Budget 2024-25

India’s Economic Resilience Amid Global Uncertainties

Despite the ongoing global economic uncertainties, India continues to stand out as a beacon of economic growth, a trend expected to persist in the coming years. Presenting the Union Budget 2024-25 in Parliament, Finance Minister Smt. Nirmala Sitharaman emphasized India’s low and stable inflation, moving steadily towards the 4 percent target. Currently, core inflation (excluding food and fuel) stands at 3.1 percent, and the government is taking proactive steps to ensure adequate supplies of perishable goods in the market.

Interim Budget Focus

Reflecting on the interim budget, the Finance Minister reiterated the government’s focus on four key segments: the poor (‘Garib’), women (‘Mahilayen’), youth (‘Yuva’), and farmers (‘Annadata’).

Budget Estimates 2024-25: Key Highlights

Overall Budget Estimates

The Finance Minister presented the Union Budget for 2024-25, outlining the government’s financial plan for the upcoming fiscal year. The total receipts (excluding borrowings) are estimated at ₹32.07 lakh crore, while total expenditure is projected at ₹48.21 lakh crore. This reflects the government’s continued focus on development and fiscal discipline.

Net Tax Receipts and Fiscal Deficit

Net tax receipts are estimated at ₹25.83 lakh crore for the year. The fiscal deficit, which is a key indicator of the government’s borrowing needs, is projected at 4.9% of GDP. The government remains committed to its fiscal consolidation path, with an aim to reduce the deficit below 4.5% in the next fiscal year.

GDP Growth Rate

The GDP for the fiscal year 2024-25 is estimated at ₹3,26,36,912 crore, representing a 10.5% growth over the provisional estimates of FY 2023-24, which stood at ₹2,95,35,667 crore. This reflects a robust economic growth outlook.

Expenditure

The total expenditure for Budget Estimates (BE) 2024-25 is set at ₹48,20,512 crore, with capital expenditure accounting for ₹11,11,111 crore. This marks a 16.9% increase in capital expenditure compared to the Revised Estimates (RE) of 2023-24. Effective capital expenditure is projected at ₹15,01,889 crore, an 18.2% increase over the previous year’s RE, underscoring the government’s commitment to infrastructure development and long-term growth.

Receipts

• Total Receipts: Estimated at ₹32.07 lakh crore.
• Net Tax Receipts: Estimated at ₹25.83 lakh crore.
• Gross Market Borrowings: Estimated at ₹14.01 lakh crore.
• Net Market Borrowings: Estimated at ₹11.63 lakh crore.

Interest Payments

Interest payments for the fiscal year are estimated at ₹11 lakh crore, highlighting the significant portion of the budget allocated to servicing the national debt.

Deficits

• Fiscal Deficit: Estimated at 4.9% of GDP.
• Revenue Deficit: Estimated at 1.8% of GDP.
• Primary Deficit: Estimated at 1.4% of GDP.

New Schemes

A significant allocation of ₹2 lakh crore has been made to the Department of Economic Affairs for the implementation of new schemes. This funding is expected to drive economic reforms, innovation, and development projects across various sectors.

These budget estimates reflect the government’s strategic focus on maintaining economic growth while pursuing fiscal prudence and structural reforms to strengthen the nation’s economy.

Budget Theme and Initiatives

Smt. Sitharaman outlined the broader theme of this year’s budget, highlighting a concentrated effort on employment, skill development, MSMEs, and the middle class. She announced a comprehensive package under the Prime Minister’s leadership, comprising five schemes and initiatives aimed at facilitating employment, skill development, and other opportunities for 41 million youth over a five-year period, backed by a central outlay of ₹2 lakh crore. For the current year, ₹1.48 lakh crore has been earmarked specifically for education, employment, and skill development.

