Budget Highlights 2024: PDF Download, Key Takeaways, Important Details

Budget Highlights 2024 Budget Day is a highly anticipated occasion in India, eagerly awaited by both businesses and the general public to learn about the potential benefits from the schemes and initiatives presented. This year, due to the upcoming elections, Budget 2024 has been replaced by an Interim Budget. Nonetheless, the esteemed Finance Minister, Smt. Nirmala Sitharaman, has successfully introduced schemes and advantages, much to the satisfaction of the public. On February 1, 2024, the FM announced that the theme for this year’s Budget is “Viksit Bharat Budget 2024,” emphasizing the country’s commitment to Atmanirbhar Bharat. The Interim Budget 2024 will prioritize the welfare and aspirations of the Gareeb (poor), Mahila (women), Yuva (youth), and Annadata (farmers). An official announcement has been made for Budget 2024, with the Union Budget 2024 scheduled for July 23 as approved by President Droupadi Murmu.

Interim Budget 2024 Direct Tax Proposals

  • The Finance Minister has announced that the current tax rates will be maintained in FY 2024-25 for direct taxes. Individuals earning up to Rs.7 lakh will not have any tax obligations under the new tax system. Existing domestic companies will be subject to a 22% corporate tax rate, while certain new manufacturing companies will face a 15% tax rate.
  • The Finance Minister also revealed that direct tax collections have more than tripled in the past decade, with the number of tax return filers increasing by 2.4 times.
  • Conversely, the average processing time for tax returns has decreased from 93 days in 2013-14 to 10 days in 2023-24.
  • Furthermore, the Finance Minister has suggested an extension of the deadline for specific tax benefits for start-ups and investments by sovereign wealth/pension funds, as well as a tax exemption for designated IFSC units set to expire on March 31, 2024, which has now been extended until March 31, 2025.

Interim Budget 2024 Goods & Services Tax

  • The Finance Minister declared that the average monthly gross GST collection has increased twofold to Rs.1.66 lakh crore in FY24.
  • State revenue tax buoyancy rose from 0.72 during 2012-16 to 1.22 in the period following GST implementation from 2017-23.
  • The FM stated that the existing customs rates, which include import duties, will be maintained in FY 2024-25.

Interim Budget 2024 Roadmap for Viksit Bharat 2047

The Budget for this year embraced the Viksit Bharat theme, aiming for a progressed India by 2047. ‘Garib’ (Poor), ‘Mahilayen’ (Women), ‘Yuva’ (Youth), and ‘Annadata’ (Farmers) form the foundation of the Viksit Bharat Budget 2024. With a focus on inclusive development centered around the people, the Finance Minister revealed –

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  • Substantial advancements in physical, digital, and social infrastructure are anticipated.
  • The implementation of Digital Public Infrastructure (DPI) will encourage formalization and financial inclusivity.
  • The government aims to expand and enhance the tax collection through GST.
  • Improvements in the financial sector will restore savings, credit, and investment activities.
  • The establishment of a robust gateway, named GIFT IFSC, will facilitate global capital and financial services for the economy.
  • Proactive measures will be taken for managing inflation effectively.

Garib Kalyan and Desh ka Kalyan

  • Direct Benefit Transfer (DBT) has led to savings of Rs. 2.7 lakh crore.
  • 25 crore people have moved out of multidimensional poverty.
  • Credit assistance has been given to 78 lakh street vendors under PM-SVANidhi.

Empowering the Youth

  • 1.4 crore youth have been trained under the Skill India Mission.
  • Fostering entrepreneurial aspirations of youth – 43 crore loans have been sanctioned under the PM Mudra Yojana.
  • A corpus of Rs.1 lakh crore to fund tech-savvy youth with a 50-year, interest-free loan at low or nil interest rates charge to provide financing/re-financing.

Welfare of Farmers (Annadata)

  • There has been direct financial assistance provided to 11.8 crore farmers under PM-KISAN.
  • Crop Insurance has been given to 4 crore farmers under PM Fasal Bima Yojana.
  • There has been an integration of 1,361 mandis under eNAM, supporting trading volume of Rs.3 lakh crore.

Nari Shakti

  • 30 crore Mudra Yojana loans have been disbursed to women entrepreneurs.
  • There has been an increase in female enrollment in higher education by 28 per cent in the past 10 years.
  • There is 43% of female enrolment in STEM courses
  • One crore women are assisted by 83 lakh SHGs to become Lakhpati Didis.

