Indian Budget 2024 EXPLAINED in 10 minutes | Real Winners & Losers

Summary

The 2024 Indian budget, presented by Finance Minister Nala Sitaraman, focuses on job creation, skill development, and boosting domestic manufacturing. Key highlights include revised income tax slabs, increased standard deduction, changes in capital gains tax, abolition of angel tax for startups, support for MSMEs, and significant state-specific allocations. The budget also emphasizes education and skilling with a 30% increase in funding.

Takeaways

• 📈 The Finance Minister Nala Sitaraman is set to unveil the first budget of Modi 3.0, focusing on populism, reforms, or a mix of both.
• 💼 The middle class is unhappy with paying the majority of taxes and is looking for tax reductions in the budget.
• 🏫 Education is a key area of investment, with a focus on skilling the workforce to achieve a $30 trillion economy by 2047.
• 🎓 Scaler School of Business offers a unique 18-month postgraduate program in management and tech, designed by industry experts.
• 💼 The budget's nine key priorities include job creation, skill development, and boosting domestic manufacturing, aligning with India's goal of becoming a $5 trillion economy.
• 💼 The government has revised income tax slabs, increasing the standard deduction from 50,000 to 75,000 rupees and adjusting tax rates for different income levels.
• 📈 Long-term capital gains tax rate has been increased from 10% to 12.5%, and short-term capital gains tax has been raised to 20% from 15%.
• 💡 The government has abolished the angel tax, which was a major hurdle for early-stage funding of startups.
• 🏭 The budget includes measures to support MSMEs, such as credit guarantee schemes, technology support packages, and new SIDB branches.
• 💼 The government has announced several initiatives to boost employment and upskilling, allocating 1.48 lakh crores to education, employment, and skilling.
• 🏙️ State-specific allocations in the budget hint at political strategies, with significant funding for Bihar and Andhra Pradesh.

Q & A

What is the context of the video script discussing?

The video script discusses the unveiling of the first budget of Modi 3.0 by Finance Minister Nirmala Sitharaman and analyzes its implications on various sectors including taxation, education, startups, and state-specific allocations.

What is the significance of the budget for the middle class in India?

The budget is significant for the middle class as it includes revised tax slabs, potential tax reductions, and changes to capital gains taxes that could impact their financial planning and investment strategies.

What changes were made to the income tax slabs in the new budget?

The new budget increased the standard deduction from 50,000 to 75,000 rupees and revised the tax slabs, with the 5% tax slab now extending up to 7 lakh rupees instead of 6 lakh, potentially saving taxpayers up to 17,500 rupees annually.

How does the change in capital gains tax rates affect investors?

The long-term capital gains tax rate has been increased from 10% to 12.5%, and the short-term capital gains tax has been heightened to 20% from 15%. This means investors will pay more tax on both short and long-term profits from their financial investments.

What is the impact of scrapping the benefits of indexation on long-term capital gain taxes?

Scrapping the benefits of indexation means that taxpayers cannot adjust the purchase price of assets like real estate with inflation, leading to a higher tax liability when selling such assets.

What is the significance of the abolition of Angel Tax for startups?

The abolition of Angel Tax is significant as it removes a major roadblock for early-stage funding, simplifies the fundraising process, aligns with the government's Startup India initiative, and levels the playing field for Indian startups to compete for global capital.

What measures were announced to support MSMEs in the budget?

The government announced a credit guarantee scheme, term loans for machinery purchase, a technology support package, and the opening of 24 new SIDB branches to serve MSME clusters.

How does the budget address employment and education?

The budget allocated 1.48 lakh crores to education, employment, and skilling, including providing loans for higher education, internships for over 1 crore youth, and an employment-linked incentive scheme to create additional employment opportunities.

What is the significance of the state-specific allocations in the budget?

The state-specific allocations, particularly for Bihar and Andhra Pradesh, are significant as they include large investments in infrastructure, tourism, and industrial development, which could be seen as political moves to strengthen coalition governments and prepare for upcoming elections.

What is the potential impact of the budget on the ease of doing business in India?

The budget's focus on improving India's ease of doing business includes reducing customs duties on items like gold and silver, mobile phone parts, and supporting domestic manufacturing, which could lead to lower prices for consumers and encourage domestic production.