Part A: Priorities Areas of Budget

Budget Priorities for a ‘Viksit Bharat’

To achieve the vision of a developed India, the budget lays out nine key priorities:

1. Enhancing productivity and resilience in agriculture
2. Promoting employment and skill development
3. Fostering inclusive human resource development and ensuring social justice
4. Boosting manufacturing and services
5. Advancing urban development
6. Strengthening energy security
7. Expanding infrastructure
8. Encouraging innovation, research, and development
9. Implementing next-generation reforms

These priorities are designed to generate ample opportunities for all and drive India towards its goal of becoming a developed nation.

Priority 1: Enhancing Productivity and Resilience in Agriculture

The Finance Minister announced a robust strategy to enhance productivity and build resilience in India’s agricultural sector. Central to this strategy is a comprehensive review of the agricultural research framework, focusing on raising productivity and developing climate-resilient crop varieties. In line with this, 109 new high-yielding and climate-resilient varieties of 32 field and horticultural crops will be released for cultivation by farmers.

Over the next two years, the government will initiate 10 million farmers into natural farming practices, supported by certification and branding to ensure their produce meets market standards. To further bolster sustainable farming, 10,000 need-based bio-input resource centers will be established across the country.

Additionally, large-scale clusters for vegetable production will be developed closer to major consumption centers, ensuring a steady supply of fresh produce. The government will also facilitate financing for shrimp farming, processing, and export through NABARD, aiming to strengthen this important sector.

In partnership with state governments, the implementation of Digital Public Infrastructure (DPI) in agriculture will be accelerated, with the goal of covering farmers and their lands within three years. A digital crop survey will also be conducted in 400 districts, providing valuable data to inform agricultural practices and policies. Moreover, the issuance of Jan Samarth-based Kisan Credit Cards will be streamlined to provide farmers with easier access to credit.

The Finance Minister allocated ₹1.52 lakh crore to the agriculture and allied sectors for the year, highlighting the government’s commitment to driving growth and resilience in this vital area of the economy.

Priority 2: Empowering Employment & Skilling

The Finance Minister unveiled a series of initiatives aimed at boosting employment and enhancing skilling across the country. Central to this effort are three new schemes under the Prime Minister’s package, designed as ‘Employment Linked Incentives.’ These schemes will be tied to enrolment in the Employees’ Provident Fund Organisation (EPFO), focusing on the recognition of first-time employees and providing support to both employees and employers. As part of these initiatives, new entrants in all formal sectors will receive one month’s wage in three installments, up to ₹15,000, a measure expected to benefit 210 lakh youth. Additionally, the government will reimburse EPFO contributions of employers up to ₹3,000 per month for two years for all new hires, a step anticipated to generate 50 lakh jobs.

To further empower women in the workforce, the government will facilitate higher participation by establishing working women hostels in collaboration with industry and creating creches to support working mothers.

On the skilling front, the Finance Minister announced the launch of a new centrally sponsored scheme, the fourth under the Prime Minister’s package, aimed at enhancing collaboration between state governments and industry. This scheme will skill 20 lakh youth over a five-year period, with 1,000 Industrial Training Institutes (ITIs) being upgraded under a hub-and-spoke model with a focus on outcome orientation.

Moreover, the Model Skill Loan Scheme will be revised to provide loans of up to ₹7.5 lakh, backed by a guarantee from a government-promoted fund, expected to benefit 25,000 students annually. For youth who have not been eligible for other government schemes or policies, the Finance Minister announced financial support for loans up to ₹10 lakh for higher education in domestic institutions. E-vouchers will be issued directly to 1 lakh students every year, offering an annual interest subvention of 3 percent on the loan amount.

These comprehensive measures reflect the government’s commitment to fostering employment opportunities and equipping the youth with the necessary skills to thrive in a rapidly evolving job market.

Priority 3: Inclusive Human Resource Development and Social Justice

Saturation Approach to Economic Empowerment

The Finance Minister highlighted the government’s commitment to enhancing the implementation of schemes aimed at supporting economic activities for craftsmen, artisans, self-help groups, Scheduled Castes (SC), Scheduled Tribes (ST), women entrepreneurs, and street vendors. This includes initiatives such as PM Vishwakarma, PM SVANidhi, National Livelihood Missions, and Stand-Up India. These programs will be intensified to ensure broader participation and benefits for these groups, driving inclusive growth.

