Budget Snapshot.

FM Nirmala Sitharamans eight consecutive budget:

Our economy is the fastest growing economy. The next five years presents a unique opportunity to India.

Budget focuses on growth infrastructure and middle class.
 

This budget focuses on Ten broad areas:

1. Agriculture is the first engine

• PM dhan dhanya krishi yojna- to develop 100 districts, improve irrigation facilities , availability of long term and short term credits

• To benefit 1.7 crore farmers

• To address under employment in agriculture and rural areas

• To focus on rural youth, women farmers

• Atma nirbharta in edible oils:

• Cultivating areas and better affordability

• The govt to launch 6 year mission in this area

• Central agencies like Nafed to procure such

• Comprehensive program of vegetable and fruits: people becoming aware of healthy and nutritious foods

• Appropriate institutional mechanism to set up

• Makhana board in Bihar- to be established and to promote to Makhana farmers

• Pest resistance and climate resistance

• India’s ranks second largest in fish production- promote harnessing of fisheries

• Mission of cotton productivity to promote extra long cotton staple varieties - to promote textile sector

• Kishan Credit cards- for 7.7 crore farmers

• Loans taken to be enhanced from 3 lacs to 5 lacs

• To augment urea supply- plant to be established in Assam

• India posts to be transformed as a major logistics organisation.

2. MSME as second engine

• 5.7 crores msmes

• Generating 36% as manufacturing contributions

• 1 crores are registered

• Responsible for 45% of exports

• Various schemes like credit guarantee covers to be enhanced

• For startup’s, loans enhanced for 27 focus sectors

• For well run exporter msmes, loan to be enhanced

• For micro entt regd on Udyam portal- loan covers and credits to be enhanced

• New fund of funds with expanded scope to be set up

• Term loans to be provided

• Online capacity building and managerial skills to be enhanced

• In labor intensive sectors, to enhance quality

• For footwear industry, non leather quality footwear - scheme to be launched

• For toys sector- implement a scheme to make india a global hub for toys - to create high quality make in india brand

• To establish Unit in Bihar To support food technology, to skill entrepreneurship

• Govt to set up national manufacturing mission to support manufacturers

• To support clean tech manufacturing, ev cells, high turbines , grid scale batteries

3. Investment as third engine

• Investing in people- making women, girls saksham with nutritional supports

• 50,000 Atal tinkering labs to set up in 5 years

• Broadband connectivity to all govt secondary schools in rural areas

• To provide digital books to students

• National centre for excellence in skilling- 5 centres to be set up - skill certification

• Expansion in capacity in IITs

• Centre of excellence in AI for education- three centres of AI were announced in 2023

• Expansion of medical education- next year, 10,000 additional seats to be added in medical colleges making it 75000 seats in next 5 years

• 200 centres to be established in 2025-26

• To assist urban poor and workers, scheme to be established

• Enhanced loans from banks and UPI linking

• Social security scheme for online workers and gig workers - registration on e shram portal - to support 1 crore gig workers

• States to be encouraged too

• Support to states for infra structure - for capital expenditure

• To plough back capital of 10 lac crores back in infrastructure

• Urban structure reforms- to set up urban challenge fund- for creating better water and sanitation facility - 50% cost to be funded from bonds, bank loans

• Power sector reforms- to increase capacity of electricity companies

• Nuclear energy mission - development of 100 giga watt - amendments to nuclear energy act to be proposed - outlay of 20,000 crores for nuclear reactors

• Ship building- financial policy to be revamped - large ships to be included in infra harmonised list - to increase capacity of ships

• Maritime development fund with corpus of 25000 crores to be set up - to have 49% govt contribution

• Udaan- connected 88 ports and operationalised - to take it 120 additional destinations- to support helipads and smaller airports - to add 4 crore flyers

• Greenfield airports in Bihar

• Western Kosi canal project - benefiting farmers of Mittranchal Bihar region

• Mining - policy

• Swami- 20,000 units completed and another 40,000 units to be completed by 2026

• Swami fund 2 to be set up for 15000 crore rupees

• PM Gati shakti data - enhanced

• Top tourist destination sites to be developed in various states

• Organising skill development program

• Providing performance linked loans

• Special focus on destinations on life of Lord Buddha

• Investing in innovation- allocating 20,000 crores rupees for this

• In next 5 years, 10,000 fellowships to be enhanced in IITs tech research

• Geo special infra to be set up

• Modernisation of land records,

• Investment limit for MSME classification to be made 2.5 times

• Turnover limits for MSME classification to be doubled

• Will give MSMEs confidence to grow and create jobs for youth

4. Export as fourth engine

• A digital public infra Bharat Trade Net to be set up- BTN to be aligned with international practices

