COUN SHIELD
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What is the Union Budget ?
India's Union Budget is defined as an "annual financial
statement" of the estimated receipts and expenditure of the
Government of India, according to article 112 of the
constitution. The budget highlights the financial priorities of the
government and therefore acts as a roadmap for the nation's
finances. It depicts how much money the government plans to
spend and on what areas it intends to do so, while also showing
how much money the government estimates to make through its
activities. As a result, the budget has a direct impact on every
single aspect of the country, spanning from industries to the
common man.
What does the Union Budget consist of ?
The Union Budget is divided into two parts:
1. Revenue Budget: This includes revenue receipts (like
taxes and duties) and revenue expenditure (like
salaries, subsidies, etc.). It shows the government's day-
to-day expenses.
2. Capital Budget: This includes capital receipts (like
loans raised by the government) and capital
expenditure (like investments in infrastructure, etc.). It
shows the government's investments and expenditures
in creating long-term assets.
Why is Union Budget being presented in July this year ?
The Union Budget was presented in July this year as it is an election year. The
budget is usually presented in February, whenever an election year comes, there
will be two budgets presented. One in February before the elections - interim
budget, which is for the period till the election results come in, another one later
in July, for the rest of the financial year after the elections, also known as the
full budget or actual budget.
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Why is the Union Budget usually presented in February?
The Union Budget is usually presented in February as the financial year ends in
the next month on March 31 and new budgetary policies come into effect on
April 1, which is the next financial year.
The budget was traditionally presented on the final working day of February.
But in 2017, the then Union Finance Minister, Arun Jaitley changed this 92-
year-old norm dating back to the colonial era, and started presenting the budget
on February 1, citing that the extra time of one month would help the
government prepare for the new changes for the next financial year.
BUDGET FOCUS
MPLOYMENT
E
DLE CLASS
SKILLING
MID
MSMEs
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KEY HIGHLIGHTS OF
BUDGET 2024-25
1.152 Billion 1.674 Billion 9.775 Billion
Running of civil Development Interest payments
government & spending & net (total markup on
emergency provision landing foreign & domestic
debt)
1.777 Billion 1.014 Billion
Grants & transfers to Pension
provinces
2.122 Billion 1.363 Billion
Defence Affairs & Subsidies
Services
Inflation seen at Total outlay of the
Nominal GDP growth
3.54% budget is
@10.5% in 2024-25 Rs. 48.21 Lakh Cr
in July 2024
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Sector Wise Allocation
Defence 6,21,941 Cr.
Rural
Development 2,65,808 Cr.
Home Affairs 2,19,643 Cr.
Agriculture &
Allied Activities 1,51,851 Cr.
Education, Emplement
1,48,000 Cr.
& Skilling
IT & Telecom 1,28,877 Cr.
Health 90,659 Cr.
Energy 68,769 Cr.
Social Welfare 56,501 Cr.
Commerce & 47,559 Cr.
Industry
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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 Rs. 4.1 crore youth over 5 years.
1. Scheme A - First Timers: One-month salary of up to Rs. 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 a specified
scale directly, both employee and employer, for their EPFO contribution in the first 4
years of employment.
3. Scheme C - Support to employers: Government to reimburse up to Rs. 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 5 years.
1,000 Industrial Training Institutes to be upgraded in hub and speaking
arrangements.
5. New Scheme for Internship in 500 Top Companies to 1 crore youth in 5 years
5
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Nine Budget Priorities in pursuit of 'Viksit Bharat’
Productivity and resilience in Agriculture
Employment and Skilling
Inclusive Human Resource Development & Social Justice
Manufacturing and Services
Urban Development
Energy Security
Infrastructure
Innovation, Research and Development
Next Generation Reforms
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Priority 1: Productivity and resilience in Agriculture
Allocation of Rs.52 lakh crore for agriculture
and allied sectors.
New 109 high-yielding and climate-resilient
varieties of 32 field and horticulture crops
to be released for cultivation by farmer.
1 crore farmers across the country to be
initiated into natural farming, with
certification and branding in next 2 years.
10,000 need-based bio-input resource centers to be established for natural farming.
Digital Public Infrastructure (DPI) for Agriculture to be implemented for coverage
of farmers and their lands in 3 years.
Priority 2: Employment & Skilling
As part of the Prime Minister's package, 3
schemes for 'Employment Linked Incentive'
to be implemented - Scheme A - First Timers;
Scheme B Job Creation in manufacturing;
Scheme C-Support to employers.
To facilitate higher participation of
women in the workforce, working women
hostels and crèches to be established with industrial collaboration, women-specific
skilling programs to be organized, market access for women SHG enterprises to be
promoted.
