Budget for Vikasit Bharat
JULY 24, 2024
By Pratap Singh, Pr. CIT
UNION Budget is one of the most anticipated and awaited events for the investors, policy planners, industry and general public. This is the first budget of the present Government in its third term. The budget is futuristic, growth oriented and is a step in laying down strong foundation for the Vikasit Bharat. The theme of the budget is employment, skilling, MSME and middle-class on which the Government intends to invest a sum of Rs. 2 Lakh Cr. The Hon'ble Finance Minister laid down 9 priority areas for the budget, namely; Productivity in Agriculture, Employment and Skilling, Inclusive Human Resource Development and Social Justice, Manufacturing and Service, Urban Development, Energy Security, Infrastructure, and Research, and Development and innovation. Capital expenditure has been pegged at Rs. 11.11 lakh crores, besides states will be provided 1,50,000 cr interest free loans towards capital expenditure. 3 Cr. additional houses will be constructed under PMAY. For women led development, the Government has allocated 3 lakh Cr. towards various schemes for women and girls. For tribal areas, and villages, various schemes have been announced besides opening up of 1000 new bank branches. A sum of Rs. 2.66 Lakh Cr. has been provided towards rural development and infrastructure. As per Hon'ble PM This budget provides new opportunity, brings new energy, creates avenues for employment, better growth and brighter future and will act as a catalyst to make India third largest economy. He further said that the budget lays down the foundations of Viksit Bharat.
The Government has announced various schemes to modernise productivity in agriculture which includes Agri-research, developing climatic resilient varieties of seeds, promote natural farming, promotion of pulses and oil seed production, and total provision for agriculture and allied sector has been kept at Rs. 1.52 Lakh Cr. For the employment and skilling category, the Government has announced 3 schemes for employment linked incentives specially with respect to first time employees and reimbursement of one month wage through Direct Benefits Transfer up to Rs. 15,000/- and contribution of Rs. 3,000/- per month in respect of the Provident Fund contribution made by the employer in respect of such first-time employees. The Government proposes to provide internship for 1 Cr. youth in top 500 companies for 1 year. For participation of women in work force, budget talks about construction of women hostels, through private participation, facilities of creches, skilling programs for women and promotion of women led Self-Help Groups (SHGs), With provision of skilling loans up to Rs. 7.5 Lakhs and education loan up to Rs. 10 Lakh of which interest subvention up to 3% will be provided by the Government. Special Infra schemes have been announced for eastern states like Bihar and Andhra Pradesh with the spirit, "Vikas Bhi, Virasat Bhi".
The budget shows receipts of Rs.32.07 Lakh Cr. including 25.83 Lakh Cr. net tax receipts. With a market borrowing of Rs. 14.02 Lakh Cr., the total expenditure has been pegged at Rs. 48.21 Lakh Cr. and the fiscal deficit has been maintained at 4.9% of GDP which is quite commendable. From the year 2026-27, the Government will go for further fiscal consolidation.
The short term capital gains on shares, etc. has been raised to 20%. The Government proposes to put more officers to decided pending appeals in the Income Tax Department and new 'Vivad Se Vishwas Scheme, 2024' for resolution of income tax disputes pending in appeal. With a view to reduce litigation, monetary limits for filing direct taxes, excise and service tax related appeals in Tax Tribunals, High Courts and Supreme Court increased to Rs.60 lakh, Rs.2 crore and Rs.5 crore respectively and Safe harbour rules have been expanded.
The most important announcement has been abolition of "Angel Tax" on all kinds of investment, which will spur start up eco system. With a view to bring foreign investment and foreign capital the tax on foreign companies has been reduced to 35% from existing 40%. The Government has also announced that equalization levy of 2 per cent will be withdrawn.
With reference to new tax regime, the standard deduction has been increased from Rs. 50,000/- to Rs. 75,000/- and the family pension deduction has been raised to Rs. 25,000/-. There has also been some tweaking in the tax slabs under the new tax regime as per which income from Rs. 3.00 to Rs. 7.00 Lakh per annum will be charged 5% income tax, from Rs. 7.00 Lakh to Rs. 10.00 Lakh @ 10%, from Rs. 10.00 Lakh to Rs. 12.00 Lakh @ 15% per annum and rest as last year. These provisions will reduce tax liability by an amount of Rs. 17,500/- for an individual tax payer. The total tax foregone on account of this provision works out to Rs. 37,000 Cr.
Overall, it is a very balanced and growth oriented budget, having focus on job creation, agriculture and MSME sector and has something for every section of society.
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