Tuesday, 05 November 2024
Tuesday, 05 November 2024
Nirmala Sitharaman announces revised rate slabs under new tax regime
Standard deduction for those under new regime raised from Rs 50,000 to Rs 75,000.
For zero to Rs 3 lakh - tax rate is zero. For Rs 3 lakh to Rs 7 lakh - 5%; For Rs 7 lakh to Rs 10 lakh - 10%; Rs 10 lakh to Rs 12 lakh - 15%; For Rs 12 lakh to Rs 15 lakh - 20%; For Rs 15 lakh and higher - 30%. With this, a salaried employee stands to save upto Rs 17,500 a year in income tax based on changes, the Finance Minister said.
Long-term capital gains on all financial and non-financial assets
Short-term gains on some financial assets to attract 20% tax. Long-term capital gain on financial, non-financial assets to be taxed at 12.5%. Unlisted bonds, debentures, debt mutual funds, market-linked debentures to be taxed at slab rate.
Cut in customs duty on gold, silver to 6%
Sitharaman proposed reduction in basic customs duty on gold and silver to 6% and platinum to 6.4%.
Presenting Budget for 2024-25, she also announced removal of basic customs duty on ferronickel, blister copper, while increasing the same to 15% from 10% on specified telecom equipment. The reduction in basic customs duty of gold, silver and platinum has been a long pending demand of the gems and jewellery industry.
Sitharaman also proposed reduction in basic customs duty on certain brood stocks, shrimps and fish feed to 5 per cent.
On the other hand, she said the government will raise customs duty on ammonium nitrate to 10% and 25% on non-biodegradable plastics.
She also said e-commerce export hubs will be set up in PPP (public private partnership) mode to enable MSMEs sell their products. Traditional artisans will sell products in international markets, she said. She also proposed expanding the list of exempted capital goods used in manufacturing of solar cells and panels.
Govt slashes import duty on mobile phones, chargers, some components
The government on Tuesday proposed slashing import duty on mobile phones, chargers and some components that are used for manufacturing of handsets in the Union Budget for fiscal year 2024-25.
Finance Minister Nirmala Sitharaman said with a three-fold increase in domestic production and almost 100-fold jump in exports of mobile phones over the last six years, the Indian mobile phone industry has matured.
"In the interest of consumers, I now propose to reduce the BCD (basic customs duty) on mobile phone, mobile PCBA and mobile charger to 15%," Sitharaman said.
Mobile phone industry body ICEA said that the move will enhance export competitiveness of India in the segment.
"We had recommended to reduce BCD on mobile phones, its PCBA and charger/adapter to 15%, which has been accepted. The mobile and electronics industry is elated with the announcements and will go a long way to enhance manufacturing, exports and our competitiveness," ICEA chairman Pankaj Mohindroo said.
Fiscal deficit estimated at 4.9% of GDP
The fiscal deficit for 2024-25 is estimated at 4.9% of GDP.
Presenting the Union Budget for 2024-25, she said the government aims to reach a 4.5% fiscal deficit in 2025-26.
The finance minister said gross and net market borrowing is pegged at Rs 14.01 lakh crore and Rs 11.63 lakh crore, respectively, in FY25.
Net tax receipts are estimated at Rs 25.83 lakh crore in FY25 while the total receipts are pegged at Rs 32.07 lakh crore.
Total expenditure is estimated at Rs 48.21 lakh crore in FY25, she added.
It may be recalled that the interim Budget, presented in February 2024, had pegged fiscal deficit, which is the difference between the government expenditure and income, at 5.1% for FY25 against 5.8% the last fiscal year.
In her speech, Sitharaman also said the government plans to launch 'NPS Vatshalya' to provide pension contributions by parents and guardians.
2 lakh crore allocated to employ 4.1 crore youth over next 5 years
Nirmala Sitharaman in her Budget speech proposed creation of employment of about 4.1 crore youth over the next five years. Towards it, the Finance Minister has made an allocation of ₹2 lakh crore.
Similarly, for skilling the citizens so as to generate job opportunities, she proposed ₹1.48 crore. 20 lakh youth will be skilled over a five-year period. A total of 1,000 industrial training institutes will be upgraded, she announced.
She proposed in her speech that a one-time wage would be provided to all first time employees in all sectors. The incentive for first-timers would be provided through Direct Benefit Transfer (DBT).
The Finance Minister said that the government will launch internship opportunities in 500 companies to one crore youth in five years.
Interns will get exposure to real-life environment and an allowance of ₹5000 per month, she said. The companies will bear training and 10% of training cost from CSR funds. Ms. Sitharaman said employment, skilling, MSME, and middle class are among key focus areas of this Budget.
