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Understanding the Recent Budget Proposals: What It Means for You

Writer's picture: OPULENCIA CAPITALOPULENCIA CAPITAL

Budget 2024 presented a roadmap for India's development. It focused on boosting economic growth, creating jobs, and improving the lives of citizens. Key highlights include increased capital expenditure, tax benefits for individuals and businesses, and emphasis on agriculture, infrastructure, and technology.

Enhanced Deduction for Family Pension

If you receive a family pension, you can now claim a higher deduction. Previously, you could deduct 1/3rd of the pension amount, up to a maximum of ₹15,000. This limit has been increased to ₹25,000, but only if you opt for the New Tax Regime. While this is a welcome change, it may not significantly influence your decision between the Old and New Tax Regime.


Higher Standard Deduction for Salaried Employees

Salaried and retired individuals can claim a standard deduction of ₹50,000 against their taxable salary or pensions under both tax regimes. However, if you choose the New Tax Regime, this deduction increases to ₹75,000. For those sticking with the Old Tax Regime, the deduction remains ₹50,000.


Better Deduction for Employer's Contribution to NPS

Currently, your employer’s contribution to your NPS (National Pension System) is added to your income and then deducted under Section 80CCD(2). Central Government employees can claim up to 14% of their salary, while others can only claim up to 10%. To make the New Tax Regime more appealing, the limit for non-government employees has been raised to 14%. However, the overall limit of ₹7.5 lakh for employer contributions to NPS, Provident Fund, and superannuation remains unchanged. 

Revised Tax Slabs


Vikshit Bharat: Nine Priorities

The government has outlined nine priorities for a developed India, focusing on:

  1. Productivity and resilience in agriculture

  2. Employment and skill development

  3. Inclusive human resource development and social justice

  4. Manufacturing and services growth

  5. Urban development

  6. Energy security and transition

  7. Infrastructure

  8. Next-generation reforms

  9. Innovation and research


Agriculture Initiatives

  • Release of 109 high-yielding and climate-resilient crop varieties

  • 1 crore farmers to adopt natural farming in the next two years

  • 10,000 bio-input resource centers planned for natural farming


Taxation Changes

  • Indexation removed for calculating capital gains on property sales.

  • Long Term Capital Gain exemption limit raised to ₹1.25 lakh for certain assets.

  • Long Term Capital Gain tax set at 12.5%, Short Term Capital Gain at 20% for certain assets.

  • Angel Tax abolished, corporate tax for foreign companies reduced to 35%.

  • Buy-back income to be taxed in the recipient’s hands.

  • TDS on mutual fund or UTI repurchase units withdrawn.

  • STT on F&O of securities increased to 0.02% and 0.1%, respectively.

  • Merged 5% TDS rates to 2%.

  • Increased NPS employer contribution deduction to 14% of salary.

  • Reduced customs duty on mobile phones, chargers, and PCBA to 15%.

  • Reduced customs duty on gold and silver to 6%, platinum to 6.4%.

 

 

Infrastructure Development

  • ₹11.11 lakh crore allocated for capital expenditure (3.4% of GDP)

  • ₹1.5 lakh crore for interest-free loans to states

  • PMGSY Phase IV to connect 25,000 rural habitations

Boosting Manufacturing

  • Credit Guarantee Scheme for MSMEs with a cover up to ₹100 crore

  • Mudra loan limit raised from ₹10 lakh to ₹20 lakh for small businesses

  • Halved turnover threshold for TReDS platform onboarding

  • Support for 50 multi-product food irradiation units in the MSME sector

  • E-commerce export hubs for MSMEs and artisans

  • 24 new SIDBI branches in MSME clusters

  • New credit assessment model by PSBs for MSMEs

Energy Sector Updates

  • New policy for promoting pumped storage projects for electricity

  • Partnership for Bharat Small Reactors and Small Modular Reactor R&D

  • NTPC-BHEL JV for 800 MW thermal power plant with AUSC technology

  • Transition roadmap from energy efficiency to emission targets

  • Regulations for the Indian Carbon Market

Research & Innovation

  • Operationalize Anusandhan National Research Fund

  • ₹1 lakh crore financing pool for private sector research

  • ₹1,000 crore Venture Capital Fund to expand the space economy

Urban Development Plans

  • Developing cities as growth hubs through economic and transit planning

  • Transit Oriented Development in 14 large cities

  • Framework for brownfield redevelopment of existing cities

  • ₹10 lakh crore investment for housing 1 crore urban poor and middle-class families

  • Projects for water supply, sewage treatment, and solid waste management in 100 cities

  • Encouragement for states to lower stamp duties


Budget 2024 aims to position India as a global economic powerhouse. With a strong emphasis on infrastructure, agriculture, and technology, the budget seeks to create a prosperous India. While the long-term impact remains to be seen, the initial steps taken are promising. It's essential to monitor the implementation of these policies closely to assess their effectiveness in improving the lives of citizens.




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