Finance Minister Nirmala Sitharaman presented her seventh straight Budget on July 23 for the fiscal 2024-25. This is the first Budget by the BJP-led NDA government since it was re-elected in June. Let us take a look at the major highlights of the union budget 2024-25.
What are the most significant announcements?
During the Budget announcement, Ms. Sitharaman declared that the standard deduction for salaried employees will increase from ₹50,000 to ₹75,000 under the new income tax regime for the financial year 2025. The Union Budget for 2024-25 focuses on nine key areas:
- Productivity and resilience in agriculture
- Employment and skilling
- Inclusive Human resource development and social justice
- Manufacturing and services
- Support for the promotion of MSMEs
- Urban development
- Energy security
- Infrastructure
- Innovation, research, and development
What does the budget mean for markets and investors?
For markets and investors, the Finance Minister has announced an increase in the Securities Transaction Tax for Futures and Options contracts to 0.2% and 0.1%, respectively. This move aims to broaden the tax base and reduce market volatility, addressing concerns shared by SEBI and other market participants.
Budget 2024-2025 in a Nutshell
• The limit of exemption at capital gains proposed at 1.25 lakh a year from 1 lakh a year.
• The Securities Transaction Tax on Futures hiked from 0.0125% to 0.02% and on Options will be hiked from
0.0625% to 0.1%.
• The corporate taxation rate on foreign companies has been reduced to 35% from 40%.
• The limit of LTCG tax is hiked from 10% to 12.5%.
• The STCG tax on certain financial assets will be 20%, rest as per applicable tax rate.
• Listed financial assets held for more than a year and unlisted assets (financial and non-financial) held for more than two years to be classified as long term assets.
• The TDS rate on e-commerce operators to be reduced to 0.1% from 1%.
• The unlisted bonds and debentures, irrespective of the holding period, to attract capital gains tax as per applicable rates
• The abolishment of Angel Tax announced for all classes of investors.
• Under the new tax regime, the standard deduction has been increased to 75,000 from 50,000.
• The deduction on family pension for pensioners to be increased to 25,000 from 15,000.
• The salaried employees will save up to 17,500 in income tax in the new regime with updated tax slabs.
Here’s a comparison between the previous regime and the current one:
• Infrastructure spending will increase to 11.11 lakh crore, which is 3.4% of the GDP.
• There will be 12 Industrial Parks built under the National Industrial Corridor Development Programme.
• Emphasis on expanding the space economy by 5 times in the next 10 years with a venture capital fund of 1,000 Crore.
• Custom Duty on X-ray panels, Mobile Phones & PCBA reduced to 15 percent.
• Precious metals including gold and silver to become cheaper, and customs duty reduced to 6 percent.
Let us now take a look at the major updates to the schemes and allocation to major schemes:
In summary, the Union Budget 2024-25, outlines a series of strategic initiatives and aims to address critical areas such as tax reforms, market stabilization, and broad national priorities, setting a clear roadmap for India’s economic and developmental agenda for the coming year.
