Finance Minister Nirmala Sitharaman presents her seventh straight Budget on July 23rd for the fiscal year of 2024-25, leaving behind the record of the former prime minister Morarji Desai. This year’s budget is the first budget presented by the BJP-led NDA government since it was re-elected in June. Read all the budget 2024 highlights and significant announcements below:
Ms. Sitharaman explained the withdrawal of the 2% equalization levy, while presenting the budget, she also said that the standard deduction of the salaried employees will be increased to rupees 75000 from 50000 in accordance to the new income tax regime in FY25.
Budget 2024
The Budget for 2024-25 has set nine different priorities in order to generate great opportunities with productivity and resilience in agriculture, employment and skilling, inclusive Human resource development and social justice, manufacturing and service, urban development, energy security, infrastructure, innovation, research and development, and next generation reforms. Some major announcements were also made by Ms. Sitharaman for Bihar and Andhra Pradesh, including a boost in infrastructure and special financial support. She also announced abolishing angel tax for all classes of investors in startups.
During this, stock market benchmarks Sensex and nifty tanked after finance minister Nirmala Sitharaman announced a hike in STT (securities Transaction Tax) on f and O (futures and options) securities. The 30-share BSE Sensex hiked as soon as finance minister Nirmala Sitharaman began presenting the budget for 2024-25, however within minutes it slipped in the red and later plummeted 1266.17 points to 79,235.91 during the afternoon. Given below are the important income tax-related announcements in budget 2024.
• Rate of TDS on house rent payments of more than rupees 50,000 per month cut from 2% to 5%
• No more reopening or re-assessment of old ITR beyond 3 years if escaped income is under rupees 20 lakh.
• You cannot declare house rental income as business income to save tax anymore.
• Tax exemptions contribute to NPS for employees by private employers increased from 10% to 14% of salary.
• The time of income tax reassessment reduced.
• Customer duty will cut to 6% resulting in gold and silver to become cheaper
• Purchase of cars can be utilized to lower TDS on salary, TDC paid of foreign remittances.
• Gold investments to Invite LTCG tax of 12.5% instead of 20% with indexation, holding period cut at 24 months.
• LTCG, STCG holding stop for capital gains calculation of equity, property, gold, financial, non-financial assets changed in Budget 2024.
• NPS Dutch deduction limit for employers in private sector raised from 1% to 14% of the employee’s basic salary.
• Indexation profit on sale of property removes, new LTCG rate of 12.5% announced for capital gains on sale of property.
• Securities transaction tax (STT) on F and O increased to 0.2% and 0.1%
• Standard deduction raised to rupees 75000 in the new tax regime.
• Capital gains exemptions limit hiked to rupees 1.25 lakh.
• LTCG brought up to 12.5% from 10%
• STCG cut to 20% on certain financial assets and 12.5% on LTCG
• Redemption of capital gains increased to rupees 1.25 lakh per year for specific assets.
• New NPS scheme for minors announced in budget 2024: parents can put together pension or their children which will be transferred to them once they attain majority.
| The new Tax Rate Structure | |
| 0 to 3 lakh rupees | nil |
| 3 to 7 lakh rupees | 5% |
| 7 to 10 lakh rupees | 10% |
| 10 to 12 lakh rupees | 15% |
| 12 to 15 lakh rupees | 20% |
| Above 15 lakh rupees | 30% |
Due to all of this changes, a salaried employee in the new tax regime can save up to 17.500 rupees in income tax.
Finance Minister Nirmala Sitharaman’s seventh straight Budget for 2024-25 marks a significant milestone with several key announcements. Notably, the standard deduction for salaried employees will increase, and the 2% equalization levy will be withdrawn. The Budget outlines nine priorities aimed at enhancing productivity, agriculture, employment, urban development, and more. Significant support is pledged for Bihar and Andhra Pradesh, alongside the abolition of the angel tax for startup investors.
However, the stock market reacted negatively to the hike in the Securities Transaction Tax. Key income tax changes include a reduced TDS rate on house rent, limitations on house rental income declarations, increased tax exemptions for private sector employees contributing to NPS, and new long-term capital gains tax rates for gold and property. Overall, the Budget aims to drive economic growth and resilience while addressing diverse sectoral needs.
Read This Also: Understanding the Basics of New Tax Regime
