Indian Budget 2024: Key Highlights, Tax Reforms, and Economic Roadmap

The Interim Budget for the fiscal year 2024 has been unveiled, laying out the government’s financial roadmap to address economic challenges and promote sustainable growth. With a focus on economic recovery, infrastructure development, and social welfare, the budget reflects the government’s commitment to steering the nation towards prosperity. It is an interim Budget because 2024 is an election year. The Interim Budget 2024 is focused on youth and women empowerment while maintaining fiscal consolidation and continuing capex while keeping in mind the mantra of “Sabka Sath Sabka Vikas. FM Sitharaman lowered down FY25 fiscal deficit target to 5.1% of the GDP. This Interim budget is specially focused on Economic Recovery and Fiscal Stimulus, Infrastructure Development, Healthcare and Pandemic Preparedness, Education and Skill Development, Social Welfare and Inclusive Growth, Environmental Sustainability, Tax Reforms and Digital Transformation.

Some of the key highlights of the budget are social justice, Garib Kalyan, Desh ka Kalyan, Welfare of ‘Annadata’, and Momentum for Nari Shakti.:

• The Government pulled 25 crore people out of poverty in ten years. She noted that the government provided free food for 80 crore people through various schemes.
• Direct Benefit Transfers of Rs. 34 lakh crore through PM Jan Dhan Yojana accounts has led to savings of ₹2.7 lakh crore.
• The PM Vishwakarma Yojana scheme provides end-to-end support to artisans. The government provided credit assistance to Rs. 78 lakh street vendors under the PM-SVA Nidhi scheme. Rs. 30 crore Mudra Yojana loans disbursed to women entrepreneurs.
• Upskilling and reskilling were a focus for the government, and over 1.4 crore youth were trained under the Skill India Mission. 43 crore loans sanctioned under PM Mudra Yojana. The Government will also expand the ‘Lakhpati Didi’ scheme to empower rural women and boost the rural economy.
• The Government highlighted the role of the India-Middle East-Europe Economic Corridor can play in world trade.
• The Government will pay more attention to developing the East to fuel India’s growth.
• Inflation has moderated and it is within the target band (2%-6%).
• Economic growth has picked up and the average real income of people increased by 50%.
• The Government will subsidise the construction of 30 million affordable houses in rural areas.
• The Centre will encourage cervical cancer vaccination and combine maternal and child health care schemes into one comprehensive program.
• The Ayushman Bharat scheme will be expanded to all ASHA workers, Anganwadi workers and helpers.
• Government to encourage ‘Nano DAP’ for various crops and to expand its use for all agro-climactic zones.
• It will also formulate policies to support dairy farmers and defeat Foot and Mouth Disease.
• The government will formulate a strategy to achieve Atma Nirbharta (self-reliance) for oilseeds. This will cover research for high-yielding varieties, procurement, value addition and crop insurance.
• A new department — Matsya Sampada — to be set up to address the needs of fishermen.
• 40,000 normal rail bogeys will be converted to Vande Bharat standards. Government to enhance safety, convenience, and safety of passengers. Government to focus on metros in a bid to provide transit-oriented development.
• The Government has announced several schemes to turn Net Zero by 2070. This includes providing funding to harness offshore wind energy generation for an initial capacity of 1 Giga Watt, procuring biomass aggregation machinery and expanding the e-vehicle sector by encouraging more manufacturing and charging infrastructure.
• Spends on capital expenditure have been increased to ₹11.11 lakh crore for 2024-25. The Government will continue on path of fiscal consolidation to reduce fiscal deficit to 4.5% in 2025-26.
• The Government proposed to maintain the same tax rates for direct and indirect taxes, including import duties.
• The Government borrowings on a gross and net basis for 2024-25, at Rs. 14.13 lakh crore and Rs. 11.75 lakh crore, respectively, lower than 2023-24.

Tax Reform

Reflecting the government’s commitment to creating a business-friendly environment, promoting ease of compliance, and fostering economic growth the Indian Budget for the fiscal year 2024 has ushered in a new era of tax reform. The main focus of this budget is to simplify and create transparency and fairness in Indian Taxation

• Over the last ten years, the direct tax collections have more than trebled and the return filers swelled to 2.4 times.
• Extension of Tax Benefits for Startups: Tax benefits for startups are extended until March 31, 2025. This move aims to encourage and support the growth of the start-up ecosystem.
• There is No changes in income-tax rates and slabs however under new Tax scheme, there is no tax liability for taxpayers with income up to ₹7 lakh.
• The threshold for presumptive taxation for retail businesses was increased from ₹2 crore to ₹3 crore.
• The threshold for professionals eligible for presumptive taxation was increased from ₹50 lakh to ₹75 Lakh.
• Corporate tax rate was decreased from 30% to 22% for existing domestic companies and to 15% for certain new manufacturing companies.
• To make filing IT return simpler and easier updated income tax returns, a new Form 26AS and prefilling of tax returns has been introduced.
• In the last five years, the main focus was to improve tax-payer services. The age-old jurisdiction-based assessment system was transformed with the introduction of Faceless Assessment and Appeal, thereby imparting greater efficiency, transparency and accountability.
• certain tax benefits to start-ups and investments made by sovereign wealth or pension funds as also tax exemption on certain income of some IFSC units are expiring on March 31, 2024. To provide continuity in taxation, it is propose to extend the date to March 31, 2025.
• Withdrawal of outstanding direct tax demands up to twenty-five thousand rupees (₹25,000) pertaining to the period up to financial year 2009-10 and up to ten-thousand rupees (₹10,000) for financial years 2010-11 to 2014-15. Contact us for Tex Filling https://startbizzindia.com/contact/