How does the video script suggest individuals should approach tax planning in light of the budget?

The script suggests that individuals should focus on improving their income rather than hoping for lower taxes, as the only way out of losing a majority of income to taxes is to increase personal control over income sources.

Outlines

00:00

📊 Budget Expectations and Middle-Class Tax Concerns

The script begins with an introduction to the anticipation surrounding the unveiling of the first budget under Modi 3.0, with a focus on whether it will lean towards populism or reforms. The middle class's discontent with tax burdens is highlighted, alongside the backdrop of the Andra Pradesh reorganization Act. The video aims to simplify the budget's complexities, particularly the tax slabs, capital gains taxes, and schemes that could impact viewers' finances. It introduces Scaler School of Business as a key partner, emphasizing the need for skilled workforce development to achieve India's economic goals.

05:01

💼 Key Budget Priorities and Tax Changes

This paragraph outlines the Finance Minister's nine key priorities, focusing on job creation, skill development, and domestic manufacturing. It discusses the economic stability portrayed by the government, with an emphasis on inflation rates. The main focus then shifts to income tax changes, including an increase in the standard deduction and adjustments to tax slabs, which could potentially save middle-income earners a modest amount annually. The paragraph also addresses significant alterations to capital gains tax, which may affect investment strategies and lead to higher tax liabilities, especially with the removal of indexation benefits on long-term capital gains.

10:02

🚀 Startup Support and MSME Initiatives

The script highlights the government's measures to support startups and MSMEs, including the abolition of angel tax, which was a significant hurdle for early-stage funding. It simplifies the fundraising process and aligns with the Startup India initiative. Additionally, the government's focus on skilling and education is underscored by the announcement of new schemes for employment and skilling, with an allocation of 1.48 lakh crores. The video also touches on state-specific allocations, particularly for Bihar and Andra Pradesh, which are speculated to be politically motivated due to their importance in recent and upcoming elections.

🏢 Infrastructure Development and Political Implications

The final paragraph delves into the budget's focus on infrastructure development, especially for Bihar and Andra Pradesh, with significant financial allocations for projects like expressways, airports, and medical colleges. It discusses the political implications of these allocations, suggesting that they may be strategic moves to strengthen the ruling party's position ahead of elections. The script concludes by summarizing the budget's highlights, acknowledging the mixed reactions to the tax changes, and emphasizing the importance of skilling and education for India's economic growth.

Keywords

💡Budget

A budget is a financial plan outlining the government's revenue and expenditure for a fiscal year. In the video's context, the focus is on the first budget of Modi 3.0, which is expected to address various economic and social issues. The script discusses the buzz and anticipation around this budget, hinting at possible measures like populism or reforms.

💡Tax slabs

Tax slabs refer to the income ranges that are taxed at different rates. The script mentions revisions to these slabs, including an increase in the standard deduction and changes to the tax rates for different income levels, which directly impact the middle class and their tax liabilities.

💡Capital gains tax

Capital gains tax is levied on the profit made from the sale of an asset. The video script discusses changes to this tax, such as an increase in the long-term capital gains tax rate and a hike in short-term capital gains tax, which could affect investment strategies and financial planning.

💡Indexation

Indexation is an adjustment made to an asset's purchase price to account for inflation, reducing the taxable capital gain. The script explains that the benefits of indexation on long-term capital gains have been scrapped, which means higher taxes on assets like real estate when sold.

💡Startups

Startups are new businesses that are often financed by venture capital and angel investors. The script highlights the abolition of angel tax, which was a significant hurdle for early-stage funding, and discusses other measures announced to support startups and MSMEs, indicating a push for entrepreneurship and innovation.

💡Angel tax

Angel tax is a tax imposed on investments by angel investors in startups at a price higher than the fair market value. The script mentions its abolition as a positive move for small startups, simplifying the fundraising process and aligning with the government's startup initiative.

💡MSMEs

MSMEs stand for Micro, Small, and Medium Enterprises, which are crucial for job creation and economic growth. The script outlines several measures announced in the budget to support these enterprises, such as credit guarantee schemes and technology support packages.

