Key Highlights of Budget 2024
On July 23, 2024, Finance Minister Nirmala Sitharaman unveiled the Union Budget for the fiscal year 2024-25. This ambitious budget is aimed at spurring economic growth, job creation, and infrastructure development. At Startupportal Business Services, we analyze these changes to help you understand their implications. Here’s a detailed analysis of the major highlights:
Job Creation and Skill Development:
- Employment Initiatives: The budget targets the creation of 4.1 crore jobs over the next five years with an investment of INR 2 lakh crore.
Key initiatives include:
- Skill Development: INR 1.48 lakh crore allocated to train 20 lakh youth and upgrade 1,000 Industrial Training Institutes (ITIs).
- Women Empowerment: Establishment of working women hostels and targeted skill training programs.
- Education Loans: Updated Model Skill Loan Scheme to offer loans up to INR 10 lakh for higher education.
Agriculture and Rural Development:
Agricultural Enhancements:
- High-Yield Crops: Introduction of 109 new crop varieties that are high-yielding and climate-resilient.
- Natural Farming: Support for 1 crore farmers to adopt natural farming methods.
- Shrimp Farming Support: Financial aid through NABARD to boost shrimp farming and exports.
- Cooperative Sector: New policy to strengthen the cooperative sector, indirectly benefiting producer companies by enhancing support and infrastructure for cooperative models.
Support for Manufacturing and Small Businesses:
Financial Support:
- MSME Credit Guarantee Scheme: A new scheme to ease credit access for Micro, Small, and Medium Enterprises (MSMEs) by providing credit guarantees to lenders, encouraging more loans to small businesses.
- Mudra Loans: Loan limits increased to INR 20 lakh for successful borrowers. This boost enables small businesses to access larger amounts of capital for growth and expansion without requiring collateral.
- Industrial Parks: Development of plug-and-play industrial parks and export hubs to attract investment and streamline business operations. These ready-to-use facilities reduce setup time and support efficient business operations.
Urban Development and Housing:
Urban Infrastructure:
- Growth Hubs: Development of urban areas as growth hubs to improve infrastructure and economic opportunities.
- PM Awas Yojana Urban 2.0: INR 10 lakh crore allocated for urban housing to enhance living conditions.
Enhancing Energy Security:
- Energy Transition: Introduction of policies to support renewable energy and reduce fossil fuel dependence.
- Pumped Storage Policy: New policy to improve energy storage solutions and integrate renewable energy.
Building Infrastructure:
- Capital Expenditure: INR 11.11 lakh crore allocated for infrastructure projects to improve connectivity and support economic growth.
- PMGSY Phase IV: Launch of Phase IV to ensure all-weather connectivity to 25,000 rural areas.
Supporting Innovation and Research:
Research and Development:
- Anusandhan National Research Fund: Established to support research and prototype development.
- Space Economy Fund: INR 1,000 crore allocated to promote the growth of the space economy and private sector investment.
New Economic and Land Reforms:
Economic and Land Reforms:
- Economic Reforms Framework: Policy framework to guide future economic reforms for sustainable growth.
- Land Administration Incentives: Incentives for states to improve land administration and urban planning.
Taxation Changes:
Revised Tax Slabs and Rates:
New Tax Regime:
- Rs 0 – 3 Lakh: Nil
- Rs 3 – 7 Lakh: 5%
- Rs 7 – 10 Lakh: 10%
- Rs 10 – 12 Lakh: 15%
- Rs 12 – 15 Lakh: 20%
- Above Rs 15 Lakh: 30%
Capital Gains Tax Changes:
Short-Term Capital Gains (STCG):
- Tax rate on specified financial assets increased from 15% to 20%.
- Other financial and non-financial assets will continue to attract the applicable tax rate.
Long-Term Capital Gains (LTCG):
- Tax rate on all financial and non-financial assets increased from 10% to 12.5%.
- Exemption limit for capital gains on certain listed financial assets increased from ₹1 lakh to ₹1.25 lakh per year.
- Listed financial assets held for more than a year are classified as long-term.
- Unlisted financial assets and all non-financial assets need to be held for at least two years to be classified as long-term.
- Unlisted bonds and debentures, debt mutual funds, and market-linked debentures will attract tax on capital gains at applicable rates, regardless of the holding period.
Investment Incentives:
- Abolition of Angel Tax: Encourages startup investments by removing tax on investments above fair market value.
- Startups: Extended tax exemptions on profits for up to 5 years.
Corporate Tax Reforms:
- Corporate Tax Rate: Reduced from 40% to 35% for foreign companies.
- Digital Services Tax: New tax on revenue from digital services to Indian users.
Other Changes:
- Increased Deduction Limits: Higher deductions for healthcare and education loan repayments.
- Digital Compliance: Expanded ITR e-filing tools and measures for tax transparency.
Conclusion:
The Budget 2024 outlines a comprehensive plan for India’s economic and social development. With its focus on job creation, infrastructure, and innovation, it sets the stage for robust and inclusive growth. For personalized advice on leveraging these budget provisions to achieve your business goals, contact Startupportal Business Services.