Union Budget: FM Nirmala Sitharaman announces revised tax rate slabs

New Delhi, Jul 23: Finance minister Nirmala Sitharaman presented her record seventh consecutive Union Budget 2024-25 on Tuesda July 23, during the Budget Session of Parliament. In her announcement, she introduced increased standard deductions and revised tax rates for salaried individuals under the new tax regime. Additionally, she announced cuts on customs duties on gold, silver, mobile phones, and other goods. 

The revised tax rate under the new tax regime is as follows: for incomes ranging from Rs 0-3 lac, there is no tax; for Rs 3-7 lac, the tax rate is 5%; for Rs 7-10 lac, it is 10%; for Rs 10-12 lac, it is 15%; for Rs 12-15 lac, it is 20%; and for incomes above Rs 15 lac, the tax rate is 30%. 

The Centre's FY25 Capex spend is projected at Rs 11.1 lac crore, unchanged from the Interim Budget, with infrastructure spending at 3.4% of GDP. 

The budget outlines five schemes focusing on 4.1 crore youth over five years, with a central outlay of Rs 2 lac crore. It includes a comprehensive internship scheme for one crore youth in top companies over five years, employment-linked incentives such as one month's wage support for first-time employees, and women-specific skilling programmes to increase workforce participation. 

Special attention is given to MSMEs and the manufacturing sector, with a credit guarantee scheme and term loans for machinery purchases. A technology support package for MSMEs and the opening of 24 new SIDBI branches to serve MSME clusters are also included. 

The Mudra loan limit is increased from Rs 10 lac to Rs 20 lac for previous borrowers, and financial support for higher education loans up to Rs 10 lac in domestic institutions is provided. An integrated technology system for the Insolvency and Bankruptcy Code (IBC) is also introduced. 

A provision of Rs 2.66 lac crore is allocated for rural development. The transformation of agricultural research focuses on productivity and climate-resilient crop varieties, with an initiative to introduce one crore farmers to natural farming over two years. 

The budget includes rental housing in PPP mode for industrial workers and special financial support of Rs 15,000 crore for Andhra Pradesh. New airports, medical facilities, and sports infrastructure are planned for Bihar. 

Inflation is moving towards a 4% target, with India's economic growth described as a ‘shining exception’. The budget focuses on job creation and boosting consumption, potentially benefiting the consumer goods, real estate, and auto sectors. 

The budget outlines nine priority areas: Agriculture, Employment, Inclusive Development, Manufacturing and Services, Urban Development, Energy, Infrastructure, Innovation and R&D, and Next Generation Reforms. Over Rs 3 lac crore is allocated for schemes benefiting women and girls. The PMGKAY (Pradhan Mantri Garib Kalyan Anna Yojana) is extended for five years, benefiting over 80 crore people. 

Development of Digital Public Infrastructure (DPI) applications for credit, e-commerce, law and justice, and corporate governance is emphasized in the budget. 

Sitharaman also announced several significant changes and initiatives during her address. She revealed plans for a comprehensive review of the customs duty structure over the next six months and stated that the TDS rate on e-commerce will be reduced to 0.1%. Additionally, she proposed merging two tax exemption regimes for charities into one and suggested decriminalizing delays in TDS payments up to the filing date. 

Sitharaman also highlighted the exemption of 25 critical minerals from customs duties, with the Basic Customs Duty (BCD) on two of them being reduced. She announced a reduction in custom duties on gold and silver from 10% to 6%, and on platinum to 6.5%. The BCD on mobile phones, mobile PCBs, and mobile chargers will be decreased to 15%. 

The finance minister emphasized the expansion of the space economy, aiming to grow it fivefold over ten years, supported by an Rs 1,000 crore venture capital fund. She acknowledged the persistent flooding issues in Bihar and announced a financial support allocation of Rs 11,500 crore for flood control structures in Nepal. Assam will receive aid for flood management, Himachal Pradesh will get multilateral assistance for flood reconstruction, and Uttarakhand will be provided with aid for damage caused by landslides and cloudbursts.