💡Customs duty

Customs duty is a tax levied on imported goods. The script mentions a reduction in customs duty on items like gold and silver, which could lead to lower prices for consumers and is part of the government's focus on improving ease of doing business.

💡Employment and skilling

Employment and skilling refer to initiatives aimed at creating jobs and enhancing the skills of the workforce. The script discusses the government's allocation for education, employment, and skilling, including schemes for internships and incentives for first-time employees, which are crucial for addressing unemployment and upskilling the youth.

💡State-specific allocation

State-specific allocation refers to the budgetary provisions made for specific states, often based on political or developmental considerations. The script touches on significant allocations for Bihar and Andhra Pradesh, hinting at political motivations and the need for infrastructure development in these states.

💡Economic stability and growth

Economic stability and growth are overarching themes in the budget, with the Finance Minister emphasizing India's continued economic growth despite global uncertainty. The script discusses the government's optimistic outlook, including inflation targets and core inflation rates, which are indicative of a stable economy.

Highlights

Finance Minister Nirmala Sitharaman is set to unveil the first budget of Modi 3.0, with a mix of populism and reforms expected.

Middle-class taxpayers are unhappy with the tax burden and are hoping for relief in the budget.

The budget is presented for the financial year 2024-2025, with a focus on the middle class.

The budget aims to address the complexities of understanding its implications on personal finance.

Revised tax slabs could save taxpayers a few thousand rupees.

Changes to capital gains taxes may affect investment strategies.

A scheme for paid internships at top companies is announced.

Startups receive good news with the abolition of angel tax, simplifying the fundraising process.

State-specific allocations hint at the government's political strategy, particularly for Bihar and Andhra Pradesh.

Nine key priorities for the budget include job creation, skill development, and boosting domestic manufacturing.

The government emphasizes economic stability and growth, with inflation moving towards the 4% target.

Income tax changes include an increase in the standard deduction and adjustments to tax slabs.

Long-term capital gains tax rate increased from 10% to 12.5%, affecting financial investments.

Benefits of indexation on long-term capital gains tax are scrapped, leading to higher tax liabilities.

The exemption for long-term capital gains has been increased, and the holding period for unlisted financial assets reduced to 2 years.

Support for MSMEs includes credit guarantee schemes, term loans for machinery purchase, and technology support packages.

Customs duty reductions on items like gold, silver, and mobile phone parts may lead to lower consumer prices.

New schemes for employment and education include loans for higher education and internships for youth.

The government allocates 1.48 lakh crores to education, employment, and skilling, a 30% increase from the previous year.

Political implications of the budget include significant allocations for Bihar and Andhra Pradesh, possibly due to their importance in recent elections.

The budget's impact on personal finance and the economy will depend on the implementation of announced measures.

Transcripts

Finance Minister Nala sitaraman is all

set to unveil the first budget of Modi

3.0 in just a short while there's a lot

of Buzz around what to expect populism

reforms or a mix of both what will it be

honorable

speaker I present the budget for

2425 the middle class all of the country

is very unhappy that they are paying the

majority of taxes they need to see

reduction Andra Pradesh reorganization

Act

[Music]

it's that time of the year again it's

budget day it's when all as taxpayers of

the country sit anxiously waiting for

some good news hoping for some headlines

that'll mention some new scheme where we

can save our money you know for our

economy it's the most important day of

the year but for many of us the

integrities of budget are still sort of

complicated because nobody really tells

you how to decipher the numbers how to

understand what it means for you are you

gaining anything or are you losing

anything who is benefiting from all

these new numbers so we decided to break

down the relevant parts for you we're

talking revised tax Labs that could save

some of few few thousand rupees changes

to capital gains taxes that will make

you rethink your investment strategy and

even a scheme to get you paid

internships at top companies plus

there's also some good news for startups

and some drama with State specific

allocations that hint at government's

political game plan so we're not here to

push any agenda we're looking at the

facts and analyzing what they could mean

from different angles so whether you're

a salary professional an entrepreneur or

just trying to adult and figure out your

finances pay attention for the next 10

minutes as there's something to gain and

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the pin comment now back to the video so