Purvodaya: Comprehensive Development of Eastern India

The government will launch the “Purvodaya” initiative, a comprehensive development plan targeting the eastern region of India, including Bihar, Jharkhand, West Bengal, Odisha, and Andhra Pradesh. The focus will be on human resource development, infrastructure enhancement, and the creation of economic opportunities to transform this region into a significant contributor to India’s goal of becoming a developed nation (“Viksit Bharat”). This includes the development of the Amritsar-Kolkata Industrial Corridor, with a specific industrial node planned at Gaya.

Pradhan Mantri Janjatiya Unnat Gram Abhiyan

To improve the socio-economic conditions of tribal communities, the government will introduce the Pradhan Mantri Janjatiya Unnat Gram Abhiyan. This initiative aims for saturation coverage of tribal families in tribal-majority villages and aspirational districts, impacting 63,000 villages and benefiting 5 crore tribal people. This program underscores the government’s focus on uplifting marginalized communities.

Expansion of Banking Services in the North East

The Finance Minister announced the establishment of more than 100 branches of India Post Payment Bank in the North East region. This expansion is part of the government’s effort to increase financial inclusion and access to banking services in remote areas.

Rural Development and Infrastructure Investment

This year, the government has allocated ₹2.66 lakh crore towards rural development, including significant investments in rural infrastructure. This budget underscores the commitment to improving the quality of life in rural areas, promoting inclusive growth, and ensuring sustainable development.

Support for Women and Girls

An allocation of over ₹3 lakh crore has been made for schemes specifically benefiting women and girls. This substantial investment reflects the government’s dedication to promoting gender equality and empowering women across the country.

Andhra Pradesh Reorganization Act: Infrastructure and Financial Support

Under the Andhra Pradesh Reorganization Act, the government will arrange financial support amounting to ₹15,000 crores for the fiscal year 2024-25. Key projects include the completion of the Polavaram Irrigation Project, which is crucial for ensuring national food security. Additionally, essential infrastructure development such as water, power, railways, and roads will be prioritized in the Kopparthy node on the Vishakhapatnam-Chennai Industrial Corridor and the Orvakal node on the Hyderabad-Bengaluru Industrial Corridor.

Priority 4: Manufacturing & Services

Enhancement of Mudra Loans

The Mudra Loan limit under the ‘Tarun’ category has been increased from ₹10 lakh to ₹20 lakh. This enhancement is targeted at entrepreneurs who have previously availed and successfully repaid their loans, enabling them to expand their businesses further.

Credit Guarantee Scheme for MSMEs

A new Credit Guarantee Scheme specifically designed for MSMEs in the manufacturing sector will be introduced. This scheme includes a self-financing guarantee fund that offers up to ₹100 crore in guarantee cover per applicant. In parallel, public sector banks will develop in-house capabilities to assess MSMEs for credit, reducing reliance on external assessments. Additionally, a new mechanism will be established to ensure the continuity of bank credit to MSMEs during periods of financial stress.

Support for MSMEs: Food Irradiation and Quality Testing

To bolster the MSME sector, financial support will be provided for the establishment of 50 multi-product food irradiation units. Moreover, the setup of 100 food quality and safety testing labs with NABL accreditation will be facilitated. These initiatives aim to enhance the safety and quality of food products, enabling MSMEs and traditional artisans to expand their reach into international markets through E-Commerce Export Hubs, developed in public-private-partnership (PPP) mode.

Development of Industrial Infrastructure

As part of the National Industrial Corridor Development Programme, twelve new industrial parks will be established. These parks are aimed at driving industrial growth and enhancing infrastructure to support the manufacturing sector.

