The first budget of the third term of the National Democratic Alliance government, led by Prime Minister Narendra Modi, was presented in July 2024. It 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. This mission involves stepping up manufacturing capacity, providing employers with incentives to create additional jobs, and driving improvements across all social indicators.
The finance minister also announced a slew of tax measures, offering relief to some taxpayers while raising the tax liability for others. Among the most welcome measures was the abolition of the angel tax, giving relief to investors in start-up businesses. Among the more controversial measures was the removal of the indexation benefit on non-movable property while reducing the tax rate.
Here’s a quick look at some measures that benefitted or hurt common people:
Relief for Salaried Class
The finance minister introduced measures to encourage more salaried taxpayers to opt for the new tax regime:
– The standard deduction was raised from ₹50,000 to ₹75,000.
– The deduction on family pension for pensioners was raised from ₹15,000 to ₹25,000.
– The tax rate structure was revised to lower tax liability.
– These changes resulted in salaried employees opting for the new tax regime, saving ₹17,500 in income tax.
Some relief and some pain on transactions
The budget included several announcements on the treatment of capital gains, making certain transactions more expensive:
– Long-term capital gains tax on all financial and non-financial assets was increased from 10% to 12.5%.
– The exemption limit on capital gains was raised to ₹1.25 lakh per year on certain financial assets.
– Short-term capital gains tax on certain financial assets was increased from 15% to 20%.
– Securities transaction tax on futures and options was raised.
– Income on the buyback of shares was proposed to be taxed in the hands of the recipient.
Making goods and services affordable
Customs duties on some goods and services were reduced to provide relief to consumers:
– Three medicines were made fully exempt from customs duties to help cancer patients.
– Basic customs duties on mobile phones, printed circuit board assembly, and chargers were reduced from 20% to 15%.
– Customs duties on gold and silver were sharply reduced from 14.35-15% to 6%, and on platinum from 15.4% to 6.4%.
Employment-linked incentive schemes
The finance minister announced three schemes to encourage businesses to create more jobs in manufacturing and other sectors:
– Direct benefit transfer of one month’s salary, subject to a maximum of ₹15,000, in three instalments to first-time employees.
– Incentive for job creation in the manufacturing sector, to be paid over four years to employers and first-time employees for their contribution to EPFO.
– Reimbursement of up to ₹3,000 per month to employers in all sectors for two years for creating additional employment and contributing to EPFO.
Internship in top companies
A scheme was announced to provide internship opportunities in 500 top companies to one crore youth over five years. Each intern will gain exposure to a real-life business environment for 12 months and receive an allowance of ₹5,000 and one-time assistance of ₹6,000.
Affordable housing for workers, women, and lower-income groups
The government announced multiple schemes to ensure people have a roof over their heads:
– For industrial workers, rental housing with dormitory-type accommodation will be facilitated through public-private partnerships with viability gap funding and commitment from anchor industries.
– To enable more women to participate in the workforce, working women’s hostels will be set up in collaboration with industry.
– Additional central assistance was announced under PM Awas Yojna for urban and rural areas.
– States will be encouraged to lower stamp duty for all, and further lower it for properties bought by women.
The budget also included measures to encourage contributions to the New Pension Scheme by employers and employees. Additionally, it de-penalized non-reporting on movable assets of less than ₹20 lakh held overseas by professionals working with multinational corporations.