Understanding the Union Budget 2024

Excited about the changes announced in the Union Budget 2024? Check out this video for a quick summary of the major points announced by the finance minister. First, we’ll talk about the 9 key focus areas under 'Viksit Bharat' announced in the budget. Next, you’ll understand the changes mentioned for the New Tax Regime. The standard deduction is proposed to increase to ₹75,000, and the tax slabs have been revised. We’ll see how income up to ₹3 Lakhs is tax-free, while income above ₹15 Lakhs attracts a 30% tax rate. You’ll also learn how pensioners might benefit from a family pension deduction increase from ₹15,000 to ₹25,000. The video further explores capital gains tax. Long-term capital gains are set at a 12.5% tax rate, with an exemption limit of ₹1.25 Lakhs per year. Next, the video will discuss revisions to customs duties and proposed TDS and TCS changes. The latter includes a reduced 0.1% TDS rate on e-commerce transactions. The budget also mentioned additional investments under PM Awas Yojana and PM Surya Ghar Muft Bijli Yojana. Finally, we’ll explore new schemes worth ₹2 Lakh Crores for youth employment and upskilling. Similarly, larger Mudra loans and enhanced support were announced for MSMEs.

The Union Budget 2024 introduces significant changes to India's tax structure, impacting salaried individuals and investors alike. For salaried employees, the new tax regime offers an increased standard deduction of ₹75,000 and revised tax slabs, potentially reducing tax liability. Consider the example of an IT professional Sunil, who earns ₹10 Lakhs annually. As per the changes announced in the budget, if he files his taxes in the new regime, he can now save up to ₹10,000 in taxes. The budget also modifies capital gains taxation on listed investments. Short-term capital gains (STCG) tax has been increased from 15% to 20%. For long-term capital gains (LTCG), the tax rate has been raised to 12.5%, but with an increased exemption limit of ₹1.25 Lakhs. So, if Sunil chooses to sell off his investments after earning a profit of ₹10,500 in 9 months, he will have to pay 20% tax or ₹2,100. Alternatively, suppose he holds on to his shares for 2 years and earns around ₹23,000. Now, he will have to pay LTCG tax. But since his returns are less than ₹1 Lakh, he is tax-exempt. The budget brings a notable shift in property taxation by eliminating indexation benefits for LTCG on property sales. Despite reducing the LTCG tax rate to 12.5% for property, the removal of indexation could result in higher taxable gains. These alterations could lead to increased tax liability on property sales, notwithstanding the lower tax rate. These changes collectively reshape the landscape of personal finance and investment strategies in India.

The Union Budget 2024 introduces four groundbreaking EPFO-linked employment schemes. These aim to create 4.1 crore jobs over five years. It has a planned investment worth ₹2 Lakh Crores. Scheme A is for employees entering the formal workforce for the first time. It will offer them up to ₹15,000 as a one-month salary contribution, paid in instalments. Scheme B incentivises companies to hire new employees by subsidising 8-24% of newcomers' salaries. Scheme C reimburses companies for EPFO contributions up to ₹3,000 per month per employee. A fourth scheme targets India's top 500 companies, promoting internships with government and company contributions. These initiatives aim to formalise employment, upskill the workforce, and stimulate economic growth. The schemes particularly benefit young workers and those earning under ₹1 Lakh monthly. Only 21% of India's 64.3 crore employed people are regular salaried workers. Hence, the government's ambitious plan addresses this current employment landscape. By encouraging formal employment and labour-intensive industries, these schemes create a potential domino effect. Increased jobs will lead to higher productivity, economic growth, and further job creation. This scheme offers opportunities for fresh graduates, job seekers, and employers alike. Thus, the success of these initiatives hinges on the collaborative efforts of both the government and Corporate India.

If you’re starting a new venture or managing an MSME, the Union Budget has several key updates for you. Firstly, angel tax has been abolished, implying you can now raise funds without worrying about tax burdens. Additionally, the government is introducing a Rs. 1,000 Crore venture capital fund dedicated to the space economy, which could be a great opportunity if your start-up is in that sector. As an MSME, you might find it easier to tap into international markets through newly established e-commerce export hubs facilitated by public-private partnerships. You could also benefit from an enhanced credit guarantee scheme, that allows you to access collateral-free loans for machinery and equipment. Moreover, the Mudra loan limit has been increased to Rs. 20 Lakhs from the previous Rs. 10 Lakhs. The TReDS platform will be expanded to help unlock working capital by converting receivables into cash. The reduction of the TDS rate to 0.1% for e-commerce operators might positively impact your cash flow. Short-term capital gains tax has been reduced to 20% and long-term gains to 12.5%. Furthermore, corporate tax for foreign companies has been reduced to 35%. The fiscal deficit is projected at 4.9% of GDP, with Rs. 11.11 Lakh Crores allocated for capital expenditure, which could support infrastructure and growth.