Budget 2024 Highlights: Key Revisions in the New Tax Regime by FM Nirmala Sitharaman

The Union Budget 2024, presented by Finance Minister Nirmala Sitharaman, has introduced significant revisions aimed at simplifying the tax regime and promoting economic growth. In this blog post, we will delve into the key highlights of the budget and their implications for investors and taxpayers.

Budget 2024 Key Highlights : Budget expenditure on major sectors

Budget 2024 Key Highlights Live: Here are budget expenditure on major sectors:

Defence – ₹4,54,773 crore
Rural Development – ₹2,65,808 crore
Agriculture and Allied Activities – ₹1,51,851 crore
Home Affairs – ₹1,50,983 crore
Education – 1,25,638 crore
IT and Telecom – ₹1,16,342 crore
Health – ₹89,287 crore
Energy – ₹68,769 crore
Social Welfare – ₹56,501 crore
Commerce & Industry – ₹47,559 crore

Budget 2024 Key Highlights Live: Other key proposals on taxes

Abolish Angel tax for all classes of investors
Simpler tax regime to operate domestic cruise
Provide for safe harbour rates for foreign mining companies (Selling raw diamonds)
Corporate tax rate on foreign companies reduced from 40% to 35%

Budget 2024 Key Highlights Live: Budget Estimates 2024-25

Budget 2024 Key Highlights Live: Here are the Budget Estimates 2024-25:

FY25 Total Receipts estimated at ₹32.07 lakh crore
FY25 Total Expenditure estimated at ₹48.21 lakh crore
Net tax receipts estimated at ₹25.83 lakh crore
Gross market borrowings estimated at ₹14.01 lakh crore
Net market borrowings estimated at ₹11.63 lakh crore
FY25 Fiscal deficit estimated at 4.9% of GDP

The fiscal consolidation path announced by me in 2021 has served our economy very well, and we aim to reach a deficit below 4.5% next year. The Government is committed to staying the course. From 2026-27 onwards, our endeavour will be to keep the fiscal deficit each year such that the Central Government debt will be on a declining path as percentage of GDP, Finance Minister Nirmala Sitharaman said.

Budget 2024 Key Highlights Live: Changes in sector specific customs duty

Budget 2024 Key Highlights Live: Here are the changes in sector specific customs duty announced in the Budget 2024:

Basic Custom Duty (BCD) on mobile phone, mobile PCBA and mobile charger cut to 15%.
Customs duties on 25 critical minerals for sectors like nuclear energy, renewable energy, space, defence, telecommunications, and high-tech electronics are made fully exempt and reduce BCD on two of them.
BCD on certain broodstock, polychaete worms, shrimp and fish feed reduced to 5 %.
Customs duty on various inputs for manufacture of shrimp and fish feed has been exempted.
BCD on real down filling material from duck or goose reduced
Customs duties on gold and silver reduced to 6% and that on platinum to 6.4%.
BCD on ferro nickel and blister copper removed
BCD on oxygen free copper for manufacture of resistors removed
BCD on ammonium nitrate reduced from 7.5% to 10%
To promote domestic aviation and boat & ship MRO, the period for export of goods imported for repairs has been extended from 6 months to 1 year.

Budget 2024 Key Highlights Live: Tax on share buyback, STT on F&O

Budget 2024 Key Highlights Live: Taxes announced on Buy-back of shares and Securities transaction tax (STT) rates on F&O transactions

Buy-back of shares

Budget 2024 proposed that the income from buy-back of shares by companies be chargeable in the hands of the recipient investor as dividend, instead of the current regime of additional income-tax in the hands of the company. Further, the cost of such shares shall be treated as a capital loss to the investor.

Securities transaction tax (STT) rates

It is proposed to increase the rates of STT on sale of an option in securities from 0.0625% to 0.1% of the option premium, and on sale of a futures in securities from 0.0125% to 0.02% of the price at which such futures are traded.

Budget 2024 Key Highlights Live: Cut in income tax for foreign companies

The Budget 2024 introduces measures to support Small and Medium Enterprises (SMEs), which are the backbone of the Indian economy. These include easier access to credit, tax reliefs, and simplified regulatory processes. By fostering a conducive environment for SMEs, the government aims to boost employment and economic diversification. Investors may find lucrative opportunities in the SME sector, which is poised for growth.

Budget 2024 Key Highlights Live: Incentives to IFSC

Budget 2024 Key Highlights Live: FM Sitharaman announced certain incentives to IFSC. Here are those:

Retail schemes and Exchange Traded Funds in IFSC, shall enjoy tax exemptions along similar lines as available to specified funds.
Exemption of certain income of Core Settlement Guarantee Fund set up in IFSC.
Exclusion of the applicability of section 94B to certain finance companies located in IFSC.
Where a venture capital fund (VCF) located in IFSC extends a loan / other amount to an assessee, it shall no longer be called upon to explain the source of funds.
Surcharge shall not apply on income-tax payable on income from securities by specified funds.

Budget 2024 Key Highlights Live: Changes in Capital Gains Taxes

Budget 2024 Key Highlights Live: The taxation of capital gains is proposed to be rationalised and simplified, FM Sitharaman said.

Short term gains tax on specified financial assets raised to 20% from 15%, while that on all other financial assets and non-financial assets shall continue to attract the applicable tax rate.
Long term gains tax on all financial and non-financial assets raised to 12.5%. It is proposed to increase the limit of exemption of capital gains on certain listed financial assets from ₹1 lakh to ₹1.25 lakh per year.
Listed financial assets held for more than a year will be classified as long term, while unlisted financial assets and all non-financial assets will have 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, irrespective of holding period, will attract tax on capital gains at applicable rates.

Budget 2024 Key Highlights Live: Announcements on TDS and TCS

Budget 2024 Key Highlights Live: Here are some of the announcements on TDS and TCS:

TDS on payment to a partner

Payments made by a firm to its partner shall be subject to TDS at 10% for aggregate amounts more than ₹20,000 in a financial year.

TCS on notified luxury goods

Levy TCS of 1% on notified goods of value exceeding 10 lakh rupees.

TDS on Floating Rate Savings (Taxable) Bonds (FRSB) 2020

TDS is proposed on interest exceeding ₹10,000 on Floating Rate Savings (Taxable) Bonds (FRSB) 2020 or any other notified security of the Central or State Governments

Budget 2024 Key Highlights Live: Tax rate structure revised in new regime

Budget 2024 Key Highlights Live: FM Sitharaman revises tax rate structure in the new income Tax regime. The revised tax slabs will result in ₹17,500 saving in income tax, Sitharaman said. Here’s the revised tax structure:

₹0-3 lakh – Nil
₹3-7 lakh – 5%
₹7-10 lakh – 10%
₹10-12 lakh – 15%
₹15 lakh and above – 30%

Conclusion

The Union Budget 2024, with its focus on tax reforms, investment in infrastructure, support for SMEs, and emphasis on technology and sustainability, presents a comprehensive plan for India’s economic growth. For investors, these measures open up a myriad of opportunities across various sectors. As always, it is essential to stay informed and consider these developments when making investment decisions.

At 4R Investments, we are committed to helping you navigate these changes and make informed investment choices. Stay tuned for more updates and insights on how the Budget 2024 can impact your investment strategy.

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