Internship Opportunities for Youth

The government will launch a comprehensive scheme to provide internship opportunities in 500 top companies to 1 crore youth over the next five years. Participants will receive an allowance of ₹5,000 per month, along with a one-time assistance of ₹6,000, funded through Corporate Social Responsibility (CSR) initiatives. This program aims to equip the youth with practical experience and skills to enhance their employability.

Rental Housing for Industrial Workers

In a bid to improve the living conditions of industrial workers, a rental housing scheme featuring dormitory-type accommodation will be introduced. This initiative will be executed in PPP mode with Viability Gap Funding (VGF) support, ensuring affordable and accessible housing for the workforce.

Critical Minerals Mission

A Critical Minerals Mission will be launched to boost domestic production, recycling, and overseas acquisition of critical minerals. This mission is crucial for securing the supply chains necessary for high-tech manufacturing and other strategic industries.

Strengthening of Insolvency Resolution Mechanisms

To expedite insolvency resolutions, the government will strengthen existing tribunals and establish additional appellate tribunals. This will streamline the insolvency process, providing faster resolutions and greater clarity for businesses in distress.

Priority 5: Urban Development

Urban Housing: PM Awas Yojana Urban 2.0

The PM Awas Yojana Urban 2.0 initiative will address the housing needs of 1 crore urban poor and middle-class families with a substantial investment of ₹10 lakh crore. This ambitious program includes a central assistance of ₹2.2 lakh crore over the next five years, ensuring that affordable housing becomes accessible to a significant portion of the urban population.

Water Supply and Sanitation

The government, in collaboration with State Governments and Multilateral Development Banks, will promote comprehensive water supply, sewage treatment, and solid waste management projects in 100 large cities. These projects will be structured as bankable initiatives, ensuring sustainable urban development and improving the quality of life in these cities.

Support for Street Vendors: PM SVANidhi

Building on the success of the PM SVANidhi Scheme, the government envisions the development of 100 weekly ‘haats’ or street food hubs in select cities every year for the next five years. This initiative aims to further uplift street vendors by providing them with organized, dedicated spaces to conduct their businesses, thereby enhancing their livelihoods.

Transit-Oriented Development

To enhance urban mobility and infrastructure, the government will implement Transit-Oriented Development (TOD) plans in 14 large cities with populations exceeding 30 lakh. These TOD plans will focus on creating more accessible and efficient public transit systems, reducing congestion, and promoting sustainable urban growth.

Encouragement of Women Property Ownership

States are being encouraged to lower stamp duties on properties purchased by women. This initiative is designed to promote gender equality in property ownership, making it easier and more affordable for women to invest in real estate.

Rental Housing Market Reforms

The government will introduce enabling policies and regulations to create efficient and transparent rental housing markets. These measures aim to increase the availability of rental housing, ensuring that urban residents have access to affordable and secure living arrangements.

This comprehensive approach to urban development underscores the government’s commitment to creating sustainable, inclusive, and well-planned urban environments that cater to the diverse needs of the population.

Priority 6: Energy Security

PM Surya Ghar Muft Bijli Yojana

In alignment with the interim budget announcement, the PM Surya Ghar Muft Bijli Yojana has been launched to provide free electricity up to 300 units per month to 1 crore households through the installation of rooftop solar plants. The scheme has received an overwhelming response, with over 1.28 crore registrations and 14 lakh applications already submitted. This initiative is a significant step toward promoting renewable energy adoption at the household level and reducing electricity costs for families.

Nuclear Energy Initiatives

Nuclear energy is poised to play a crucial role in India’s energy mix as the nation progresses toward its goal of becoming a developed country (“Viksit Bharat”). Key initiatives include:

• Bharat Small Reactors: The government is promoting the development of Bharat Small Reactors, which will enhance nuclear energy production.
• R&D for Bharat Small Modular Reactors: Research and development efforts will focus on Bharat Small Modular Reactors and other advanced nuclear technologies, ensuring that India remains at the forefront of nuclear energy innovation.

