Finance Minister Nirmala Sitharaman announced the 2024 Budget today. Let’s explore the key budget highlights and examine their impact on personal finance, especially for salaried individuals.
Key Budget Highlights for 2024-25
- For first-time employees in all formal sectors, one-month wage will be provided, disbursed in 3 installments to employees registered under EPFO, up to ₹ 15,000.
- Incentives for first-time employees and employers in the manufacturing sector for EPFO contributions in specified scales during the first 4 years of joining.
- Government of India proposes to reimburse EPFO contributions to employers up to ₹ 3,000 per month for 2 years for each additional employee added.
- Students will receive a 3% discount on educational loans for higher education.
- Reduction in customs duty will make gold, silver, specific cancer medicines, etc., more affordable.
- Budget 2024 proposes to increase Short Term Capital Gains (STCG) from 15% to 20%, Long Term Capital Gains (LTCG) from 10% to 12.5%, and increase LTCG exemptions from ₹ 1 lakh per year to ₹ 1.25 lakhs per year. This will significantly impact individuals saving for short-term and long-term goals.
- Standard Deduction under the New Tax Regime has been increased from ₹ 50,000 to ₹ 75,000 per year.
- Deduction for family pension has been enhanced from ₹ 15,000 to ₹ 25,000.
- There are changes in Income Tax Rates for the New Tax Regime. Refer to the sections below for more information.
- Mudra Loans limit has been increased from ₹ 10 lakhs to ₹ 20 lakhs under the ‘Tarun’ category.
- The government proposes to provide internship opportunities in 500 top companies to 1 crore youth over 5 years, with an allowance of ₹ 5,000 per month and a one-time assistance of ₹ 6,000 through CSR funds.
- Government of India proposes to introduce NPS Vatsalya, where a NPS scheme can be opened by minors and converted to a regular NPS account after the child attains 18 years of age.
Detailed Budget Highlights for 2024
#1 – Viksit Bharat to focus on 4 areas This budget aims to focus on 4 areas: Yuva (Youth), Mahilayen (Women), Annadata (Farmers), and Garib (Poor).
#2 – Budget Theme to focus on 4 areas The theme of the budget is Employment, Skilling, MSMEs, and Middle Class.
#3 – PM’s 3 packages on employment and skilling
- Scheme-A – First Timers
- Government of India to provide one-month wage to new employees in all formal sectors in 3 installments up to ₹ 15,000.
- This benefit will be extended to all first-time employees earning less than ₹ 1 lakh per month.
- This scheme is expected to benefit 210 lakh youth.
- Scheme-B – Job Creation in Manufacturing
- Linked to first-time employees in this sector.
- Incentives for both employees and employers for EPFO contributions in specified scales during the first 4 years of joining.
- This scheme is expected to benefit 30 lakh youth.
- Scheme-C – Support to Employers
- Government will reimburse EPFO contributions of employers up to ₹ 3,000 per month for 2 years for all new hires.
- This scheme is expected to generate 50 lakh jobs.
#4 – PM’s Package – 4th Scheme – Lower Interest for higher education loans
- Government of India to provide financial support for loans up to ₹ 10 lakh for higher education in domestic institutions.
- Direct E-vouchers to be provided to 1 lakh students annually.
- Annual interest subvention of 3%.
#5 – Income Tax Rates for 2024
Government proposes to simplify the New Tax Regime.
- Standard Deduction for salaried employees increased from ₹ 50,000 to ₹ 75,000.
- Deduction on family pension for pensioners increased from ₹ 15,000 to ₹ 25,000.
- Proposed Tax Rates for New Tax Regime:
- Up to ₹ 3 lakh – Nil
- ₹ 3-7 lakh – 5%
- ₹ 7-10 lakh – 10%
- ₹ 10-12 lakh – 15%
- ₹ 12-15 lakh – 20%
- Above ₹ 15 lakh – 30%
#6 – Proposal to Rationalize Tax Gains
- Short-term gains on financial assets to attract a 20% tax rate.
- Long-term gains on all financial and non-financial assets to attract a 12.5% tax rate.
- Increase in the limit of exemption of capital gains on financial assets to ₹ 1.25 lakh per year.
- Abolishment of ANGEL tax for all classes of investors.
- Simpler tax regime to operate domestic cruise.
- Provision for safe harbor rates for foreign mining companies (Selling raw diamonds).
- Corporate tax rate on foreign companies reduced from 40% to 35%.
#7 – National Pension Scheme Government of India plans to introduce NPS Vatsalya, a plan for contributions by parents and guardians for minors. The scheme will convert to a regular NPS account after the minor turns 18 years old.
#8 – Enhancing Mudra Loans The limit is now increased to ₹ 20 lakh from the current ₹ 10 lakh under the ‘Tarun’ category.
#9 – PM’s 5th package – Internship Opportunities
- Government proposes a scheme to provide internship opportunities in 500 top companies to 1 crore youth over 5 years.
- Allowance of ₹ 5,000 per month along with a one-time assistance of ₹ 6,000 through CSR funds.
#10 – Reduction of Customs Duty – Some Items would be cheaper now
- Full exemption of customs duties on 3 more cancer medicines.
- Reduction in Basic Customs Duty (BCD) to 15% on Mobile phones, Mobile PCBA, and chargers.
- Reduction in customs duty on gold and silver to 6% and on platinum to 6.4%.
- Reduction in BCD on shrimp and fish feed to 5%.
- Exemption of more capital goods for manufacturing solar cells & panels.
- Full exemption of customs duties on 25 critical minerals.
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Suresh KP is the founder of MyInvestmentIdeas.com, which he has run since 2011. He has over 23 years of experience across investments, mutual funds, stock markets, insurance, taxation and financial planning, and has written 2,500+ articles for Indian retail investors. He has completed NISM Investment Adviser (Level 1 & 2) and NISM Research Analyst certifications. Articles on this site compare publicly available data for educational purposes; Suresh is not a SEBI-registered investment adviser. More about his background: About Suresh KP | X (Twitter)
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