Top Highlights of Union Budget 2024 Powered by HappyWise Financial Services

The Union Budget 2024, presented by Finance Minister Nirmala Sitharaman on July 23rd, 2024, has introduced a slew of changes poised to impact personal finance and sectoral growth significantly. From restructured tax slabs to enhanced support for small businesses, the budget aims to foster economic resilience and inclusivity. Read on to explore the top highlights of Union Budget 2024 and share your thoughts on how these adjustments could shape your financial future and the broader economic landscape.

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New Income Tax Slabs from Union Budget 2024:

Financial Highlights from Union Budget 2024:

Capital Gains Taxes Overhaul: The Budget 2024 proposes a new structure for capital gains taxes with short-term gains taxed at 20% on all financial assets, while long-term gains are taxed at 12.5%. There’s an exemption on profits up to ₹1.25 lakh annually. This change aims to simplify tax computation and encourage long-term investments.

Standard Deduction Increase: The standard deduction has been increased from ₹50,000 to ₹75,000, offering additional relief to salaried taxpayers. This move is expected to increase disposable income and provide some financial relief amidst rising inflation.

Family Pension Deduction: The deduction for family pensions has been increased from ₹15,000 to ₹25,000, benefiting families reliant on pension income. This measure aims to support retired individuals and their dependents by reducing their taxable income.

Angel Tax Abolished: The abolition of the angel tax for all categories of investors is a significant move to encourage startup investments and boost innovation. This tax had previously deterred many investors due to its complexity and potential for disputes.

STT on F&O Increased: The Securities Transaction Tax (STT) on Futures and Options (F&O) has been increased to 0.2%, potentially affecting high-frequency traders. This aims to generate additional revenue while potentially reducing speculative trading activities.

PM Garib Kalyan Ann Yojana Extension: The extension of this scheme for another five years will continue to benefit 80 crore people, ensuring food security. This program plays a crucial role in supporting low-income families by providing essential food grains.

Family-Friendly Housing: The PM Awas Yojana-Urban 2.0 aims to cover 1 crore urban poor and middle-class families, addressing the housing needs comprehensively. This program targets affordable housing and aims to improve living conditions in urban areas.

PM Janjatiya Unnat Gram Abhiyan: This scheme targets improving the socio-economic conditions of tribal communities, benefiting 5 crore people in 63,000 villages. It focuses on enhancing infrastructure, education, and healthcare in tribal areas.

Interest-Free Loans for States: The Budget proposes ₹1.5 lakh crore in long-term interest-free loans to support states in infrastructure development. This funding aims to boost state-level projects and enhance overall economic growth.

Financial Assistance for Veteran Artists: A scheme to provide financial assistance to veteran artists aged 60 and above, with an annual income below ₹72,000. This initiative aims to support artists who have contributed to the cultural heritage of the country.

Urban Housing Assistance: Central assistance of ₹2.2 lakh crore is proposed for urban housing over the next five years, addressing housing needs. This funding aims to support affordable housing projects and improve living conditions in urban areas.

Simplification of FDI Rules: Rules for FDI and overseas investments will be simplified, including promoting the use of the Indian rupee for international transactions. This simplification aims to attract more foreign investments and enhance India’s global economic position.

Capex Spending: Maintained at INR 11.11 lakh crore or 3.4% of GDP
The government has committed to a substantial capital expenditure (Capex) of INR 11.11 lakh crore, maintaining its investment level at 3.4% of GDP. This funding is aimed at infrastructure development, enhancing economic growth, and creating job opportunities across various sectors.

NPS Vatsalya: NPS Vatsalya is a new pension scheme designed to allow parents and guardians to make contributions on behalf of minors. This plan aims to provide a secure financial future for children by encouraging early savings and investment in a pension fund.

New Pension Scheme: A new pension scheme will be formed to address relevant issues, protect common citizens, and maintain fiscal prudence. This scheme aims to provide a balanced solution that ensures the financial security of citizens while being mindful of the government’s fiscal responsibilities.