Pumped Storage Policy

To support the growing share of renewable energy in the national grid, a new Pumped Storage Policy will be implemented. This policy will facilitate electricity storage and ensure the smooth integration of renewable energy sources, thereby enhancing grid stability and energy security.

AUSC Thermal Power Plants

A joint venture between NTPC and BHEL will establish a full-scale 800 MW Advanced Ultra Super Critical (AUSC) thermal power plant. This plant will leverage cutting-edge technology to increase efficiency and reduce emissions, contributing to the nation’s energy security while minimizing environmental impact.

Support for Micro and Small Industries

Financial support will be provided to assist micro and small industries in transitioning to cleaner forms of energy. Additionally, the government will facilitate investment-grade energy audits in 60 industrial clusters, with plans to expand this initiative to 100 clusters in the next phase. These efforts aim to promote energy efficiency and reduce the carbon footprint of small industries.

This multifaceted approach to energy security highlights the government’s commitment to achieving a sustainable and reliable energy supply for India. By advancing renewable energy initiatives, expanding nuclear energy capabilities, and supporting cleaner energy adoption in industries, these measures will ensure that the country is well-prepared to meet its future energy needs.

Priority 7: Infrastructure

Strong Fiscal Support for Infrastructure Development

The Finance Minister emphasized the substantial investment made by the Central Government in infrastructure over the years, which has significantly boosted the economy through its strong multiplier effect. The government is committed to maintaining robust fiscal support for infrastructure development over the next five years, balancing this with other national priorities and the need for fiscal consolidation. This year, an allocation of ₹11,11,111 crore, equivalent to 3.4% of GDP, has been earmarked for capital expenditure in infrastructure.

Pradhan Mantri Gram Sadak Yojana (PMGSY) Phase IV

Phase IV of the Pradhan Mantri Gram Sadak Yojana (PMGSY) will be launched to ensure all-weather connectivity for 25,000 rural habitations. These areas have now become eligible for this connectivity due to population growth, reflecting the government’s ongoing commitment to improving rural infrastructure and accessibility.

Irrigation and Flood Mitigation

Significant financial support, totaling ₹11,500 crore, will be provided for irrigation and flood mitigation projects in Bihar under the Accelerated Irrigation Benefit Programme and other sources. Key projects include the Kosi-Mechi intra-state link and 20 other ongoing and new schemes, encompassing barrages, river pollution abatement, and irrigation initiatives. Additionally, the government will extend assistance to Assam, Himachal Pradesh, Uttarakhand, and Sikkim for flood management, landslide prevention, and related infrastructure projects, ensuring the safety and resilience of these regions.

Long-Term Support to States

To further bolster infrastructure development, ₹1.5 lakh crore will be provided to states as long-term interest-free loans. This funding is aimed at supporting states in resource allocation and ensuring that critical infrastructure projects receive the necessary financial backing.

Tourism Development Initiatives

The government has announced several tourism-focused infrastructure projects, including:

• Vishnupad Temple Corridor and Mahabodhi Temple Corridor: These corridors will be developed, modeled on the successful Kashi Vishwanath Temple Corridor, to enhance the spiritual tourism experience.
• Rajgir Development Initiative: A comprehensive development initiative will be undertaken for Rajgir, a site of religious significance for Hindus, Buddhists, and Jains. This project will highlight the historical and cultural importance of the area.
• Nalanda Development: Nalanda will be developed as a major tourist center, with efforts to revive Nalanda University to its former glory, further promoting the region’s rich academic and cultural heritage.
• Odisha Tourism: The government will assist in the development of Odisha’s scenic beauty, temples, monuments, craftsmanship, wildlife sanctuaries, natural landscapes, and pristine beaches, positioning it as a premier tourism destination.

These infrastructure and tourism initiatives underscore the government’s commitment to building a resilient, well-connected, and culturally enriched India, ensuring sustainable development and economic growth across regions.

