Union Budget 2024: Here Are The 10 Major Changes Announced By Finance Minister; Find Speech PDF Here

The Union Budget 2024, presented by Finance Minister Nirmala Sitharaman, outlines a range of significant fiscal policies aimed at driving economic growth and stability. From revisions in tax structures to new incentives for MSMEs, the budget introduces various measures impacting individuals, businesses, and the overall economy. Here's a comprehensive breakdown of the budget highlights:

TDS and TCS Announcements

TDS on Payments to Partners

Payments exceeding Rs 20,000 made by firms to their partners will now attract a TDS of 10%. This measure is aimed at improving tax compliance and ensuring a more equitable distribution of tax burdens among different income groups.

TCS on Notified Luxury Goods

The government has introduced a TCS of 1% on notified luxury goods valued over Rs 10 lakh. This move targets high-value transactions, aiming to curb tax evasion in the luxury segment and generate additional revenue.

TDS on Floating Rate Savings Bonds (FRSB) 2020

Interest income exceeding Rs 10,000 on FRSBs and other notified securities will be subject to TDS. This is intended to streamline tax collection on investment income and enhance compliance.

Revised Income Tax Structure

The revised tax slabs under the new income tax regime are designed to provide significant savings for taxpayers:
Rs 0-3 lakh: Nil
Rs 3-7 lakh: 5%
Rs 7-10 lakh: 10%
Rs 10-12 lakh: 15%
Above Rs 15 lakh: 30%
These revisions are expected to result in an average saving of Rs 17,500 for taxpayers, promoting higher disposable income and consumer spending.

Capital Gain Taxes

Short-Term and Long-Term Capital Gains

The budget revises the short-term capital gain tax on certain financial assets to 20%, while the long-term capital gain tax is set at 12.5%. Additionally, the TDS rate on e-commerce operators will be reduced from 1% to 0.1%, easing the compliance burden on online businesses.

Custom Duties Adjustments

Gold, Silver, and Platinum

Custom duties on gold and silver have been cut to 6%, and platinum to 6.4%. These reductions aim to make precious metals more affordable and stimulate demand in the jewellery sector.

Lithium, Copper, Cobalt, and Manufacturing Inputs

The budget exempts lithium, copper, and cobalt from customs duties, supporting the renewable energy sector. Moreover, customs duties on capital goods used in solar cell manufacturing and connectors will be exempted, fostering growth in the green energy and electronics manufacturing sectors.

Fiscal Deficit and Capex Projections

Fiscal Deficit

The fiscal deficit for FY25 is projected at 4.9% of GDP, down from 5.1% in the interim budget. The government remains committed to reducing the deficit below 4.5% in the subsequent fiscal year.

Capital Expenditure

The capex for FY25 has maintained at Rs 11.11 lakh crore, or 3.4% of GDP, aligning with the government's strategy to boost infrastructure development and economic growth.

MSMEs Support

Bank Credit and Mudra Loans

A new mechanism will facilitate the continuation of bank credit to MSMEs during their stress periods. Additionally, the Mudra loan limit has been increased from Rs 10 lakh to Rs 20 lakh, providing more financial support to small businesses.

E-Commerce and Food Irradiation

E-Commerce Export Hubs will be established in PPP mode, and financial support will be extended to 50 multi-product food irradiation units, enhancing MSMEs' access to international markets and food safety standards.

Skill Development and Education

Model Skill Loan Scheme

The revised Model Skill Loan Scheme will provide loans up to Rs 7.5 lakh with a government guarantee, benefitting 25,000 students annually. E-vouchers for loans up to Rs 10 lakh for higher education will also be provided, aiding 1 lakh students with an annual interest subvention of 3%.

Agriculture Sector Boost

Budget Allocation and Bio Research

A provision of Rs 1.52 lakh crore has been made for the agriculture sector. Additionally, 10,000 bioresearch centres will be established, promoting innovation and sustainable farming practices.

Natural Farming and Kisan Credit Cards

Over the next two years, 1 crore farmers will be supported in adopting natural farming, with branding and certification to ensure market access. New Kisan Credit Cards will be launched in five states.

Employment Linked Incentives

Schemes for Job Creation

Three schemes for employment-linked incentives have been announced:

First-Timers: New employees in the formal sector will receive a direct benefit transfer of one month's salary, up to Rs 15,000.
Manufacturing Sector: Job creation in manufacturing will be incentivized through EPFO-linked schemes, supporting both employees and employers for the first four years.
Employer Support: Employers will be reimbursed up to Rs 3,000 per month for two years for each additional employee, benefiting 2.1 lakh youths.

The budget's focus on reducing the fiscal deficit, maintaining high capex, and providing targeted tax reliefs is likely to foster economic stability and growth. The measures aimed at boosting MSMEs, agriculture, and employment are expected to create jobs, enhance productivity, and stimulate domestic consumption.

The changes in TDS and TCS regulations aim to improve tax compliance and broaden the tax base. The revised tax structure will provide relief to taxpayers while ensuring a steady flow of revenue for the government.

Custom duty reductions and exemptions will lower input costs for key industries like renewable energy, electronics, and manufacturing, promoting competitiveness and investment. The agriculture sector's allocation and initiatives will drive sustainable farming and food security.

The revised Model Skill Loan Scheme and education loans aim to increase access to higher education and skill development, empowering the youth and improving employability. The employment-linked incentives will further support job creation and economic inclusion.

You can find the full budget speech PDF here: