BUDGET 2024-25 highlights
The focus of the Budget is on Employment, Skilling, MSMEs and the middle class.
Shipping
Ownership, leasing and flagging reforms will be implemented for the shipping industry to improve the share of Indian shipping and generate more employment, said the Union Minister of Finance and Corporate Affairs, Mrs Nirmala Sitharaman, while presenting the Union Budget 2024-25 in Parliament on Tuesday.
Support for promotion of MSMEs
Mrs Sitharaman said that the Budget provides special attention to MSMEs and manufacturing, particularly labour-intensive manufacturing. A separately constituted self-financing guarantee fund will provide, to each applicant, guarantee cover up to ?100 crore, while the loan amount may be larger. Similarly, public sector banks will build their in-house capability to assess MSMEs for credit, instead of relying on external assessment. She also announced a new mechanism for facilitating continuation of bank credit to MSMEs during their stress period.
Package of PM’s five schemes for Employment and Skilling
* Prime Minister’s Package of 5 Schemes and Initiatives for employment, skilling and other opportunities for 4.1 crore youth over a 5-year period.
1. Scheme A - First Timers: One-month salary of up to `15,000 to be provided in 3 installments to first-time employees, as registered in the EPFO.
2. Scheme B - Job Creation in manufacturing: Incentive to be provided at specified scale directly, both employee and employer, with respect to their EPFO contribution in the first 4 years of employment.
3. Scheme C - Support to employers: Government to reimburse up to `3,000 per month for 2 years towards EPFO contribution of employers, for each additional employee.
4. New centrally sponsored scheme for Skilling
* 20 lakh youth to be skilled over a 5-year period.
* 1,000 Industrial Training Institutes to be upgraded in hub and spoke arrangements.
5. New Scheme for Internship in 500 Top Companies to 1 crore youth in 5 years
Indirect Taxes GST
* Buoyed by GST’s success, tax structure to be simplified and rationalised to expand GST to remaining sectors.
Sector specific customs duty proposals
Medicines and Medical Equipment
* Three cancer drugs namely TrastuzumabDeruxtecan, Osimertinib and Durvalumab fully exempted from custom duty.
* Changes in Basic Customs Duty (BCD) on x-ray tubes & flat panel detectors for use in medical x-ray machines under the Phased Manufacturing Programme.
Mobile Phone and Related Parts
* BCD on mobile phone, mobile Printed Circuit Board Assembly (PCBA) and mobile charger reduced to 15 per cent.
Precious Metals
* Customs duties on gold and silver reduced to 6 per cent and that on platinum to 6.4 per cent.
Other Metals
* BCD removed on ferro nickel and blister copper.
* BCD removed on ferrous scrap and nickel cathode.
* Concessional BCD of 2.5 per cent on copper scrap.
Electronics
* BCD removed, subject to conditions, on oxygen free copper for manufacture of resistors.
Chemicals and Petrochemicals
* BCD on ammonium nitrate increased from 7.5 to 10 per cent.
Plastics
* BCD on PVC flex banners
increased from 10 to 25 per cent.
Telecommunication Equipment
* BCD increased from 10 to 15 per cent on PCBA of specified telecom equipment.
Trade facilitation
* For promotion of domestic aviation and boat & ship MRO, time period for export of goods imported for repairs extended from six months to one year.
* Time-limit for re-import of goods for repairs under warranty extended from three to five years.
Critical Minerals
* 25 critical minerals fully exempted from customs duties.
* BCD on two critical minerals reduced.
Solar Energy
* Capital goods for use in manufacture of solar cells and panels exempted from customs duty.
Marine products
* BCD on certain broodstock, polychaete worms, shrimp and fish feed reduced to 5 per cent.
* Various inputs for manufacture of shrimp and fish feed exempted from customs duty.
Leather and Textile
* BCD reduced on real down filling material from duck or goose.
* BCD reduced, subject to conditions, on methylene diphenyl diisocyanate (MDI) for manufacture of spandex yarn from 7.5 to 5 per cent.
Direct Taxes
* Efforts to simplify taxes, improve tax payer services, provide tax certainty and reduce litigation to be continued.
* Enhance revenues for funding development and welfare schemes of government.
*58 per cent of corporate tax from simplified tax regime in FY23, more than two-thirds taxpayers availed simplified tax regime for personal income
tax in FY 24.
Simplification for Charities and of TDS
*Two tax exemption regimes for charities to be merged into one.
* 5 per cent TDS rate on many payments merged into 2 per cent TDS rate.
* 20 per cent TDS rate on repurchase of units by mutual funds or UTI withdrawn.
* TDS rate on e-commerce operators reduced from one to 0.1 per cent.
* Delay for payment of TDS up to due date of filing statement decriminalized.
Simplification of Reassessment
* Assessment can be reopened beyond three years upto five years from the end of Assessment Year only if the escaped income is ? 50 lakh or more.
* In search cases, time limit reduced from ten to six years before the year of search.
Simplification and Rationalisation of Capital Gains
* Short term gains on certain financial assets to attract a tax rate of 20 per cent.
* Long term gains on all financial and non-financial assets to attract a tax rate of 12.5 per cent.
* Exemption limit of capital gains on certain financial assets increased to ? 1.25 lakh per year.
Tax Payer Services
*All remaining services of Customs and Income Tax including rectification and order giving effect to appellate orders to be digitalized over the next two years.
Litigation and Appeals
* ‘Vivad Se Vishwas Scheme, 2024’ for resolution of income tax disputes pending in appeal.
* Monetary limits for filing direct taxes, excise and service tax related appeals in Tax Tribunals, High Courts and Supreme Court increased to ?60 lakh, ?2 crore and ?5 crore respectively.
*Safe harbour rules expanded to reduce litigation and provide certainty in international taxation.
Employment and Investment
* Angel tax for all classes of investors abolished to bolster start-up eco-system.
* Simpler tax regime for foreign shipping companies operating domestic cruises to promote cruise tourism in India.
* Safe harbour rates for foreign mining companies selling raw diamonds in the country.
* Corporate tax rate on foreign companies reduced from 40 to 35 per cent.
Deepening tax base
* Security Transactions Tax on futures and options of securities increased to 0.02 per cent and 0.1 per cent respectively.
* Income received on buy back of shares in the hands of recipient to be taxed.
Social Security Benefits
* Deduction of expenditure by employers towards NPS to be increased from 10 to 14 per cent of the employee’s salary.
* Non-reporting of small movable foreign assets up to ?20 lakh de-penalised.
Other major proposal in Finance Bill
* Equalization levy of 2 per cent withdrawn.
Changes in Personal Income Tax under new tax regime
* Standard deduction for salaried employees increased from ?50,000 to ?75,000.
* Deduction on family pension for pensioners enhanced from ?15,000/- to ?25,000/-
* Revised tax rate structure:
0-3 lakh rupees Nil
3-7 lakh rupees 5 per cent
7-10 lakh rupees 10 per cent
10-12 lakh rupees 15 per cent
12-15 lakh rupees 20 per cent
Above 15 lakh rupees 30 per cent
* Salaried employee in the new tax regime stands to save up to ? 17,500/- in income tax.