The first budget of the third term of the National Democratic Alliance (NDA) government, led by Prime Minister Narendra Modi, was presented by Finance Minister Nirmala Sitharaman in July 2024. The budget laid out the roadmap for Viksit Bharat, an ambitious mission to make India a developed nation by 2047, the centenary year of the country’s independence. The roadmap focuses on boosting manufacturing capacity, incentivizing job creation, and improving various social indicators.
However, Budget 2024 had its share of measures that benefitted and hurt the common people. Here’s a quick breakdown:
Relief for Salaried Class
Salaried individuals received several beneficial changes:
- Standard Deduction: The standard deduction was raised from Rs.50,000 to Rs.75,000, benefiting many taxpayers.
- Family Pension Deduction: The deduction on family pension for pensioners increased from Rs.15,000 to Rs.25,000.
- Revised Tax Rate Structure: The tax rate structure was revised to lower tax liabilities, encouraging more salaried individuals to opt for the new tax regime. The new tax changes helped employees save up to Rs.17,500 in income tax.
These revisions made the new tax regime more appealing, allowing many salaried taxpayers to benefit significantly.
Changes in Capital Gains Tax
While some measures aimed at easing consumer expenses, others made transactions more expensive:
- Long-Term Capital Gains Tax: The tax rate on long-term capital gains for both financial and non-financial assets was increased from 10% to 12.5%.
- Capital Gains Exemption Limit: The exemption limit on capital gains was raised to ₹1.25 lakh per year for certain financial assets.
- Short-Term Capital Gains Tax: The rate on short-term capital gains for some financial assets was increased from 15% to 20%.
- Securities Transaction Tax: Taxes on futures and options were raised, impacting traders.
- Buyback of Shares: A proposal to tax income from the buyback of shares in the hands of recipients was introduced.
Reducing Costs for Consumers
The government introduced several measures to make goods and services more affordable for consumers:
- Customs Duty Cuts: Basic customs duties on mobile phones, printed circuit board assembly, and chargers were reduced from 20% to 15%.
- Gold and Silver Duty Cuts: Customs duties on gold and silver were significantly reduced from 14.35%-15% to 6%, while platinum duties were cut from 15.4% to 6.4%.
- Medicines for Cancer Patients: Three essential medicines were made fully exempt from customs duties, benefiting cancer patients who depend on these drugs.
Employment-Linked Incentive Schemes
Budget 2024 also focused on creating jobs and incentivizing businesses to generate employment:
- Direct Benefit Transfer: A salary incentive of Rs.15,000 (disbursed in three installments) was offered to first-time employees.
- Job Creation Incentive for Manufacturing Sector: Employers in the manufacturing sector were offered a four-year incentive for creating jobs, with contributions to the Employees’ Provident Fund (EPFO).
- EPFO Incentives for Employers: Employers across all sectors will receive up to ₹3,000 per month for two years to create additional employment and contribute to EPFO.
These schemes were designed to incentivize businesses to hire more workers and contribute to job creation in various sectors.
Internships for Youth
The government announced a massive internship scheme to support youth employment:
- Internship Opportunities: One crore youth will get internship opportunities in 500 top companies over the next five years. Interns will receive Rs.5,000 monthly allowances and a one-time assistance of Rs.6,000.
This initiative aims to bridge the gap between education and employment by offering real-life business experience to youth.
Affordable Housing Initiatives
Budget 2024 also addressed the need for affordable housing:
- Rental Housing for Industrial Workers: Public-private partnerships will be encouraged to provide dormitory-style rental accommodation for industrial workers.
- Women’s Hostels: New working women’s hostels will be established in collaboration with the industry to ensure more women join the workforce.
- PM Awas Yojna Support: Additional central assistance was provided under the PM Awas Yojna for both urban and rural areas to facilitate affordable housing.
- Lower Stamp Duty for Women: States are encouraged to lower stamp duties for properties bought by women, further promoting women’s empowerment in property ownership.
Pension Scheme and International Asset De-Penalization
The budget also introduced measures to strengthen the New Pension Scheme (NPS):
- NPS Contributions: The budget encourages both employers and employees to contribute more to the NPS.
- Overseas Assets Relaxation: Professionals working with multinational corporations were relieved of penalties for non-reporting of movable assets overseas, as long as the total assets are less than ₹20 lakh.
Conclusion
Budget 2024 came with a mix of measures aimed at benefiting various sectors, from salaried employees and businesses to consumers and vulnerable groups. The tax reliefs and incentives for job creation were notable highlights, while the increased capital gains taxes and changes in customs duties could potentially hurt the common man in some areas. Ultimately, while the budget included several provisions for growth, affordability, and empowerment, the implementation of these schemes will be key to their success in the long run.
