Modi 3.0 government announced the first full budget of its regime. Presented by FM Nirmala Sitharaman, the Budget 2024 aims to showcase financial and economic plans to grow and push the country towards a bigger economy. For many, the focal point around the budget is always the taxation changes and we did get some in this full budget. Read more to find out about the key income tax changes, capital gain rate changes, key sectors to watch, and major announcements from Budget 2024 Highlights.
Why was the Budget announced twice in 2024?
Since it was an election year, the incumbent government’s previous Budget announced in Feb was an Interim Budget. Now with the election done, the full government, Modi 3.0 has announced the first full budget of their tenure.
Also read: Budget 2024 Live: Key Announcements, New Income Tax Rates, Market Update
What are the Major Takeaways from the Budget 2024 Highlights?
Taxation Changes:
- Revised Income Tax Slab Rates: FM Nirmala Sitharaman has announced changes in the tax slabs for the new regime. The changes will be applicable for the FY24-25 and will be used to compute Income Tax when filing it next year. The new revised slab rates are:
| Income Tax Slab | New Regime Slab Rates for FY 24-25 (AY 25-26) |
| Up to Rs. 3 lakh | Nil |
| Rs. 3,00,000 -Rs. 7,00,000 | 5% (Rebate u/s 87A available) |
| Rs. 7,00,001 lakh to Rs. 10,00,000 | 10% |
| Rs. 10,00,001 to Rs. 12,00,000 | 15% |
| Rs. 12,00,001 to Rs. 15,00,000 | 20% |
| Above Rs 15,00,000 | 30% |
- Standard Deduction: The standard deduction amount under the New Regime is now increased to Rs 75,000 from the current Rs 50,000. With the increased standard deduction limit, now users with income up to Rs 7.75 lakhs will not have to pay any tax on their income after the inclusion of the Sec 87A rebate.
- Long-term Capital Gain(LTCG): The long-term capital gain limit has been increased to Rs 1.25 lakh per year. It was previously Rs 1 lakh. This provides relaxation to investors and reduces their tax liabilities. Also, the LTCG rate has been changed to 12.5% from 10%. So investors having LTCG of more than Rs 1.25 lakh will now have to pay tax at the rate of 12.5% on the gains above the exemption limit.
Focus Areas of Development:
- Tourism: The government aims to develop corridors at Vishnupad Temple and Mahabodhi Temple following the model of Kashi Vishwanath Temple. The government will also focus on the development of Nalanda as a tourist center in Bihar. They also aim to assist Odisha in building a tourism hub.
- Infra and Rural Development: The government also announced a Rs 26,000-cr boost to road connectivity projects and Rs 2.66 lakh crore for rural development. These aim to develop connectivity via road and infra and further aim to provide a seamless connection between rural and urban areas.
- Space Economy, a New Frontier: Government to focus on space economy with plans to expand the space economy by 5x in the next 10 years. The government will set up a venture capital fund of Rs 1,000 cr to achieve this goal.
Citizen Welfare and Growth:
- Affordable Housing under PM Awas Yojana Urban 2.0: The PM Awas Yojana scheme will address the housing needs of the urban poor and middle class with an investment of Rs 10 lakh crore. They further aim to allocate Rs 2.2 lakh crore for housing development to make housing affordable for citizens.
- Employment and Upskilling: The Finance Minister launched new schemes under the PM’s package to boost employment through skill development. These schemes will be linked to EPFO registrations and aim to support first-time employees. When new workers join any formal sector job, they will receive one month’s salary, up to Rs 15,000, in three installments through direct benefit transfer (DBT). To qualify, the salary limit is Rs 1 lakh per month, and this initiative is expected to help 2.1 lakh young people. She also announced a Prime Minister’s package consisting of five schemes focused on employment and skill development, with a total allocation of Rs 2 lakh crore. This year, Rs 1.48 lakh crore has been earmarked specifically for initiatives in education, employment, and skill enhancement.
- Flood Control and Natural Calamity Protection: The Budget recognized that Bihar often experiences floods and mentioned that plans to build flood control structures in Nepal haven’t moved forward yet. The government will provide about Rs 11,500 crore for this. Assam, which has floods every year, will get help for flood management and related projects. Himachal Pradesh, which has suffered a lot from floods, will also get support for rebuilding through various international aid. Uttarakhand, which has been heavily impacted by landslides and heavy rain, will receive the needed assistance as well.