Education Sector Initiatives from Union Budget 2024

PM’s Package for Employment and Skilling from Union Budget 2024:

• Scheme A: Job Creation Incentive Program (JCIP)

Employers will receive a subsidy equivalent to one month’s wage for each new entrant in all formal sectors, paid in three installments, up to a maximum of ₹15,000. This scheme is expected to benefit 2.1 crore youth, providing them with initial financial support and encouraging companies to hire new employees.

• Scheme B: First-Time Employment Incentive Program (FTEIP)

For first-time employees, the government will cover a portion of the EPFO (Employees’ Provident Fund Organization) contributions for the first four years. The specific scales of incentives will be detailed in the program guidelines, ensuring that both employees and employers benefit from reduced EPFO costs. This scheme is expected to benefit 30 lakh youth, promoting their entry into the formal workforce and reducing the initial burden on employers.

• Scheme C: EPFO Contribution Reimbursement Program (ECRP)

The government will reimburse EPFO contributions for employers, up to ₹3,000 per month, for all new hires for a period of two years. This reimbursement is designed to lower the cost of hiring new employees, making it more attractive for businesses to expand their workforce. This scheme is expected to generate 50 lakh jobs, significantly boosting employment rates and supporting economic growth.

Upgrading Industrial Training Institutes (ITIs): To enhance vocational training, 1000 Industrial Training Institutes (ITIs) will be upgraded to the Hub & Spoke model. This upgrade will align course content and design with the skill requirements of various industries, ensuring that training programs are relevant and effective in meeting industry demands.

Skilling Loan Scheme: A new centrally-sponsored scheme for skilling in collaboration with states and industry aims to skill 20 lakh youth over five years. This scheme will provide financial assistance for training programs, promoting employability.

E-vouchers for Higher Education Loans: E-vouchers for loans up to ₹10 lakh for higher education will be provided directly to 1 lakh students annually, with a 3% interest subvention on the loan amount. This initiative aims to make higher education more accessible and affordable for students from economically weaker sections.

Model Skilling Loan Scheme Revision: The revised Model Skilling Loan Scheme will facilitate loans up to ₹7.5 lakh, aiming to support students in their educational pursuits. This scheme is designed to bridge the financial gap for students seeking vocational and technical training.

E-vouchers for Students: The government will provide e-vouchers to 1 lakh students annually for loans up to ₹10 lakh for higher education, with a 3% interest subvention. This measure aims to make education more accessible and reduce the financial burden on students.

Employment and Skilling Initiatives: The government has allocated ₹2 lakh crore for youth and skill development over the next five years, focusing on creating employment opportunities for 4.1 crore youth. These initiatives aim to equip young people with the skills needed for the evolving job market.

Internships in Top Companies: A new initiative will provide internships to 1 crore youth in 500 top companies over the next five years. Interns will receive a monthly allowance of ₹5000 along with a one-time assistance of ₹6000 funded through CSR contributions. This program aims to offer valuable work experience and support young individuals entering the job market.

Announcement for MSME Sector from Budget 2024:

Mudra Loan Limit Extension: The limit for Mudra loans has been extended to ₹20 lakh from ₹10 lakh, supporting small businesses that have successfully repaid previous loans. This extension is expected to facilitate greater access to credit for micro and small enterprises, promoting entrepreneurship.

MSME Support: SIDBI will open 24 new branches to serve MSME clusters, enhancing support for small and medium enterprises. This expansion aims to improve access to finance and other services for MSMEs, promoting their growth and sustainability.

Credit Guarantee Scheme for MSMEs in Manufacturing Sector: A new credit guarantee scheme will be introduced to assist MSMEs in the manufacturing sector with securing affordable loans. This initiative is designed to support the growth and development of small and medium-sized enterprises by providing easier access to credit.

Credit Support for MSMEs During Stress Period: Additional credit support will be provided to MSMEs during economic stress periods to help them maintain operations and recover. This measure aims to safeguard jobs and ensure the continuity of business operations for small and medium-sized enterprises facing financial difficulties.

MSME Units for Food Irradiation, Quality & Safety Testing: The establishment of MSME units focused on food irradiation, quality, and safety testing will be prioritized. These units will enhance food safety standards by extending the shelf life of products and ensuring their quality.