• Sectors to be identified

• Huge opportunity to industries

• Govt to support domestic

• National framework to support states to be set up- building bye law reforms

• Cargo screening to be enhanced

• Faceless assessment, Vivad se Vishwas Scheme, self assessments- Trust first Scrutinise later

• To introduce direct tax bill next week

• Services of india post payment bank to be set up

• Public sector banks to support

• Central KYC registry to be rolled out in 2025

• Company mergers for fast tracking to be simplified

• To encourage sustained investment, current model BIT to be made more friendly

• Regulations to keep up with global policy regulations

• Impact of current financial regulations to be seen

• More than 180 criminal provisions were de criminalised

• Fiscal deficit to be checked and reduced

• Revised estimates of receipts provided which is 4.8% of GDP

• for 2025-26, the estimates are provided and fiscal deficit estimates at 4.4% of GDP

Indirect taxes-

• Aim to rationalise duty structure

• Provide relief to common people

• Removal of 7 tariff rates - only 8 tariff rates to remain

• Appropriate cess on few items

• Levy not more than one cess and surcharge- exempt social surcharge

• Provide relief to patients- full exemption of 36 life saving cancer drugs

• Full exemption and rationalisation of manufacturing of above drugs

• Support to domestic manufacturing - promotion of agro textiles, revise BCD rates on knitted fabrics

• Electronic goods - to increase duty BCD on flat panel display from 10 to 20%

• For open cells, duty to be reduced

• Custom duty cut for lithium ion batteries

• Reduce BCD on Telecommunication

• Extend time period from 6 months to 12 months

• Exempt BCD on blue leather

• Reduce BCD on frozen fish paste

• Reduce BCD on fish hydro

• Ethernet to become cheaper

• Provisional assessment of customs - time limit fixed to 2 years maximum extendable by 1 year

• Scheme to Pay duty with interest but without penalty - to incentivise self declaration - not applicable for audit proceedings

Direct tax

• For new income tax bill to carry forward same spirit of Nyaya

• New bill to be simple to understand

• Govt had taken steps

• Personal income tax reforms with special focus on middle class

• Ease of Doing business

• Rationalisation of tds and tcs

• Reducing number of tds and tcs rates

• Increasing threshold limits

• Annual limit of 2.40 lacs increased to 6 lacs for rental tds

• TCS on remittances under LRS to be increaed to 10 lacs fm 7 lacs

• Both tds and tcs applicable on sale of goods- to remove tcs - only tds is applicable

• Higher tds rates only on non pan cases

• Late filing of tcs returns also de criminalised

• Updated ITR U - 90 Lac taxpayers filed

• Extend Updated returns time limit to 4 years

• Reduce compliance burden for small charitable organisations by extending time to 10 years

• For self occupied property, benefit of 2 self occupied properties allowed

• Introduce arms length price for block period of 3 years for transfer pricing

• NSS - exempt withdrawals after 29.7.2024

• Appellate orders to be digital

• 33000 tax payers availed of vivad se Vishwas scheme

• Presumptive taxation to non residents providing service to residents for electronic purposes

• Benefit of tonnage tax scheme extended

• Incorporation of start ups - period extended to 5 years

• IFSC- specific benefits to insurance offices, cut off date extended to 31.3.2030

• Provide tax certainty on gains from security - date of making investment extended to 2030

• Middle class provide strengths to the nation building - in recognition of their contributions- the threshold exemption limit raised to 7 lacs- now raised to 12 lacs under new tax regime

• Average income of 1 lacs under new regime with standard deduction of 75000

• This will boost consumption

Limit for tax deduction on interest for senior citizens to be doubled from 50,000 to 1 lakh
Tax rates
0 to 4 lacs nil
4 to 8 lacs 5%
8 to 12 lacs 10%
12 to 16 lacs 15%
16 to 20 lacs 20%
20 to 24 lacs 25%
Above 24 lacs 30%

Revenue of 1 Lac crore to be forgone in direct taxes

CA Jatin Minocha

minochajatin@yahoo.co.in

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