Govt announces to remove angel tax on startups for all classes of investors
Giving a big relief to startups, the government on Tuesday announced removal of angel tax for all classes of investors to further promote the growth of budding entrepreneurs of the country.
Angel tax refers to the income tax that the government imposes on funding raised by unlisted companies, or startups, if their valuation exceeds the company's fair market value.
"To bolster the Indian startup eco-system, boost the entrepreneurial spirit and support innovation, I propose to abolish the so-called angel tax for all classes of investors," she said.
In September last year, the Income Tax Department notified new angel tax rules that comprise a mechanism to evaluate the shares issued by unlisted startups to investors.
While previously the angel tax -- a tax levied on capital received on the sale of shares of a startup above the fair market value -- applied only to local investors, the Budget for the 2023-24 fiscal year (April 2023 to March 2024) widened its ambit to include foreign investments.
Over 1.17 lakh startups are registered with the government. They are eligible for availing of incentives under the government's Startup India initiative.
Govt to look at lowering duties for properties purchased by women
The government will look at further lowering duties for properties purchased by women and making it an essential component of urban development schemes, Finance Minister Nirmala Sitharaman said on Tuesday.
In her Union Budget speech, Finance Minister Nirmala Sitharaman also proposed to discontinue the quoting of Aadhaar Enrolment ID in place of Aadhaar number with respect to taxation purposes.
"We will encourage states which continue to charge high stamp duty to moderate the rates for all and also consider further lowering duties for properties purchased by women. This reform will be made an essential component of urban development schemes, encourages states with high stamp duty to moderate rates for all, lower duties further for properties purchased by women," she said in the Budget speech.
Sitharaman offers sops to Bihar, Andhra Pradesh
Backward region grant will be provided to 3 districts of Andhra Pradesh, the Finance Minister announced. In her Budget for 2024-25, Finance Minister Nirmala Sitharaman said the Union Government will arrange financial assistance to Bihar through aid from multilateral development agencies.
The government will also set up airports, medical colleges and sports infrastructure in Bihar, she said. The Centre will also formulate plan ‘Purvodaya’ for all-round development of Bihar, Jharkhand, West Bengal, Odisha, and Andhra Pradesh.
Sitharaman further said the government will support industrial corridor for development in the eastern region. The Finance Minister also said the government will provide e-vouchers directly to 1 lakh students every year with interest subvention of 3% of loan amount.
Three medicines fully exempted from custom duty for cancer patients
For customs, we reduced the number of customs duty rates in 2022-23. I propose to rationalise them after a review over next six months, the FM said.
She announced that to provide relief to cancer patients, three more medicines will be fully exempted from customs duty. I propose changes in the basic customs duty on X-ray tubes and flat panel detectors for domestic X-ray machines’ production.
Centre on housing
The government on Tuesday announced central assistance of Rs 2.2 lakh crore over the next five years to meet housing requirement of 1 crore urban poor and middle class families under the Pradhan Mantri Awas Yojana-Urban and proposed interest subsidy to provide loans at affordable rates.
In her Budget speech, Finance Minister Nirmala Sitharaman said, "Under the PM Awas Yojana Urban 2.0, housing needs of 1 crore urban poor and middle-class families will be addressed with an investment of Rs 10 lakh crore." "This will include the central assistance of Rs 2.2 lakh crore in the next 5 years," she added.
The government also plans to provide interest subsidy to facilitate loans at affordable rates, the minister said.
Sitharaman proposed that the government will put in place policies for promoting rental housing markets.
"...enabling policies and regulations for efficient and transparent rental housing markets with enhanced availability will also be put in place," she said.
Further, the minister said the government will facilitate rental housing with dormitory-type accommodation for industrial workers.
This will be done in PPP (public-private partnership) mode with VGF support and commitment from anchor industries.
On tax proposals, Sitharaman proposed that income from letting out of a house or part of the house by the owner, would not be charged under the head 'profits and gains of business or profession' and rather it will be chargeable to tax under the head 'income from house property' only.
Regarding TDS (tax deducted at source) on sale of immovable property, she clarified that "where there is more than one transferor or transferee in respect of an immovable property, then such consideration for transfer of the immovable property shall be the aggregate of the amounts paid or payable by all the transferees to the transferor or all the transferors for transfer of such immovable property".
Sitharaman also proposed amendments to the Prohibition of Benami Property Transactions Act, 1988.
"It is proposed to provide immunity from penalty and prosecution to benamidar on full and true disclosure. It is also proposed to rationalize time limits for attachment of property and reference to adjudicating authority," she said.
Govt to hold consultation with states on land reforms
The government will hold consultations with states on land reforms, Finance Minister Nirmala Sitharaman said on Tuesday.
Presenting the Budget for 2024-25, Sitharaman said that land records in urban areas would be digitised to help improve the finances of urban bodies in the country.