Initiatives for Supporting Women from Union Budget 2024:

Women in PM Jan Dhan Yojana: Women hold 55.6% of accounts under the PM Jan Dhan Yojana, indicating significant financial inclusion. This initiative has empowered women by providing them with access to banking services and financial literacy programs.

Female Labour Force Participation: The female labour force participation rate has risen to 37% in 2022-2023, reflecting efforts to improve women’s involvement in the workforce. Continued focus on policies promoting gender equality and workplace inclusion is essential.

Working Women Hostels: The government plans to set up hostels for working women to promote their participation in the workforce. These hostels will provide safe and affordable accommodation, enabling more women to seek employment opportunities away from home.

Mudra Yojana and Stand Up India: Under these schemes, 68% of loans and 77.7% of beneficiaries, respectively, are women, highlighting support for women entrepreneurs. These programs aim to promote self-employment and entrepreneurship among women.

Lower Stamp Duties for Women: To promote female homeownership and financial independence, stamp duties for properties purchased by women will be reduced. This measure seeks to encourage more women to invest in property and achieve financial stability.

Other Sectoral Insights from Union Budget 2024:

Fiscal Deficit Reduction: The fiscal deficit is projected to be reduced to 4.9% of GDP, with a target to reach below 4.5% by FY26. This fiscal discipline aims to ensure sustainable economic growth and maintain investor confidence.

Mobile Phones and Chargers Duty Reduction: The Basic Customs Duty (BCD) on mobile phones and chargers has been reduced to 15%, making electronics more affordable. This reduction is expected to boost the electronics manufacturing sector and benefit consumers.

Agriculture Support: ₹1.52 lakh crore has been allocated for agriculture and allied sectors, with initiatives like releasing high-yielding, climate-resilient seeds. This funding aims to enhance agricultural productivity and ensure food security.

Tribal Development Scheme: The Pradhan Mantri Janjatiya Unnat Gram Abhiyan will focus on improving tribal communities’ socio-economic conditions. This scheme aims to provide better infrastructure, healthcare, and education in tribal areas.

Transit Oriented Development: 14 large cities will have Transit Oriented Development plans, promoting sustainable urban growth. This approach integrates land use and transport planning to create more livable and efficient urban environments.

Digital Coverage of Farmland: Digital coverage of farmland and farmers will be implemented to ensure better access to benefits and resources. This initiative aims to improve agricultural efficiency and support farmers through technology.

Plug and Play Industrial Parks: Investment-ready “plug and play” industrial parks will be developed in or near 100 cities to attract investments. These parks will provide ready infrastructure for industries, promoting ease of doing business.

Nuclear Energy: Nuclear energy will play a crucial role in meeting India’s energy requirements, ensuring a diversified energy mix. This focus on nuclear power aims to provide a stable and sustainable energy source for the future.

Debt Recovery Tribunals: Additional debt recovery tribunals will be established to expedite the recovery process and strengthen financial institutions. This measure aims to improve the efficiency of the debt recovery system and support financial stability.

Natural Farming Initiative: 1 crore farmers will be encouraged to adopt natural farming practices, supported by certification and branding. This initiative aims to promote sustainable agriculture and reduce dependency on chemical inputs.

Bio-input Resource Centers: 10,000 bio-input resource centers will be established to support sustainable agricultural practices. These centers will provide farmers with access to bio-inputs and training on eco-friendly farming methods.

PM Vishwakarma Scheme: This scheme aims to support artisans and craftspeople, providing end-to-end assistance for their skills and businesses. It focuses on enhancing the productivity and market reach of traditional artisans.

PM Surya Ghar Muft Bijli Yojana: The scheme generated a significant response with 1.8 crore registrations, aiming to provide free electricity to 1 crore households. This initiative aims to ensure energy access and affordability for low-income families.

Climate Finance Taxonomy: A taxonomy for climate finance will be developed, promoting sustainable investments and green projects. This framework aims to attract funding for climate-friendly initiatives and support the transition to a green economy.

Digitalization of Economy: The Jan Vishwas Bill 2.0 aims to improve the ease of doing business and incentivize states to implement business reforms and digitalization. This bill seeks to create a more business-friendly environment and promote digital transformation.

