The Hon’ble Finance Minister Smt. Nirmala Sitharaman presented the Union Budget 2024-25 in the Parliament on July 23rd, 2024. The Budget focused on provisioning for the agricultural sector, introduction of employment-linked incentive schemes, loan schemes, financial support to the MSME sector, infrastructural development, and a commitment to reduce the fiscal deficit. In line with the strategy set out in the interim budget, this budget envisages sustained efforts on the following nine (9) priorities for generating ample opportunities for all:
- Productivity and resilience in Agriculture
- Employment & Skilling
- Inclusive Human Resource Development and Social Justice
- Manufacturing & Services
- Urban Development
- Energy Security
- Infrastructure
- Innovation, Research & Development and
- Next Generation Reforms.
Key Takeaways of Budget, 2024:
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1. Review of:
- Income Tax Act
- Customs Duty Rate Structure
- 2. Simplification of Provisions of Litigation and Appeals
- 3. Sector Specific Customs Duty proposals
- 4. Simplification of Charities and TDS
- 5. Deepening Tax base
- 6. Rationalisation of Capital Gains
- 7. Employment and Investment
- 8. Simplification of New Tax Regime
| Detailed Insights |
Comprehensive Review of the following, to be completed over 6 months:
- Income Tax Act, 1961
- Customs Duty Rate structure
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Proposal for changes in Sector Specific Customs Duty:
- Fully exempt 3 more cancer medicines making them affordable
- Reduce Basic Customs Duty on Mobile Phone, Mobile PCBA and Charger benefitting Mobile Industry
- Reduce customs duty on Gold, Silver and Platinum leading to Domestic Value Addition
- Reduce Basic Customs Duty on shrimp and fish feed to enhance competitiveness in marine exports
- Exemption to more capital goods for manufacturing of Solar cells & panels to support energy transition
- Exempt customs duties on 25 critical minerals to boost strategic sectors
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Litigation and Appeals:
- Income Tax Act:
- Reopening of assessment beyond 3 years from the end of the AY only if escaped income is Rs. 50 lakh or more
- Reduction in time limit in search cases, i.e., 6 years before the year of search
- Increase in monetary limits for filing appeals related to direct taxes, excise and service tax in the Tax Tribunals, High Courts and Supreme Court
- Vivad se Vishwas Scheme, 2024, for resolution of income tax disputes pending in appeal
- Central Goods and Services Tax Act
- Common time limit for issuance of demand notices and orders in respect of demands for FY 2024-25
- Reduce maximum amount of Pre-deposit for filing appeals
- Restrict applicability of penal provisions u/s 122(1B) to Electronic Commerce Operators who deduct TCS
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Simplification of Charities and TDS:
- Merger of 2 tax exemption regimes for charities into one
- 5% TDS rate on many payments being merged into 2% TDS
- Withdrawal of 20% TDS rate on repurchase of units by Mutual Funds or UTI
- Reduction of TDS rate on e-commerce operators from 1% to 0.1%
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Deepening Tax Base:
- Increase in Securities Transaction Tax on Futures and options of Securities to 0.02% and 0.1% respectively
- Levy of tax on income received on Buy-back of shares in the hands of the recipient
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Rationalisation of Capital Gains:
- STCG on certain financial assets to attract 20% tax rate
- LTCG on all financial and non-financial assets to attract 12.5% tax rate
- Limit of exemption of CG on certain financial assets increased to Rs. 1.25 lakh per year
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Employment and Investment:
- Abolish Angel Tax for all class of investors
- Simpler tax regime for foreign shipping companies operating domestic cruises in India
- Reduce Corporate Tax rate on foreign companies from 40% to 35%
- Withdrawal of equalisation levy of 2%
- Expansion of tax benefits to certain funds and entities in IFSCs
- Provide for safe harbour rates for foreign mining companies (Selling raw diamonds)
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Simplification of New Tax Regime:
- Standard deduction for salaried employees increased from Rs. 50,000 to Rs. 75,000
- Deduction on family pension for pensioners increased from Rs. 15,000 to Rs. 25,000
- Tax Slab for FY 2024-25:
- Income Rs. 0 to Rs. 3 lakh – NIL
- Income Rs. 3 lakhs to Rs. 7 lakhs – 5%
- Income Rs. 7 lakhs to Rs. 10 lakhs – 10%
- Income Rs. 10 lakhs to Rs. 12 lakhs – 15%
- Income Rs. 12 lakhs to Rs. 15 lakhs – 20%
- Income more than Rs. 15 lakhs – 30%
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Conclusion:
As we embrace the dawn of Budget, 2024, the government sets forth a strategic framework aimed at revitalizing our fiscal landscape through innovative tax proposals. With a steadfast commitment to economic resilience and equitable prosperity, this budget introduces visionary tax incentives designed to foster growth, encourage investment, and bolster our national infrastructure.
Disclaimer
The information provided in this article is intended for general informational purposes only and should not be construed as legal advice. The content of this article is not intended to create and receipt of it does not constitute any relationship. Readers should not act upon this information without seeking professional legal counsel.