Interim Budget 2024 Strategy Shift for Amrit Kaal as Kartavya Kaal

The Finance Minister emphasized the importance of sustainable development by committing to achieve ‘Net Zero’ by 2070 within the Amrit Kaal framework. As part of this initiative, the FM suggested the following measures:

  • Providing viability gap funding for harnessing offshore wind energy with an initial capacity of one gigawatt.
  • Establishing coal gasification and liquefaction capacity of 100 million tonnes by 2030.
  • Implementing phased mandatory blending of CNG, PNG, and compressed biogas for household use.
  • Offering financial support for the acquisition of biomass aggregation machinery.
  • Moreover, there will be a focus on rooftop solar installations, allowing one crore households to receive up to 300 units of free electricity monthly.
  • The government also plans to introduce e-buses for public transportation and enhance the electric vehicle ecosystem by promoting manufacturing and charging infrastructure.
  • A new scheme for biomanufacturing and bio-foundry will be introduced to encourage eco-friendly alternatives. Additionally, 1.3 crore LED street lights will be installed through the SNLP scheme, and the Blue Economy 2.0 scheme will be launched to enhance coastal aquaculture and mariculture practices.

Infrastructure & Investment

The government intends to introduce three main railway corridor projects: energy, minerals, and cement corridor, port connectivity corridor, and high traffic density corridor as part of the PM Gati Shakti initiative. This will enhance logistics effectiveness and lower expenses. Foreign investment will be encouraged through bilateral investment agreements that will be discussed. The current airports will be expanded, and new airports will be comprehensively developed through the UDAN scheme. Urban revitalization will take place through the Metro rail and NaMo Bharat initiatives.

Inclusive Development

The FM emphasized the importance of inclusive development during Amrit Kaal, introducing an aspirational District Programme to aid states in accelerating development, particularly in employment creation. The government is actively promoting cervical cancer vaccination for girls aged 9-14. The Saksham Anganwadi and Poshan 2.0 scheme will facilitate the enhancement of Anganwadi centers to enhance nutrition delivery, early childhood care, and development. A U-WIN platform will be launched to support the immunization efforts of Mission Indradhanush. Health coverage under the Ayushman Bharat scheme will be expanded to include all ASHA, Anganwadi workers, and helpers. A committee will be established to examine the challenges encountered in establishing additional medical colleges in India.

Housing

  • The Pradhan Mantri Awas Yojana (Grameen) is on track to reach the goal of 3 crore houses, with an extra 2 crore houses planned for the following 5 years.
  • A housing scheme will be introduced to promote home ownership among the middle class.

Tourism

  • States will be urged to establish iconic tourist destinations to draw in business and support local entrepreneurship by providing long-term interest-free loans.
  • Initiatives for enhancing port connectivity, tourism infrastructure, and facilities in islands like Lakshadweep will also be initiated.

Agriculture & Food Processing

  • The government will encourage investment in post-harvest activities, both in private and public sectors.
  • The use of Nano-DAP will be extended to all agro-climatic zones.
  • A strategy called Atmanirbhar Oilseeds Abhiyan will be devised to attain self-reliance in oilseeds.
  • A detailed plan for dairy development will be created.
  • Efforts will be intensified to implement the Pradhan Mantri Matsya Sampada Yojana to boost aquaculture productivity, increase exports, and create more job opportunities.
  • Additionally, five integrated aquaparks will be established.

Interim Budget 2024 Allocations for Various Ministries & Schemes

Proposed allocations for different ministries under the Interim Budget 2024 are as follows:

Ministry

INR (in lakh crore)

Ministry of Defence

6.2

Ministry of Road Transport and Highways

2.78

Ministry of Railways

2.55

Ministry of Consumer Affairs, Food & Public Distribution

2.13

Ministry of Home Affairs

2.03

Ministry of Rural Development

1.77

Ministry of Chemicals and Fertilisers

1.68

Ministry of Communications

1.37

Ministry of Agriculture and Farmers’ Welfare 

1.27

Proposed allocations for major schemes in force under the Interim Budget 2024 are as follows:

  • Mahatma Gandhi National Rural Employment Guarantee Scheme: Rs.86,000 crore
  • Ayushman Bharat-PMJAY: Rs.7,500 crore
  • Production Linked Incentive Scheme: Rs.6,200 crore
  • Modified Programme for Development of Semiconductors and display manufacturing ecosystem: Rs.6,903 crore
  • Solar Power (Grid): Rs.8,500 crore
  • National Green Hydrogen Mission: Rs.600 crore

Interim Budget vs. Full Budget 2024

To begin with, it is important to grasp the variance between an Interim Budget and a Full Budget. An Interim Budget serves as a temporary financial outline that fills the gap until a new government is established, unlike a comprehensive budget that spans the entire fiscal year. It primarily concentrates on regular expenditures and existing programs, hence major policy alterations or tax reforms are typically not included.

Election Code and Fiscal Prudence

The code of conduct by the Election Commission of India prohibits the ruling party from making populist announcements or implementing major policy changes in an election year. Therefore, although the interim budget will provide a comprehensive overview of India’s finances, extravagant displays should not be anticipated.

Vote on Account: Keeping the Engine Running:

One vital component of the interim budget is the “Vote on Account,” which permits the government to access funds from the treasury for necessary expenditures such as salaries, debt payments, and current initiatives, guaranteeing seamless administrative operations until the new government assumes office.