Priority 8: Innovation, Research & Development

Anusandhan National Research Fund

The government will operationalize the Anusandhan National Research Fund to support basic research and prototype development. This fund will play a pivotal role in fostering innovation and advancing scientific research in India. By providing targeted financial support, the fund aims to encourage breakthroughs in various fields of science and technology, laying the groundwork for future innovations.

Private Sector-Driven Research and Innovation

To spur private sector-driven research and innovation at a commercial scale, the government will establish a financing pool of ₹1 lakh crore. This initiative aligns with the government’s vision of fostering a robust innovation ecosystem where the private sector can take the lead in translating research into commercially viable products and services. The financing pool will help bridge the gap between research and market-ready solutions, driving economic growth and technological advancement.

Expansion of the Space Economy

With the ambitious goal of expanding India’s space economy by five times over the next decade, the government will set up a venture capital fund of ₹1,000 crore. This fund is designed to support startups and innovative ventures within the space sector, enabling India to become a global leader in space technology and exploration. The initiative underscores the government’s commitment to building a thriving space economy that contributes significantly to the nation’s overall economic development.

These initiatives reflect the government’s strategic focus on innovation, research, and development as critical drivers of India’s progress towards becoming a developed nation (“Viksit Bharat”). By supporting both basic research and commercial innovation, the government aims to create a dynamic environment where scientific discoveries can translate into real-world applications, benefiting society and the economy at large.

Priority 9: Next Generation Reforms

Economic Policy Framework

The government will formulate a comprehensive Economic Policy Framework to outline the overarching approach to economic development in India. This framework will set the stage for the next generation of reforms, focusing on creating employment opportunities and sustaining high economic growth. It will serve as a strategic roadmap for advancing India’s economic goals and ensuring long-term prosperity.

Labour Reforms

The government will introduce wide-ranging labour reforms aimed at improving the provision of services related to employment and skilling. A key initiative will be the comprehensive integration of the e-shram portal with other relevant platforms to create a one-stop solution for labour services. Additionally, the Shram Suvidha and Samadhan portals will be revamped to enhance ease of compliance for industries and trade, streamlining processes and reducing bureaucratic hurdles.

Climate Finance Taxonomy

To boost investments in climate adaptation and mitigation, the government will develop a taxonomy for climate finance. This taxonomy will enhance the availability of capital for climate-related projects, ensuring that India can effectively address the challenges posed by climate change while fostering sustainable development.

Foreign Direct Investment and Overseas Investment

The rules and regulations governing Foreign Direct Investment (FDI) and Overseas Investments will be simplified. This simplification aims to facilitate the inflow of foreign capital, prioritize strategic sectors, and promote the use of the Indian Rupee as a currency for overseas investments. These reforms will strengthen India’s position in the global economy and encourage greater participation in international markets.

NPS Vatsalya

The NPS-Vatsalya scheme will be launched to allow parents and guardians to contribute to a pension plan for minors. Upon reaching the age of majority, the plan can be seamlessly converted into a regular National Pension Scheme (NPS) account. This initiative is designed to encourage early financial planning and secure the future of young citizens.

New Pension Scheme (NPS) Reforms

The Committee reviewing the New Pension Scheme (NPS) has made significant progress in its work. The government is committed to evolving a solution that addresses relevant issues while maintaining fiscal prudence, ensuring that the scheme continues to protect the interests of common citizens.

Land Reforms and Digitalization

The government will implement several land-related reforms, including the introduction of a Unique Land Parcel Identification Number (Bhu-Aadhaar) for all lands. This initiative will include the survey and mapping of sub-divisions according to current ownership, linkages to farmers’ registries, and the digitization of land records in urban areas with GIS mapping. Additionally, cadastral maps will be digitized, and a land registry will be established to improve land governance and transparency.

Data Governance and Management

Efforts will be made to improve the governance, collection, processing, and management of data and statistics. These enhancements are critical for informed decision-making and the effective implementation of government policies and programs.

These next-generation reforms reflect the government’s commitment to modernizing India’s economic and social systems, fostering sustainable growth, and ensuring that all citizens benefit from the nation’s progress.