New centrally sponsored scheme for Skilling under Prime Minister's Package for 20
lakh youth over a 5-year period.
Model Skill Loan Scheme to be revised to facilitate loans up to Rs. 7.5 lakh.
Financial support for loans up to Rs. 10 lakhs for higher education in domestic
institutions.
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Priority 3: Inclusive Human Resource Development and Social Justice
Purvodaya
Industrial node at Gaya to be developed along the Amritsar-Kolkata Industrial
Corridor. Power projects, including the new 2400 MW power plant at Pirpainti, are
to be taken up at a cost of Rs.21,400 crore.
Andhra Pradesh Reorganization Act
Special financial support through
multilateral development agencies of
Rs.15,000 crore in the current financial
year. Industrial node at Kopparthy along
Vishakhapatnam-Chennai Industrial
Corridor and at Orv kal along Hyderabad-
Bengaluru Industrial Corridor.
Women-led development
Total allocation of more than 3 lakh crore for schemes benefitting women and girls.
Pradhan Mantri Janjatiya Unnat Gram Abhiyan
Socio-economic development of tribal families in tribal-majority villages and
aspirational districts, covering 63,000 villages benefitting 5 crore tribal people.
Bank branches in North-Eastern Region
100 branches of India Post Payment Bank to be set up in the Northeast region.
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Priority 4: Manufacturing & Services
Credit Guarantee Scheme for MSMEs in
the Manufacturing Sector
A credit guarantee scheme without
collateral or third-party guarantee in
term loans to MSMEs for purchase of
machinery and equipment.
Credit Support to MSMEs during Stress Period
New mechanism to facilitate continuation of bank credit to MSMEs during their
stress period.
Mudra Loans
The limit of Mudra loans under 'Tarun' category to be enhanced to Rs. 20 lakhs
from Rs.10 lakh for those who have successfully repaid previous loans.
Enhanced scope for mandatory onboarding in
TReDS
The turnover threshold of buyers for
mandatory onboarding on the TReDS
platform to be reduced from Rs. 500
crores to Rs. 250 crores.
MSME Units for Food Irradiation,
Quality & Safety Testing
Financial support to set up 50 multi-product food irradiation units in the MSME
sector.
E-Commerce Export Hubs
E-Commerce Export Hubs to be set up under public-private-partnership (PPP) mode
for MSMEs and traditional artisans to sell their products in international markets.
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Critical Mineral Mission
Critical Mineral Mission to be set up for
domestic production, recycling of critical
minerals, and overseas acquisition of
critical mineral assets.
Offshore mining of minerals
Auction of the first tranche of offshore
blocks for mining, building on the
exploration already carried out.
Digital Public Infrastructure (DPI) Applications
Development of DPI applications in the areas of credit, e-commerce, education,
health, law and justice, logistics, MSME, services delivery, and urban governance.
Priority 5: Urban Development
Transit Oriented Development
Formulation of Transit Oriented
Development plans and strategies to
implement and finance 14 large cities
above 30 lakh population.
Urban Housing
Investment of Rs.10 lakh crore,
including the central assistance of Rs.2.2
lakh crore in next 5 years,
under PM Awas Yojana Urban 2.0 proposed to address the housing needs of 1
crore urban poor and middle-class families
Street Markets
New scheme to support the development of 100 weekly 'haats' or street food
hubs every year for the next 5 years in select cities.
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Priority 6: Energy Security
Energy Transition
Policy document on 'Energy Transition Pathways' to balance the imperatives of
employment, growth and environmental sustainability to be brought out.
Pumped Storage Policy
Policy for promoting pumped storage projects for electricity storage to be brought
out.
Research and development of small and modular nuclear reactors
Government to partner with the private sector for R&D of Bharat Small Modular
Reactor and newer technologies for nuclear energy, and to set up Bharat Small
Reactors.
Advanced Ultra Super Critical Thermal Power Plants
A joint venture proposed between NTPC and BHEL to set up a full scale 800 MW
commercial plant using Advanced Ultra Super Critical (AUSC) technology.
Roadmap for 'hard to abate' industries
Regulations for transition of 'hard to abate' industries from the 'Perform, Achieve
and Trade' mode to 'Indian Carbon Market' mode to be in place.
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Priority 7: Infrastructure
Rs.11,11,111 crore (3.4 % of GDP) to be provided for capital expenditure.
Infrastructure investment by state governments
Provision of Rs.1.5 lakh crore for long-term interest free loans to support states in
infrastructure investment.
Pradhan Mantri Gram SadakYojana (PMGSY)
Launch of phase IV of PMGSY to provide all-weather connectivity to 25,000 rural
habitations.
