Union Budget 2024 Changes: Explained in short

Finance Minister Nirmala Sitharaman presented her record seventh consecutive Union Budget 2024-25 today, making history as the first finance minister to do so. This year’s budget did bring some tax slab changes, but the middle class and salaried class is disappointed, yet again. 

Here are the key changes - 

1. New Tax Regime Changes:

• Standard deduction increased from ₹50,000 to ₹75,000. This increases your Zero tax income to 7,75,000 Rs.
• Income tax slabs are also changed for the new regime. Effectively making income upto Rs. 8,25,000 tax free. The New Income Tax Slabs – Budget 2024                        

2. Long-term Capital Gains Tax Exemption:

• In the Budget 2024, the most infuriating change that happened for the middle class/investor class was the change in capital gains taxation.
• Nirmala Tai did increase the exemption limit for long-term capital gains (LTCG) from ₹1 lakh to ₹1.25 lakh, but increased the tax rate to 12.5% from existing 10%. 
• Similarly, the Short Term Capital Gain (STCG) Tax rate was increased to 20% from the existing 15%.

3. Indexation Benefit Changes

• The Budget has eliminated the indexation benefits for long-term capital gains on Property, Gold and certain other asset classes. 
• Previously, investors could adjust the purchase price of their assets for inflation, reducing taxable gains. 
• Without this benefit, the taxable amount for long-term capital gains may increase, potentially leading to higher tax liabilities for investors.
• So if you are trying to sell your old property or gold, beware of this new change as this will impact your take home money by a lot.

4. Gold, Silver, Mobile Custom Duty Changes

• Customs Duty on Gold and Silver:

The customs duty on gold and silver has been reduced to 6%, aimed at making these precious metals more affordable and potentially increasing demand while reducing the incentive for smuggling.

5. Employment and Skilling

• Youth Schemes:

The government has announced five schemes targeting 4.1 crore youth over the next five years, with a central outlay of ₹2 lakh crore. These schemes are designed to enhance employment opportunities and skill development.

• Internship Scheme:

An internship scheme will be launched to place one crore youth in top companies, providing valuable work experience and enhancing employability.

• Employment-linked Incentives:

The government will offer one month’s wage support for first-time employees, encouraging companies to hire new talent.

• Women-specific Skilling Programs:

Special programs aimed at boosting women’s participation in the workforce through targeted skill development initiatives will be introduced.

6. MSME and Manufacturing Support

• Credit Guarantee Scheme:

A revamped credit guarantee scheme will provide easier access to finance for MSMEs, encouraging entrepreneurship and business expansion.

• Term Loans for Machinery Purchase:

The government will facilitate term loans specifically for purchasing machinery, helping MSMEs modernize and increase productivity.

• Technology Support Package:

A comprehensive technology support package will be introduced to help MSMEs adopt advanced technologies, enhancing their competitiveness.

• SIDBI Expansion:

SIDBI will open 24 new branches to better serve MSME clusters, providing closer and more effective support.

7. Economic Growth and Inflation

The Budget indicates that inflation is moving towards the target of 4%, reflecting ongoing efforts to stabilize prices. India’s economic growth remains robust, described as a “shining exception” amid global uncertainties, highlighting strong economic fundamentals.

8. Agriculture and Rural Development

• Rural Development Allocation:

A provision of ₹2.66 lakh crore has been made for rural development, focusing on improving infrastructure and living standards in rural areas.

• Agricultural Research:

The government plans to transform agricultural research with a focus on enhancing productivity and developing climate-resilient crops.

• Natural Farming Initiative:

An initiative to introduce one crore farmers to natural farming methods over the next two years aims to promote sustainable agricultural practices.

9. Telecom Sector Boost

• Telecom Projects Funding:

The government has allocated ₹1.28 lakh crore for telecom projects, with a significant portion directed towards BSNL. This funding aims to improve telecom infrastructure and expand connectivity across the country