slab Rates

(INR) Existing Tax (INR) Under New
structure Tax structure
0 to 3,00,000/- NIL 0 to 3,00,000/- NIL

300,001/- to 600,000/- 5% 300,001/- to 700,000/- 5%

600,001/- to 900,000/- 10% 700,001/- to 10,00,000/- 10%

900,001/- to 12,00,000/- 15% 10,00,001/- to 12,00,000/- 15%

12,00,001/- to 15,00,000/- 20% 12,00,001/- to 15,00,000/- 20%

More than INR 15,00,000/- 30% More than INR 15,00,000/- 30%

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• Delay in payment of TDS upto the due date for filing the TDS return for that period,

decriminalised.

• Standard tax deduction for salaried employees, proposed to be hiked from the present INR

50,000 to INR 75,000.

• Standard deduction out of family pension from enhanced from present INR 15,000 to INR

25,000.

• Exemption limit of capital gain on certain assets increased to INR 1.25 lakhs per year.

• Corporate tax rates for foreign companies reduced from present 40% to 35%.

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• Short Term Capital Gain Tax on Equity investments held for less than one year increased to 20% from 15%.

• Long term Capital Gain Tax on all type of assets held for more than 12 months to be 12.5%.

• Benefit of indexation on sale of property removed.

• Gold investments to attract long term capital gain tax @ 12.5%, holding period to be reduced to 24 months.

• NPS contribution deduction limit for employers in private sector raised from present 10% to 14% of employee’s

basic salary.

• Rate of TDS on house rent payment of more than INR 50,000 per month reduced from present 5% to 2%.

• No re-assessment, or reopening of old ITR beyond 3 years, if income escaped assessment is below INR 50 Lakhs.

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 Indirect Tax Reforms:
• Basic customs duty on gold and silver reduced to 6 % and platinum to 6.4%.

• 3 cancer treatment drugs fully exempted from Customs duty

• Basic customs duty on ferronickel and blister copper exempted.

• Basic Custom Duty on specified telecom equipment increased from present 10% to 15%.

• Customs duty on Ammonium nitrate increased to 10%.

• Customs duty on Non-biodegradable plastics increased to 25%.

• Customs Duty on Mobile Phones, mobile PCBA & Chargers reduced to 15%.

• Further, list of exempted capital goods for use in the manufacture of solar cells and panels in the country to

be expanded.

• BCD on shrimps and fish feed reduced to 5%.

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 From the Author’s desk..
The July 2024 budget lays a comprehensive plan for fostering economic growth, social welfare and sustainable

development.

The budget focuses on long pending issues of employment generation, skill development, security to youth and

reforms in agriculture.

MSMEs and Start Up no doubts had been given due recognition with bold reforms like abolishing of angel tax for all

investors. Changes in personal income tax slabs rates is expected to benefit the general public at large.

The budget 2024, not only reinforces trust for the government’s continued efforts of macro economic management

but also builds up the confidence in the private sector for strengthening the economy, with an aim of a “Viksit

Bharat”.

The stock market however, viewed a significant decline in response to the increased tax rates on capital gains. The

Indian rupee also dropped to a record low against the US dollar to 83.69. Kalra Law Group
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