Irrigation and Flood Mitigation
Financial support of 11,500 crore to projects such as the Kosi-Mechi intra-state link
and other schemes in Bihar.
Government to aid Assam, Himachal Pradesh, Uttarakhand and Sikkim for floods,
landslides and other related projects.
Tourism
Comprehensive development of Vishnupad Temple Corridor, Mahabodhi Temple
Corridor and Rajgir.
Assistance for development of temples, monuments, craftsmanship, wildlife
sanctuaries, natural landscapes and pristine beaches of Odisha.
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Priority 8: Innovation, Research & Development
Anusandhan National Research Fund for basic
research and prototype development to be
operationalised.
Financing pool of Rs.1 lakh crore for spurring
private sector-driven research and innovation at
commercial scale.
Space Economy
Venture capital fund of 1,000 crore to be set up for expanding the space economy by 5
times in the next 10 years.
Priority 9: Next Generation Reforms
Rural Land Related Actions
1. Unique Land Parcel Identification Number
2. (ULPIN) or Bhu-Aadhaar for all lands
3. Digitization of cadastral maps
4. Survey of map sub-divisions as per current
5. Ownership
6. Establishment of land registry
7. Linking to the farmers registry
Urban Land Related Actions
Land records in urban areas to be digitized with GIS mapping
Services to Labour
1. Integration of e-shram portal with other portals to facilitate such one-stop
solution.
2. Open architecture databases for the rapidly changing labour market, skill
requirements and available job roles.
3. Mechanism to connect job-aspirants with potential employers and skill
providers.
NPS Vatsalya
NPS-Vatsalya as a plan for contribution by parents and guardians for minors.
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Indirect Taxes
Maintaining existing GST rates to ensure stable business conditions.
New measures improve GST compliance, resulting in monthly receipts of Rs.1.66
lakh crores and a growing tax base.
Streamline ITC distribution; businesses must adapt.
New penalties for non-compliance in high-risk industries such as tobacco and
pan masala.
Section 74A improves clarity and efficiency in tax assessments.
Improved logistics and faster customs clearance boost international trade.
Customs Duty - Sector Specific 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 and 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%
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Precious Metals
Customs duties on gold and silver reduced to
6% and that on platinum to 6.4%.
Other Metals
BCD removed on ferro nickel and blister copper.
BCD removed on ferrous scrap and nickel cathode.
Concessional BCD of 2.5% 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%
Plastics
BCD on flex banners increased from 10 to 25%.
Telecommunication Equipment
BCD increased from 10 to 15% on PCBA of specified telecom equipment.
Trade facilitation
For promotion of domestic aviation and boat
& ship MRO, time for export of goods imported
for repairs extended from 6 months to one year.
Time limit for re-import of goods for repairs
under warranty extended from 3 to 5 years.
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Critical Minerals
25 critical minerals fully exempted from
custom duties. BCD on two critical
minerals reduced.
Solar Energy
capital goods for use in manufacturing of solar
cells and panels exempted from customs duty.
Marine Products
BCD on certain broodstock, polychaete
worms, shrimp and fish feed reduced to 5%.
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%.
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OLD TAX RATES NEW TAX RATES
Slabs Rates Slabs
Rates
Up to Rs 3,00,000 NIL Up to Rs 3,00,000 NIL
Rs 3,00,000 to 6,00,000 5% Rs 3,00,001 to 7,00,000 5%
Rs 6,00,001 to 9,00,000 10% Rs 7,00,001 to 10,00,000 10%
Rs 9,00,001 to 12,00,000 15% Rs 10,00,001 to 12,00,000 15%
Rs 12,00,001 to 15,00,000 20% Rs 12,00,001 to 15,00,000 20%
30%
Above Rs 15,00,000 30% Above Rs 15,00,000
Standard Deduction Rs.50,000 Standard Deduction Rs.75,000
Family Pension Rs.15,000 Family Pension Rs.25,000
Capital Gains Tax Capital Gains Tax
Short Term Capital Gain 15% Short Term Capital Gain 20%
Long Term Capital Gain 10% Long Term Capital Gain 12.5%
Exemption on Capital Gain Rs.1,00,000 Exemption on Capital Gain Rs.1,25,000
Securities Transaction Tax Securities Transaction Tax
Options 0.1%
Options 0.0625%
0.0125% Futures 0.02%
Futures
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Simplification for charities and of TDS
Two tax exemption regimes for charities to be merged into one.
5% TDS rate on many payments merged into 2% TDS rate.
20% TDS rate on repurchase of units by mutual funds or UTI withdrawn.
TDS rate on e-commerce operators reduced from 1 to 0.1%.
Delay for payment of TDS up to due date of filing statement decriminalized.