Budget Expectations 2024

Finance Minister Nirmala Sitharaman has tempered expectations by announcing that the upcoming February budget will prioritize essential spending to sustain operations until the elections, minimizing policy adjustments. Still, there are anticipated aspects for Budget 2024.

Relaxation in ESOP taxation:

Startups are incentivizing employees with ESOPs to encourage their participation in startups. The anticipation is that numerous startups will become publicly traded this year. Therefore, it would benefit startups if the government creates ESOP taxation regulations that are favorable to employees. Additionally, this action would aid in increasing job opportunities in startups.

Increase in limit of home loan interest:

Currently, the maximum deduction allowed for interest repayment on a loan used to purchase a self-occupied property is Rs 2,00,000. This restriction can hinder potential property buyers. Property prices have risen notably in many cities, leading to higher interest payments on home loans. Therefore, the Rs 2,00,000 limit needs to be reviewed.

Allowing home loan interest under the new tax regime:

The new tax system permits the deduction of interest paid on a home loan for rented-out properties but does not allow the same for self-occupied properties. It is anticipated that including home loan interest repayment in the new tax system will motivate home buyers and enhance the acceptance of the new tax rules.

Increase the limit of 80D deduction:

The limit for Sec 80D should be raised from 25,000 to 50,000 for regular individuals and from 50,000 to 75,000 for senior citizens due to the regular increase in premium amounts.

Inclusion of 80D in the new tax regime:

Given that medical insurance is essential at present, permitting medical insurance premiums as a deduction under the new tax system will enhance coverage and boost the acceptance of the new tax system.

Bengaluru’s listing as a metro city for HRA Exemption:

Bengaluru is considered a metro city constitutionally but is classified as a non-metro for income tax purposes, limiting HRA deductions to 40% compared to other metro cities. There is a call to raise it to 50%.

On the Indirect tax front

Option to revise GST returns: 

Errors in filed returns can only be corrected in future return periods. Allowing a revision of returns would benefit both taxpayers and the department by reducing the volume of notices and communications significantly. The GSTN is making efforts in this direction, with more information becoming available upon the release of APIs by the government.

e-Invoicing for B2C transactions:  

Expanding this rule to B2C transactions would enhance tax evasion prevention and promote better adherence. Nevertheless, this could lead to heightened compliance responsibilities for companies, particularly smaller ones, necessitating technological enhancements to meet these criteria.

Interim Budget Highlights 2024

The 2024 interim budget may not revolutionize the landscape, but it offers important indications about the nation’s economic status and upcoming objectives. Grasping the budget’s emphasis and trajectory is beneficial for businesses and individuals as it aids in strategic decision-making. It’s crucial to note that the interim budget is not conclusive. The complete budget for FY 2024-25 will be introduced post-elections, showcasing the new government’s aspirations and strategies. Stay alert for India’s economic narrative’s subsequent installment!

Major Announcements

Income Tax:

  • The new tax regime is now the default option, while the old regime remains accessible.
  • Under the new regime, there is no tax on income up to Rs 7.5 lakh due to Rebate + Standard Deduction.
  • The highest surcharge rate has been decreased from 37% to 25% in the new regime.
  • The new income tax slabs are as follows: 0-3 lakh (nil), 3-6 lakh (5%), 6-9 lakh (10%), 9-12 lakh (15%), 12-15 lakh (20%), 15 lakh and above (30%).

Railways:

  • Highest ever allocation: Rs 2.4 lakh crore.
  • 75 Vande Bharat trains to be rolled out by August 2023.

Capital Expenditure:

  • Increased by 33% to Rs 10 lakh crore.
  • To boost growth, job creation, and attract private investment.

Defence:

  • Budget increased by 13% to Rs 5.94 lakh crore.
  • Focus on acquiring new weapons, aircraft, and warships.

Other Key Points:

  • Fiscal deficit target: below 4.5% by 2025-26.
  • Increased allocation for MSMEs, agriculture, education, healthcare, housing, and urban development.
  • Measures to promote ease of doing business and digital services.
  • Free food grain scheme extended till 2024.

FAQs

Will the tax slab change in 2024?

In the Interim Budget 2024, the Finance Minister stated that the current tax rates for direct taxes will continue in the FY 2024-25. Under the new tax system, individuals earning up to Rs.7 lakh will not have any tax obligations.

When will the budget 2024 session begin and end?

President Droupadi Murmu has given approval to present the Union budget for 2024 in Parliament from July 22nd to August 12th, 2024.

Is there any change in tax slab in Budget 2024?

The tax slabs remain unchanged as per the FM’s announcement in the Interim Budget 2024.

Is the final budget of 2024 has been presented?

The final budget for 2024 has not been revealed as of now. It is expected to be presented on July 23.

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