Further, she said that the government will provide support under the Accelerated Irrigation Programme and other sources for projects with an estimated cost of Rs 11,500 crore.
In addition, the Centre will provide assistance to natural disaster-hit states - Himachal Pradesh, Uttarakhand and Sikkim.
The finance minister also said Andhra Pradesh will receive funds to promote industrial development for essential infra like water, power, railways, and roads.
Centre to boost water, waste management in 100 large cities
The Centre along with states and multilateral development banks will promote water supply, sewage treatment and solid waste management projects and services in 100 large cities through bankable projects, Finance Minister Nirmala Sitharaman said on Tuesday.
Presenting the Budget in the Lok Sabha, she said these projects will also envisage use of treated water for irrigation and filling up of tanks in nearby areas.
"In partnership with state governments and multilateral development banks we will promote water supply, sewage treatment and solid waste management projects and services for 100 large cities through bankable projects," she said.
Govt to strengthen insolvency ecosystem, will add more tribunals
The government will add more tribunals of the NCLT to improve recovery of stressed assets, Finance Minister Nirmala Sitharaman while presenting the Union Budget for 2024-25 on Tuesday.
The government will also set up an integrated platform, which will improve the outcome of the Insolvency & Bankruptcy Code (IBC), she said.
"Appropriate changes to IBC, reforms and strengthening of tribunals and appellate tribunals will be initiated to speed insolvency resolution," she said.
Besides "additional tribunals will be established. Of those, some would be notified to decide cases exclusively under the companies act".
IBC has resolved more than 1,000 companies resulting in direct recovery of Rs 3.3 lakh crore to the creditors, she said.
"In addition, 28,000 cases involving over Rs 10 lakh crore have been disposed of even prior to admission," said Sitharaman.
The government will also have an integrated technology platform for the IBC ecosystem.
"An integrated technology platform will be set up for improving the outcome of the IBC for achieving consistency, transparency, timely processing and better oversight for all stakeholders," she said.
Besides, the Budget also proposes for speeding of voluntary closing of limited liability partnerships (LLPs).
"The services of the centre for processing accelerated corporate exit will see pace. It will be extended for voluntary closure of LLPs to reduce the closure time," she said.
NCLT is having benches in 15 cities with a principal bench in Delhi. Besides, it has an appellate tribunal NCLAT, which is having benches in Delhi and Chennai.
Both NCLT and NCLAT have been facing a resource crunch.
Besides, Sitharaman also said steps will be taken for strengthening of debt recovery tribunals.
More tribunals would be set up to speed up recovery, she added.
Rooftop Solar scheme launched
We will bring out a document on appropriate energy transition pathways, that balances the needs of employment and development. In line with the Interim Budget announcement, the Rooftop Solar scheme has been launched to enable 1 crore households to get upto 300 units of free electricity every month. The scheme has seen 1.8 crore registrations and 14 lakh applicants.
Sitharaman on productivity and resilience in agriculture
One crore farmers to be shifted to ‘natural farming’. Kisan credit cards in five states. Rs 1.5 lakh crore for agriculture, allied sectors.
“Transforming agricultural research, our govt will undertake a comprehensive review of the agricultural research setup to bring the focus on raising productivity and developing climate-resilient varieties. Funding will be provided in challenge mode including to the pvt sector, domain experts both from the govt and outside and will oversee the conduct of such research,” Ms. Sitharaman said.
She added that 109 new high-yielding and climate-resilient varieties of 32 field and horticultural crops will be released for cultivation by farmers.
Centre on Tourism
Government to support development of Nalanda as tourism destination. Comprehensive development of Vishnupad and Mahabodhi temple corridors. Government to provide support to Odisha to develop tourism destinations.
FM proposes hike in STT on F&Os to discourage retail participation
Sithraman proposed to increase the rate of securities transaction tax (STT) on futures and options (F&O) trade to discourage retail investors' participation in the risky instrument.
"It is proposed to increase the rates of STT on the sale of an option in securities from 0.0625 per cent to 0.1 per cent of the option premium, and on sale of a futures in securities from 0.0125 per cent to 0.02 per cent of the price at which such futures are traded," she said in the Union Budget speech.
This came after the Economic Survey flagged concerns over rising retail investors' interest in derivative trading. The survey stated that speculative trade has no place in a developing country.
It also pointed out that the sharp increase in retail investor participation in F&O trading is likely driven by humans' gambling instincts.
"Derivatives trading holds the potential for outsized gains. Thus, it caters to humans' gambling instincts and can augment income if profitable. These considerations are likely driving active retail participation in derivatives trading," according to the Economic Survey 2023-24.
At the same time, the average daily turnover in the equity cash segment was Rs 1 lakh crore, while the F&O segment saw an average daily turnover of about Rs 330 lakh crore.