Simplification of Reassessment
Assessment can be reopened beyond 3 years up to 5 years from the end of
assessment year only if escaped income is Rs. 50 lakh or more.
In search cases, the time limit reduced from 10 to 6 years before the year of
search.
Simplification and rationalization of capital gains
Short term gains on certain financial assets to attract a tax rate of 20%.
Long-term gains on all financial and non-financial assets to attract a tax rate
of 12.5%.
Exemption limit of capital gains on certain financial assets increased to
Rs.1.25 lakh per year.
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Sovereign Gold Bonds
SGBs will continue to be considered as long-term capital assets if
held for more than 12 months. SGBs transferred on or
after 23.07.2024 at a party rate of 12.5%
under section 112 without any indexation
benefits.
SGBs held for 12 months or less will
continue to be considered as short-term
capital assets and tax at applicable slab
rates.
Taxpayer services
All remaining services of customs and income
tax including rectification and order giving
effect to appellate orders to be digitalized
over the next 2 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 Rs.60
lakh, Rs.2 crore, and Rs.5 crore respectively.
Safe harbour rules expanded to reduce litigation
and provide certainty in international taxation.
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Employment and Investment
Angel tax for all classes of investors
abolished to bolster start-up ecosystem.
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 on foreign companies reduced
from 40 to 35%.
Deepening tax base
Security Transactions Tax on options
increased to 0.1% and 0.0625% and futures
of securities increased to 0.02% and
0.0125% respectively.
Income received on buyback 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% of the employee's salary.
Non-reporting of small movable foreign
assets up to Rs. 20 lakh de-penalized.
Other major proposal in Finance Bill
Equalization levy of 2% withdrawn.
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Indexation
In Budget 2024, Sitharaman had suggested a
reduction of the LTCG tax on property from
20% to 12.5%, while eliminating the benefit of
indexation.This proposal had a major impact on
homeowners since indexation allows taxpayers
to adjust the original purchase cost for inflation
before calculating the capital gains, ultimately
reducing the overall tax payable. Following extensive discussions on social media and
representations from various stakeholders in the real estate industry, the Union
government has presented homeowners with two options. Learn about the recent
alterations in the capital gains tax on property.
How removing Indexation in Budget-2024 will affect capital gains? (Profit)
Sold with Profit With Indexation@20% No Indexation@12.5%
Purchase Price Of Apartment Rs. 50,00,000 Rs. 50,00,000
Date of Purchase 01 January 2009 01 January 2009
Date Of Sale 23 July 2024 23 July 2024
Inflation Adjusted Value Rs. 1,32,48,175 Rs. 50,00,000
Selling Price Rs. 1,50,00,000 Rs. 1,50,00,000
Capital Gain Rs. 17,51,825 Rs. 1,00,00,000
Tax on Capital Gain Rs. 3,50,365 Rs. 12,50,000
Tax Difference (Old vs New) Rs. 8,99,635
Net Profit Rs. 14,01,460 Rs. 5,01,825
Budget-2024 LTCG rate reduced from 20% to 12.5%, indexation removed
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Amendment in the Indexation
According to the Finance (No. 2)
Bill, 2024 introduced in the Lok
Sabha, "Provided further that in
the case of transfer of a long-term
capital asset, being land or
building or both, which is acquired
before 23rd day of July 2024,
where the income tax computed
under item (B) exceeds the income-
tax computed in accordance with the provisions of this Act, as they stood
immediately before their amendment by the Finance (No.2) Act. 2024, such excess
shall be ignored."
The proposed amendment allows taxpayers to choose between a 12.5% LTCG
rate without indexation or a 20% rate with indexation for properties acquired
before July 23, 2024.
Indexation and Non-indexation
Let us now understand, with the help of an example, how indexation works in the
case of non-equity mutual funds. Assuming you have invested Rs 1 lakh in 2001
and the Cost Inflation Index (CII) at that time was 100 and you plan on selling
that asset today. The current CII is 317. Your purchase cost will get adjusted to
around Rs 3.17 lakh (Rs 1 lakh x 317/100).
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Key Tax changes in the Union Budget
Tax Slabs
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COUNTSHIELD MENTORS
CA Ratti Rani Prof.D.Makwani
COUNTSHIELD APEX TEAM
Nishi Bhomawat Nandini Raj Pratiksha Kumari
(Head) (Co-Head) (Co-Head)
CONTENT RESEARCHERS
Koushik Agarwal Wamini Bhawnani Zeal Maisheri
EDITORS
Wamini Bhawnani Riya Mandot Sakshi Mehta Labddhi Nagsheth Koushik Agarwal
DESIGNERS
Dishank Garg Sakshi Mehta Riya Mandot
TEAM COUNTSHIELD 2024-2025
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