In this article, we will be covering UNION BUDGET 2024
The Union Budget 2024-25 represents a significant policy framework for India’s continued economic recovery and future growth. The budget focuses on fiscal prudence, infrastructure development, industrial growth, social welfare programs, and legal reforms across taxation, land management, and business regulation. Below is an in-depth analysis of the key features and legal provisions in the Union Budget 2024:
I. Tax Reforms
Taxation remains a central pillar of the Union Budget, with reforms aimed at simplifying compliance, boosting revenue, and reducing litigation.
Direct Tax Reforms:
Personal Income Tax Slabs: Simplification of tax slabs with revised rates that offer relief to middle-class taxpayers. Income between 3 lakh and 5 lakh attracts a 5% tax, 5 lakh to 7 lakh is taxed at 10%, 7 lakh to 10 lakh at 15%, and above 15 lakh at 30%.
Capital Gains Tax: The short-term capital gains tax (STCG) on listed shares and mutual funds is increased from 15% to 20%. Long-term capital gains tax (LTCG) is now 12.5% for all asset categories (previously 10% for equities and mutual funds). Indexation benefits for calculating LTCG have been removed for property, gold, and other assets.
Vivad Se Vishwas Scheme 2024: Aimed at resolving pending tax disputes, this scheme provides leniency in the payment of disputed tax interest and penalties, reducing litigation burden on taxpayers.
Angel Tax: The government has abolished the angel tax provision, which taxed funds raised by startups above their fair market value. This is expected to spur innovation and entrepreneurship.
Tax Deducted at Source (TDS): The TDS rates have been rationalized, reducing it from 5% to 2% on insurance commissions, rent payments, and brokerage commissions. This will ease cash flow for small businesses.
Indirect Tax Reforms:
Goods and Services Tax (GST): GST remains a cornerstone of India’s tax system. The budget proposed rationalizing GST rates across remaining sectors to simplify compliance. Efforts to further expand and reform the GST regime are under consideration.
Customs Duty Adjustments: Several critical sectors have seen customs duty revisions.
Healthcare: Full exemption of customs duty on vital cancer drugs such as Trastuzumab Deruxtecan and Osimertinib.
Electronics: Reduced customs duty on mobile phone components, chargers, and PCBs to foster local manufacturing.
Precious Metals: Customs duty on gold and silver reduced to 6%, while that on platinum is reduced to 6.4%.
Corporate Tax Measures:
Foreign Direct Investment (FDI): Simplified rules for FDI and overseas investments will encourage foreign companies to invest in India, boosting economic growth.
Capital Gains Holding Period: The budget revised the holding periods for capital gains taxation—12 months for listed shares and 24 months for other assets, simplifying capital gains classification.
II. Legal and Regulatory Changes
The Union Budget 2024-25 introduced several legal reforms aimed at improving transparency, governance, and regulatory compliance.
Land Reforms:
Rural Land Management: Introduction of the Bhu-Aadhaar (Unique Land Parcel Identification Number) for all rural lands. This initiative also includes digitization of cadastral maps and establishing a land registry linked to the farmers’ registry, ensuring better access to credit for farmers.
Urban Land Administration: Urban land records will be digitized using GIS mapping technology. This will help streamline property tax administration and improve financial management in urban local bodies.
Company Law Reforms:
Stamp Duty Reforms: States are encouraged to moderate stamp duties, especially for properties purchased by women. This reform is integrated into urban development schemes to promote gender parity in property ownership.
Overseas and Domestic Investments: Simplification of rules governing foreign and domestic investments will reduce regulatory hurdles for businesses, providing an easier environment for FDI.
Labour and Employment Laws:
Employment Incentives: The budget introduces incentives for the manufacturing sector, including wage support and subsidies for employee provident fund (EPF) contributions to encourage formal employment.
Skill Development Programs: The government has announced an ambitious plan to upskill 20 lakh youth over the next five years. This includes upgrading industrial training institutes and providing internships to one crore youth.
III. Infrastructure and Industrial Growth
The 2024-25 budget emphasizes capital expenditure, infrastructure development, and industrial growth to support long-term economic resilience.
Infrastructure Investment:
Capital Expenditure: The government has allocated ₹11.1 lakh crore for infrastructure projects, including roads, railways, and urban development. Long-term interest-free loans worth ₹1.5 lakh crore will be provided to states for infrastructure development.
Energy Sector: The budget promotes sustainable energy through Advanced Ultra Super Critical Thermal Power Plants and small modular nuclear reactors in partnership with the private sector. Additionally, regulations will be created to transition industries to low-carbon practices.
Tourism and Cultural Development:
Religious and Cultural Sites: The development of significant religious corridors like the Vishnupad Temple Corridor and the Mahabodhi Temple Corridor has been announced, along with support for various temples, wildlife sanctuaries, and natural landscapes across the country.
IV. Social Welfare and Empowerment
The budget outlines several social welfare programs aimed at uplifting marginalized communities, women, and youth.
Women Empowerment:
Property Ownership: Stamp duties on property purchases by women are expected to be reduced, fostering greater economic independence for women.
Rural and Agricultural Development:
Agricultural Research: Investments in agricultural research, particularly for climate-resilient crops and improved productivity, are a key focus.
Vegetable Clusters: New vegetable production clusters will be set up near major consumption centers to increase agricultural efficiency.
Health Sector Initiatives:
Exemptions for Cancer Drugs: Full exemption from customs duties on key cancer medications will make life-saving treatments more accessible.
V. Innovation and Technology
A central theme of the 2024 budget is fostering innovation through research, development, and collaboration with the private sector.
Space and Nuclear Research:
Space Economy: A venture capital fund of ₹1,000 crore will be set up to expand India’s space economy fivefold over the next decade.
Nuclear Energy: The budget encourages partnerships with the private sector for the development of small modular reactors and Bharat Small Modular Reactor technologies.
Research and Development:
Anusandhan National Research Fund: This fund will be operationalized to support basic research and prototype development. A separate financing pool of 1 lakh crore will be created to spur private-sector-driven research.
Conclusion
The Union Budget 2024-25 provides a comprehensive blueprint for India’s economic and social advancement. It includes significant reforms across taxation, infrastructure, legal frameworks, and social welfare while emphasizing innovation and sustainable growth. By simplifying laws, enhancing transparency, and promoting investment, the budget aims to position India as a global leader in the coming decade.
