Union Budget 2024 Highlights: Increased STT, Standard Deduction and More

On July 23, 2024, Finance Minister Nirmala Sitharaman presented its 7th consecutive budget, which is a record in India’s history. The budget was primarily focused on Productivity and Resilience in Agriculture, Employment and Skilling, Inclusive Human Resource and Development, and Social Justice, Manufacturing Services, Urban Development, Energy Security, Infrastructure, Innovation and Research & Development, and Next Generation Reforms.

Let us now have a look at the key highlights of Union Budget 2024:

Focus on Youth and Employment

• Skilling and Job Creation: Five schemes aim to train and employ 4.1 crore youth in five years with a ₹2 lakh crore investment.
• Internships: A comprehensive program will offer internships to one crore youth in top companies over five years.
• Wage Support: Employment incentives include one month’s wage support for first-time employees.
• Women’s Empowerment: Women-specific skilling initiatives aim to increase female workforce participation.

Boosting MSMEs and Manufacturing

• Financial Support: Credit guarantee schemes and term loans for machinery purchases will help MSMEs.
• Technology Upgrade: A technology support package will aid MSMEs in adopting new technologies.
• Enhanced Outreach: SIDBI will open 24 new branches to serve MSME clusters better.

Financial Initiatives

• Mudra Loans: Increased loan limit from ₹10 lakh to ₹20 lakh for existing borrowers under the MUDRA scheme.
• Education Loans: Financial support for higher education loans up to ₹10 lakh in domestic institutions.
• IBC Efficiency: An integrated technology system will streamline the Insolvency and Bankruptcy Code (IBC) process.

Investing in Agriculture and Rural Development

• ₹2.66 Lakh Crore Allocation: Dedicated budget allocation for rural development initiatives.
• Agricultural Transformation: Focus on research for improved productivity and climate-resilient crops.
• Natural Farming Initiative: A program aims to introduce natural farming practices to 1 crore farmers over two years.

Infrastructure and Regional Development

• Rental Housing: Public-private partnerships (PPP) to develop rental housing for industrial workers.
• Targeted Support: Special financial allocation of ₹15,000 crore for Andhra Pradesh.
• Regional Infrastructure: New airports, medical facilities, and sports infrastructure are planned for Bihar.

Overall Economic Outlook

• Inflation Control: Target to bring inflation down to around 4%.
• Growth and Stability: India’s economic growth is seen as a positive indicator in the global scenario.
• Consumer Focus: Budgetary measures to boost job creation and consumption are likely to benefit sectors like consumer goods, real estate, and automobiles.

Changes in Direct Tax

• Review of Income Tax Act: The Finance Minister has announced a thorough review of the Income Tax Act.
• Reduced TDS: The TDS rate on e-commerce transactions has been reduced from 1% to 0.1%.
• Elevation in STCG & LTCG: Short-term capital gains (STCG) tax has been set at 20% on selected assets. Long-term capital gains (LTCG) tax has been increased to 12.5% for assets held for over one year.
• Blow to F&O Traders: There has been an increase in the Securities Transaction Tax (STT) on futures and options (F&O) to 0.1% from 0.02%.
• Relief to Salaried Individuals: The standard deduction has been raised to ₹75,000 from ₹50,000, and the deduction on the family pension has been increased to ₹25,000 from ₹15,000.

Also Read: Union Budget 2024 – Highlights on Taxation

Additional Priority Areas

• Nine Focus Areas: The budget prioritises nine key areas, including agriculture, employment, manufacturing, infrastructure, and innovation.
• Women’s Development: Over ₹3 lakh crore allocated for programs empowering women and girls.
• Social Welfare: Extension of PMGKAY scheme to provide food security for over 80 crore people for five years.
• Digitalisation: Development of Digital Public Infrastructure (DPI) applications for various sectors.

Conclusion

Union Budget 2024 has emphasised the nation’s development by prioritising sectors such as Infrastructure, education, and other important sectors.