Union Budget 2024-25: Key Highlights [Read Bill]

The Union Finance Minister Nirmala Sitharaman has presented the Union Budget for the Financial Year 2024-25, outlining the fiscal roadmap and allocations for the ongoing financial year. Read More: Union Budget 2024: LIVE UPDATES Departing from the traditional ‘bahi-khata’, Sitharaman once again utilized a tablet to deliver a paperless budget. This marks the first full budget of the Modi 3.0 Government and the seventh consecutive budget by the finance minister. Focus on Employment and Skilling The Union Budget 2024-25 places significant emphasis on employment generation and skill development. Sitharaman highlighted nine key priorities, including enhancing productivity and resilience in agriculture, creating employment opportunities, fostering inclusive growth, promoting urban development, ensuring energy security, driving innovation, and implementing next-generation reforms. A notable allocation of Rs. 2 lakh crore has been proposed for a five-year initiative aimed at employment and skilling. Taxation Changes New Tax Regime One of the most significant announcements was the introduction of the new tax regime aimed at providing relief to the salaried class. The key highlights include: Standard Deduction: Rs. 75,000 for the salaried class. Income Tax Rates: - 0 to 3 Lakhs: Nil - 3 to 7 Lakhs: 5% - 7 to 10 Lakhs: 10% - 10 to 12 Lakhs: 15% - 12 to 15 Lakhs: 20% - Above 15 Lakhs: 30% Corporate Tax Changes To attract foreign capital, the budget proposes a reduction in the corporate tax rate on foreign companies from 40% to 35%. This is expected to make India a more competitive destination for international investments. Non-Reporting of Foreign Assets The budget proposes stringent penalties for the non-reporting of foreign assets, aimed at combating tax evasion and ensuring compliance with global tax norms. Abolition of Angel Tax In a bid to foster a more favorable environment for startups, the budget proposes to abolish the controversial Angel Tax. This move is expected to alleviate the tax burden on angel investors and encourage more investments in the startup ecosystem. Safe Harbour Rule The scope of the Safe Harbour Rule for international taxation will be expanded, providing clearer guidelines and reducing disputes in transfer pricing cases. Litigation and Appeals The budget addresses the backlog in tax disputes by proposing the deployment of more officers for the disposal of tax disputes and increasing the monetary limits for tax disputes, aiming for quicker resolution and less litigation. TDS Rates and Procedures Reduction of TDS Rates: For e-commerce operators, the TDS rates will be reduced to 0.5%. Decriminalization of TDS Defaults: A standard operating procedure will be implemented for TDS defaults, aiming for decriminalization and providing a more business-friendly environment. Comprehensive Review of Income Tax Act A comprehensive review of the Income Tax Act is proposed to be completed within six months, aiming to simplify the tax code and make it more taxpayer-friendly. Merging Tax Exemption Regimes The budget proposes merging two tax exemption regimes for charities into one, streamlining the process and reducing administrative burdens for charitable organizations. Customs Duty Adjustments Several changes in customs duties were announced to promote domestic industries and reduce costs for critical sectors: - Removal of Basic Customs Duty (BCD) on certain electronics. - Reduction of customs duties on solar sets and panels, marine products, selected fish products, leather, and textiles. - Elimination of customs duty on three specific medicines. - Reduction of BCD on mobile phones and medical equipment. Support for MSMEs A new mechanism to support MSMEs with continued bank credit during stress periods has been proposed, along with amendments to the Insolvency and Bankruptcy Code (IBC) to expedite insolvency proceedings. Other Notable Announcements - An investment of ₹10 lakh crore to address housing needs for 1 crore urban poor and middle-class families. - Enhancement of stamp duty for properties purchased by women. - Introduction of three new schemes for employment-linked incentives. - Expansion of India Post Payments Bank branches in the North-East region. - Enhancement of Mudra Loans limits to Rs. 20 lakhs. The Union Budget 2024-25, with its comprehensive approach to tax reforms and economic growth, will hopefully set the foundation for a robust and inclusive financial future for India. Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates

Union Budget 2024-25: Key Highlights [Read Bill]

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