Space Economy Fund: A venture capital fund of ₹1,000 crore will be set up to support the space economy, fostering innovation and development in this sector. This fund aims to encourage private sector participation and advance India’s space capabilities.

Flood Management Support: Financial backing for flood-affected states like Bihar, Assam, and Himachal Pradesh includes flood control projects and infrastructure. These projects aim to mitigate the impact of floods and protect vulnerable communities.

Land Administration Reforms: Reforms in land administration, urban planning, and building bylaws aim to improve land management in both rural and urban areas. These reforms are expected to streamline land transactions and support urban development.

Pumped Storage Policy for Renewable Energy: A new policy will support pump storage projects to integrate renewable energy into the overall energy mix, ensuring a stable power supply. This policy aims to enhance energy security and support the transition to a low-carbon economy.

Post Payment Bank Expansion: 100 branches to be set up in North East India
To improve financial inclusion in underserved regions, the government plans to establish 100 new branches of India Post Payments Bank in North East India. This expansion will facilitate better access to banking services for remote and rural communities, promoting economic development in the region.

Purvodaya Plan: For the development of Bihar, Jharkhand, West Bengal, Odisha, and Andhra Pradesh
The Purvodaya Plan is a strategic initiative aimed at the all-round development of Eastern India, focusing on states like Bihar, Jharkhand, West Bengal, Odisha, and Andhra Pradesh. This plan will address regional disparities by boosting infrastructure, industry, and social welfare programs to stimulate growth and development.

Anusandhan National Research Fund: For basic research and prototype development
The Anusandhan National Research Fund will be established to support fundamental research and prototype development across various scientific fields. This initiative aims to foster innovation and technological advancement by providing financial backing for research projects and experimental developments.

Shrimp Production & Export: The government has decided to reduce the basic customs duty (BCD) on shrimp and fish feed to 5% to stimulate the shrimp production industry and enhance export competitiveness. This reduction is anticipated to lower the costs of shrimp farming, making it more cost-effective and thereby boosting exports. Financing of Shrimp Farming, processing and export will be facilitated through NABARD.

Simplification of Charities and TDS: The process for charitable donations and tax deduction at source (TDS) will be simplified to encourage more contributions to social causes. This reform aims to improve transparency and ease of compliance, making it easier for donors to contribute to charitable activities.

Exemption of Cancer Medicines: To alleviate the financial burden on families affected by cancer, 3 more cancer medicines will be fully exempt from customs duties. This exemption is intended to make treatment more affordable and accessible for patients.

Reduction in Customs Duty on Gold and Silver: The customs duty on gold and silver will be reduced, making these precious metals more affordable for consumers. This measure aims to stimulate demand and support the jewelry industry.

Exemption for Solar Cell Manufacturing: The budget provides a full exemption from customs duties for more capital goods used in the manufacturing of solar cells and panels. This initiative is designed to promote renewable energy and bolster the domestic solar industry.

Exemption for Crucial Minerals: Custom duties on 25 crucial minerals will be fully exempt, supporting various manufacturing sectors. This exemption aims to reduce production costs and encourage investment in these key industries.

Corporate Tax Rate Reduction: The corporate tax rate will be reduced to enhance India’s attractiveness as a business and investment destination. This reduction is expected to boost corporate profitability and contribute to overall economic growth.

Conclusion

The Union Budget 2024 introduces significant changes and initiatives aimed at enhancing personal finance, supporting various sectors, and driving economic growth. The emphasis on progressive tax reforms, increased allocations for agriculture, infrastructure, and education, and measures to support startups and MSMEs reflect a comprehensive approach to addressing the needs of diverse stakeholders. By focusing on both immediate relief and long-term development, the Budget aims to create a more resilient and inclusive economy.

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Although the new tax slab rates will apply to the next tax filing, it’s crucial to remember that the deadline for ITR Filing 2024 is fast approaching. Navigating the complexities of tax filing can be challenging. If you need expert assistance or find the process overwhelming, check out the details here: 3 Key Changes You Should Know Before ITR Filing 2024