Part B: Tax-Related Proposals in Budget 2024-25

Relief to Salaried Individuals and Pensioners

The Union Budget 2024-25 introduces significant relief measures for the country’s four crore salaried individuals and pensioners. The standard deduction for salaried employees under the new tax regime has been increased from ₹50,000 to ₹75,000. Similarly, the deduction on family pension for pensioners has been enhanced from ₹15,000 to ₹25,000. Additionally, the new tax regime rate structure has been revised, providing benefits of up to ₹17,500 for salaried employees.

Simplified Tax Regime

A key focus of the budget is the simplification of the tax system. The government aims to conduct a comprehensive review of both direct and indirect taxes over the next six months. This will involve simplifying the tax structure, reducing tax incidence and compliance burdens, and broadening the tax base. The Income Tax Act of 1961 will also undergo a comprehensive review to make it more concise, clear, and easier to understand, with a target of reducing disputes and litigation.

New Tax Regime Rate Structure

The revised tax rate structure under the new tax regime is as follows:

• Income up to ₹3 lakh: Nil
• ₹3 lakh – ₹7 lakh: 5%
• ₹7 lakh – ₹10 lakh: 10%
• ₹10 lakh – ₹12 lakh: 15%
• ₹12 lakh – ₹15 lakh: 20%
• Above ₹15 lakh: 30%

Incentives for Investment and Employment

To foster investment and promote employment, the budget abolishes the angel tax for all classes of investors, giving a boost to the start-up ecosystem. The corporate tax rate for foreign companies has been reduced from 40% to 35% to attract more foreign capital. A simpler tax regime is also proposed for foreign shipping companies operating domestic cruises to promote cruise tourism in India.

Capital Gains Taxation

The budget introduces changes in capital gains taxation:

• Short-term gains on certain financial assets will attract a 20% tax rate.
• Long-term gains on all financial and non-financial assets will be taxed at 12.5%.
• The exemption limit for capital gains on certain financial assets has been increased to ₹1.25 lakh per year.
• Listed financial assets held for more than a year and unlisted assets held for more than two years will be classified as long-term assets.

Simplification of TDS and Tax Regime for Charities

The budget simplifies the direct tax regime for charities, merging two tax exemption regimes into one. It also simplifies the TDS rate structure by merging the 5% TDS on many payments into 2% and withdrawing the 20% TDS on repurchase of units by mutual funds or UTI. The TDS rate on e-commerce operators has been reduced from 1% to 0.1%, and the budget decriminalizes delays in TDS payments up to the due date of filing the TDS statement.

Support for the Health Sector and Import Duty Adjustments

The budget provides full customs duty exemptions on three additional cancer drugs: Trastuzumab Deruxtecan, Osimertinib, and Durvalumab. Basic Customs Duty (BCD) on x-ray machine tubes, flat panel detectors, mobile phones, and Printed Circuit Board Assemblies (PCBA) for telecom equipment has been reduced. Additionally, BCD on gold and silver has been reduced to 6%, while that on platinum has been reduced to 6.4%.

Vivad Se Vishwas Scheme 2024

To resolve income tax disputes pending in appeal, the budget introduces the Vivad Se Vishwas Scheme, 2024. This scheme is aimed at reducing litigation and providing certainty in international taxation. The scope of safe harbour rules will be expanded, and the transfer pricing assessment procedure will be streamlined.

Other Notable Proposals

• The Security Transactions Tax (STT) on futures and options of securities is increased to 0.02% and 0.1%, respectively.
• The deduction of expenditure by employers towards NPS has been increased from 10% to 14% of the employee’s salary.
• Immunity from penalty and prosecution is offered to benamidars who provide full and true disclosure under the Benami Transactions (Prohibition) Act of 1988.

These proposals aim to create a more transparent, efficient, and taxpayer-friendly system while encouraging investment, fostering employment, and ensuring sustainable economic growth.