Union Budget 2024: Key Highlights and Economic Changes - ABCD Aditya Birla Capital Digital

The Indian Finance Minister, Mrs. Nirmala Sitharaman , presented the Union Budget 2024 and proposed major changes for the economic development of the country. Focused on 'Viksit Bharat', the budget aims to address key development areas in the country. Let's take a look at the major Budget 2024 highlights and more!

• Union Budget 2024 is the first full budget presented after the elections.
• Budget 2024 has made major proposals for the economic development of India.
• The budget has allocated funds for the promotion of 9 major categories.
• Some of the major allocations have been seen in infrastructure, MSMEs, tourism, defence, space, and employment.

Here are some of the major proposals put forth in Budget 2024 -

Identification of 9 main priorities

The Finance Minister identified nine major areas of development to boost economic growth. These areas are as follows -

• Productivity and Resilience in Agriculture
• Employment and Skilling
• Inclusive Human Resource Development (HRD) and Social Justice
• Manufacturing & Services
• Urban Development
• Energy Security
• Infrastructure
• Innovation and Research and Development
• Next Generation Reforms

Boost in employment opportunities

To promote employment opportunities for the development and upliftment of the Indian youth, the government proposed the following measures -

• The government will bear one month's wage for new entrants in all formal sectors. The maximum wage borne will be limited to ₹15,000 spread out in three installments of ₹5000 each.
• The government will also reimburse employers for the Employees' Provident Fund (EPF) contributions made for new employees. The reimbursement will be limited to ₹3000/month for a period of 2 years.
• Working women hostels and creches will be established with the collaboration of industries to promote more women in the workforce.

Special emphasis on Andhra Pradesh and Bihar

Mentioning special financial packages for Andhra Pradesh and Bihar, the government proposed the following developments -

• A support of ₹15,000 crores for developing the capital of Andhra Pradesh.
• Completion of the Polavaram Irrigation Project, which will ensure food security.
• For Bihar, the government proposed the development of four expressways and bridge projects valued ₹26,000 crores.

Also Read: Budget 2024: What Is a Budget? Why Is It Important?

Boost to MSMEs

Promoting Micro, Small and Medium Enterprises (MSMEs) has always been the government's agenda, and Budget 2024 was no different. Here are some of the proposals for MSMEs -

• Credit Guarantee Scheme to be introduced for MSMEs in the manufacturing sector.
• A new assessment model will be designed for MSME credit.
• Credit support will be provided to MSMEs during the stress period.
• 12 new parks will be set up under the National Industrial Corridor Development Programme.

Housing scheme for all

The budget carried forward the legacy of the Pradhan Mantri Awas Yojana by allocating ₹10 lakh crores. This is to meet the housing needs of 1 crore poor and middle-class families in the urban areas.

Tourism development

Considering tourism an essential part of the culture, Mrs. Nirmala Sitharaman proposed various measures to bolster its development. Here are the proposals -

• Modelled on the premises of the Kashi Vishwanath Temple Corridor, the Mahabodhi Temple Corridor and the Vishnupad Temple Corridor would be developed.
• The comprehensive development of Rajgir will be undertaken.
• Nalanda University to be restored to its ancient glory, and Nalanda to be developed as a tourist spot.
• The development of Odisha tourism has also been proposed.

Introduction of NPS Vatsalya

The budget has introduced a new investment scheme for minors - the National Pension System (NPS) Vatsalya Scheme. Under this scheme, parents or guardians can make contributions to the NPS scheme on the minor's behalf. Once the minor attains adulthood, the scheme will shift to his/her name and work normally.

Bolstering the demand for precious metals

Customs duty on gold, silver, and platinum has been cut down to bolster their demand. The duty on gold and silver has been reduced to 6%, while that on platinum has been reduced to 6.4%.

Changes in capital gains tax

Multiple changes have been proposed under the capital gains tax category. These changes are as follows -

• Short-term capital gains tax on financial assets has been increased to 20% from the previous 15%.
• Long-term capital gains tax on financial and non-financial assets has been increased to 12.5% compared to the 10% taxed earlier.
• The exemption limit on long-term capital gains on financial assets has increased from ₹1 lakh to ₹1.25 lakhs.
• Unlisted bonds, debentures, debt mutual funds , and market-linked debentures are to be taxed at your slab rate.

Changes in Income Tax slab rates

The income tax slab rates under the new tax regime have changed. Here are the revised rates -

Enhanced deductions

If you are a salaried employee, you can claim an enhanced standard deduction in the new tax regime . The limit has been increased to ₹75,000 from the current ₹50,000. Plus, for family pensioners, the deduction limit for family pension has also increased from ₹15,000 to ₹25,000.Deduction for NPS contributions by employers has also increased from 10% to 14%.

Other proposals

Some other notable proposals set forth in the Union Budget 2024 are as follows -

• The 20% Tax Deduction at Source (TDS) applicable on repurchase of units under mutual funds and Unit Trust of India (UTI) has been withdrawn.
• Securities Transaction Tax (STT) on Futures and Options (F&O) has been increased to 0.02% and 0.01% respectively.
• Tax exemption rules on charities will be merged for simplification.
• The Basic Customs Duty (BCD) on mobile phones and chargers to be reduced to 15%.
• The fiscal deficit has been set at 4.9% of the Gross Domestic Product (GDP).
• The government has allocated a CAPEX (capital expenditure) of ₹11.11 lakh crores.
• Flood assistance to be given to Assam, Sikkim and Uttarakhand.
• 100 street food hubs will be set up in select cities.

Benefits for corporates and start-ups

For start-ups, the budget has abolished the concept of angel tax to promote easy funding. For corporates, the tax rate for foreign companies has been reduced to 35% from the previous 40%. Also Read: New to Income Tax? Here’s Everything You Should Know About Tax Deductions

Budget 2024 has outlined various measures to keep the economy growing. It has proposed multiple changes in different sectors. Plus, with the changes in the direct tax regime, your financial planning might be affected. So, it is important to understand the Union Budget 2024 highlights and see how it affects your finances.