Union Budget Highlights for UPSC Aspirants

As you know, every year, the government of India makes a big plan about how it will spend the country’s money. This plan is called the Budget. It’s like a family deciding how to spend its income on things like food, clothes, and education.

The Budget tells us what the government thinks is important for the country. It shows us where the government wants to spend more money – like building roads, schools, or hospitals. It also tells us how the government plans to collect money, usually through taxes.

Understanding the Budget is really important, especially for people who want to work in government or help the country grow. It helps us see what’s happening in India and how the government is trying to make things better. This year Finance Minister Nirmala Sitharaman presented her seventh straight Budget on July 23 for the fiscal 2024-25, surpassing the record of former Prime Minister Morarji Desai. Let us have a look at the budget presented by our honorable finance minister.

Union Budget Highlights

Finance Minister Nirmala Sitharaman presented the Union Budget 2024-25, marking her seventh consecutive budget, surpassing the record of former Prime Minister Morarji Desai. This budget comes after the parliamentary elections, with the present government formed through a coalition with regional parties, potentially leading to shifts in budgeting patterns.

Personal Income Tax

The personal tax slab rates have changed, you can have a look at the revised personal income tax slabs.

• Standard Deduction Increase: The standard deduction for salaried employees will increase from ₹50,000 to ₹75,000.
• Family Pension Deduction: Deduction on family pension to be enhanced from ₹15,000 to ₹25,000.
• New Tax Regime Slabs:
  • ₹0-3 lakh: Nil
  • ₹3-7 lakh: 5%
  • ₹7-10 lakh: 10%
  • ₹10-12 lakh: 15%
  • ₹12-15 lakh: 20%
  • Above ₹15 lakh: 30%

NPS Contributions

The NPS contribution are also revised, have a look at the revised NPS contributions data in the given section of the article.

• Increased Tax Deduction: Tax deduction on NPS contributions raised from 10% of salary to 14%, applicable to both government employees and private companies.

Securities Transaction Tax

The securities transaction tax is also in the revised format, you can have a look at the revised securities transaction tax.

• Futures and Options: Securities Transaction Tax on Futures and Options contracts to be increased to 0.2% and 0.1% respectively.
• Buyback of Shares: Income received on the buyback of shares to be taxed in the hands of the recipient.

Customs Duties Adjustments

Have a look at the revised custom duties adjustments data in the given section of the article.

• Precious Metals: Customs duties on gold and silver reduced to 6%, and platinum to 6.4%.
• Critical Minerals: Lithium, copper, and cobalt exempted from custom duty.
• Solar Manufacturing: Expansion of exempted capital goods used in the manufacturing of solar cells and panels.

Capital Gains Taxes

There is a revised capital gains tax rate, you can find the same below.

• Short Term: Short term capital gain tax on certain financial assets revised to 20%.
• Long Term: Long term capital gain tax revised to 12.5% on financial assets.
• TDS Rate: TDS rate on e-commerce operators reduced to 0.1% from 1%.

Support for Start-Ups

There is a support for the start-ups in the form of increased angel tax rates and reduction in corporate tax.

• Angel Tax Abolished: To boost the Indian startup ecosystem, the Angel Tax for all classes of investors has been abolished.
• Corporate Tax Reduction: Corporate tax rate on foreign companies reduced from 40% to 35%.

Urban Housing and Development

There are revised plans for urban housing and development, have a look at the data below.

• PM Awas Yojana Urban 2.0: Investment of ₹10 lakh crore to address housing needs of 1 crore urban poor and middle-class families.
• Interest Subsidy: Provision of interest subsidy to facilitate loans for urban housing.
• Transit-Oriented Development: Plans for 14 large cities with populations above 30 lakhs.

Infrastructure and Rural Development

There are revised plans for urban Infrastructure and Rural Development, have a look at the data below.

• Capital Expenditure: Allocation of ₹11 lakh crore, or 3.4% of GDP, for infrastructure development.
• Rural Connectivity: Launch of Pradhan Mantri Gram Sadak Yojana for road connectivity in 25,000 rural habitations.

Education and Skilling

There are revised plans for education and skilling, have a look at the data below.

• Funding: Allocation of ₹1.48 lakh crore for education, employment, and skilling.
• New Skilling Program: Target of skilling 20 lakh youths with new courses and skilling loans.
• Internship Program: Internships in 500 top companies for 1 crore youths over 5 years.

MSME Support

There are revised plans for MSME support, have a look at the data below.

• Credit Guarantee: Credit guarantee scheme for MSMEs with a guarantee cover of ₹100 crores.
• Mudra Loans: Enhanced Mudra loans from ₹10 lakhs to ₹20 lakhs for entrepreneurs under the Tarun category.
• SIDBI Branches: 24 new SIDBI branches to be opened in MSME clusters this year, covering 168 out of 242 clusters.

Research and Development

There are revised plans for research and development, have a look at the data below.

• Anusandhan Research Fund: Operationalization for basic research and prototype development with a pool of ₹1 lakh crore.
• Space Economy: Aiming to develop the space economy fivefold in 10 years with a venture capital fund of ₹1 lakh crore.

Tourism

There are revised plans for tourism, have a look at the data below.

• Global Tourism Hub: Development of Vishnupad Temple at Gaya, Mahabodhi Temple at Bodh Gaya, and support for tourism in Odisha, including Nalanda University development.

Debt Recovery

There are revised plans for debt recovery, have a look at the data below.

• Strengthening Tribunals: Reforms and strengthening of debt recovery tribunals, with additional tribunals to speed up recovery processes.

This budget aims to address a broad spectrum of economic activities, focusing on enhancing tax structures, supporting start-ups and MSMEs, improving infrastructure and housing, and enhancing innovation and research.

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