Sectors to Watch Post Budget 2024
Following are the top sectors to watch post Budget 2024:
- Travel and Tourism: The Union Budget 2024-25 highlights the government’s efforts to position India as a global tourist destination. There is a clear emphasis on promoting religious tourism and enhancing domestic tourism infrastructure. The budget focuses on developing iconic religious sites in Bihar, Nalanda, and Odisha, aiming to transform them into world-class pilgrimage and tourist destinations. This showcases a strong support for the tourism sector.
- FMCG/Agriculture: The 2024 budget’s social sector measures are likely to boost rural demand, benefiting FMCG companies. Increased allocations for schemes like MGNREGA and agricultural support are expected to improve disposable incomes. The substantial provision of INR 2.66 lakh crore for rural development and the Rs 26,000 crore investment in road connectivity projects will enhance market access and distribution networks, facilitating better reach for FMCG products in rural areas.
- Power & Energy: The budget’s emphasis on energy security and climate resilience is commendable. The PM Surya Ghar Muft Bijli Yojana aims to install rooftop solar panels on 1 crore homes, providing up to 300 units of free electricity per month. Expanding the list of exempted capital goods for solar energy projects is crucial for accelerating the energy transition. Additionally, investments in nuclear research and development and climate finance for hard-to-abate industries strengthen this comprehensive strategy.
- Infrastructure & Housing: FM Nirmala Sitharaman announced a Rs 2.2 lakh crore boost for urban housing and plans to expand the Pradhan Mantri Awas Yojana (PMAY) by adding provisions for 3 crore more houses under the scheme. Retaining the capital expenditure for infrastructure as outlined in the interim budget reinforces strong fiscal support for the infrastructure sector.
- Space & Defence: The Union Budget’s vision to grow India’s space economy fivefold in the next decade demonstrates the government’s strong commitment to this sector. The announcement of a Rs 1000 crore venture capital fund is a significant step forward, addressing the funding challenges faced by nascent ventures in this capital-intensive domain.
Wrapping Up
Budget 2024, or the first full budget of the Modi 3.0 regime proposes to showcase a strategic roadmap aimed at driving India towards robust economic growth and development. The comprehensive reforms and allocations highlight the government’s commitment to addressing key challenges and improving the quality of life for all citizens. By focusing on critical areas like taxation, infrastructure, education, sustainability, and tourism, the budget sets the stage for a prosperous future. As we move forward, the sectors of Budget 2024 highlights will play a crucial role in shaping India’s economic landscape.
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Disclaimer: This blog has been written exclusively for educational purposes. The sectors mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions. SBNRI does not intend to predict future returns, please read all related documents before investing.
FAQs
What are the main points of the budget 2024?
The major focus on the Budget 2024 was on nine priorities for this year and the coming years, i.e. Productivity in Agriculture, Employment and skilling, HRD & social justice, Mfg & services, Urban development, Energy security, Infra, Innovation-R&D, Next generation reforms.
What about MSME in budget 2024?
FM Nirmala Sitharaman provided a focus for MSMEs in Budget 2024 by supporting MSMEs through a credit guarantee scheme and improved credit assessment models by public sector banks.
What is the new tax regime in 2024?
FM Nirmala Sitharaman has announced changes in the tax slabs for the new regime. The changes will be applicable for the FY24-25 and will be used to compute Income Tax when filing it next year. The new revised slab rates are:
| Income Tax Slab | New Regime Slab Rates for FY 24-25 (AY 25-26) |
| Up to Rs. 3 lakh | Nil |
| Rs. 3,00,000 -Rs. 7,00,000 | 5% (Rebate u/s 87A available) |
| Rs. 7,00,001 lakh to Rs. 10,00,000 | 10% |
| Rs. 10,00,001 to Rs. 12,00,000 | 15% |
| Rs. 12,00,001 to Rs. 15,00,000 | 20% |
| Above Rs 15,00,000 | 30% |
How many budgets did Nirmala Sitharaman present?
The Budget 2024 presented by FM Nirmala Sitharaman was the 7th consecutive budget presented by her.
What is the new standard deduction available?
The standard deduction amount under the New Regime has now increased to Rs 75,000 from the current Rs 50,000. With the increased standard deduction limit, now users with income up to Rs 7.75 lakhs will not have to pay any tax on their income after the inclusion of the Sec 87A rebate.