the finance minister laid out nine key

priorities for this budget looking at

all of these you can clearly see your

focus on job creation skill development

and boosting Dom IC manufacturing this

basically aligns with the government's

making India push and their goal of

making India a 5 trillion economy the

Finance Minister emphasized that India's

economic growth continues to shine even

as the global economy faces uncertainty

she stated that inflation is moving

towards the 4% Target with core

inflation at

3.1% now this does paint a picture of

economic stability and growth but let's

dig into the details to see if this

optimism is Justified all right let's

talk about the part that your problem

most interested in that's changes to

income tax the government has tweaked

the tax Labs under the new income tax

regime and increased the standard

deduction from 50,000 to 75,000 rupees

but what is standard deduction even well

the standard deduction is like a

discount which the government offers to

you on the amount of tax you pay if

you're a salaried employee the tax Labs

under the new regime have been revised

and here is what it is now the main

change as you can see is that the 5% tax

lab now extends up to 7 lakh in instead

of 6 lakh rupes this basically means if

you're earning between 6 to 7 lakh

you'll now be taxed at 5% instead of 10%

now you can Avail this only if you off

for the new tax regime and it could

potentially save you up to

17,500 rupes in income tax annually but

if you break it down it actually works

out to about

1,458 rupees per month or 48 rupees per

day now this is also where it gets

little interesting the government has

decreased the taxes for one slab but has

also made some sign ific changes to

capital gains tax so the long-term

capital gains tax rate has been

increased from 10% to 12.5% for all

assets short-term capital gains tax has

been heighted to 20% from 15% so what

does this mean see Capital Tax is

basically what you have to pay on any

profits you make on selling your

financial investments like stocks real

estate gold be it long-term or shortterm

and what the government has done is

they've increased the amount of Capital

Tax you pay on both short and long-term

profits you make on all your Investments

what makes this worse is that the

government has also scrapped the

benefits of indexation on long-term

capital gain taxes which earlier used to

basically reduce your tax liability on

assets like real estate to explain this

better let's suppose you bought a

property for worth 50 lakhs some years

ago you now have found a reliable buyer

who's willing to pay you 70 lakhs for

the property now under the previous

taxation rules you could adjust the

purchase price using the cost inflation

index numbers which are basically issued

by the income tax department and reduce

your tax liability but under the new

rules you won't be able to adjust your

purchase price with inflation and would

end up paying a higher tax now this kind

of sucks and it not only pissed people

off but also led to real estate stocks

declining by over 5% after the

announcement the Silver Lining is that

the exemption for long-term capital

gains has been increased from 1 lakh to

1.25 lakh per Financial year one more

important point the holding period for

unlisted Financial assets to qualify for

long-term capital gains has been reduced

to 2 years so these could potentially

benefit startup employees with esops and

early stage investors as well now

talking about startups there was a big

announcement that you can definitely

leverage if you're plan to start a

company if you're a new founder pay

attention Angel tax is abolished which

is a big win for small startups you see

so Angel tax was basically introduced by

the government back in 2012 to check

money laundering and was imposed on the

funds that startups raised from Angel

Investors it had a rate of around 30%

and was applicable only if the funds and

invested to the startup for more than

its fair value you know a lot of

startups complained that they received

notices of tax payments including

charges of late payment fees for an

amount which was even bigger than the

original amount of funding now because

this is abolished it removes a major

roadblock for early stage funding Angel

Investors can basically now write checks

without worrying about inadvertently

triggering a tax bomb for the startup

secondly it simplifies the fundraising

process no more complex valuation

reports or arguments with tax officers

about the fair value of your startup

thirdly it aligns with government

startup India initiative and lastly I

feel like it levels the playing field

for Indian startups now they can

actually compete for Global Capital

without the handicap of a unique and

punitive tax regime so this one was a

win now talking about startups the

government has announced several

measures to support msmes as well first

was credit guarantee scheme and term

loans for Machinery purchase second was

a Technology support package thirdly

sidb will open 24 new branches to serve

msme clusters along with with this the

government has reduced customs duty on

several items like gold and silver

mobile phone paths which could

potentially lead to lower price for

these items for consumers see as you can

see these changes show a continued focus

on improving India's ease of doing

business and supporting domestic

manufacturing now let's get into some of

the new schemes announced for employment

and education another win which I

personally felt was super important in

light of all the recent scams which have

shaken our education system are the

schemes announced for boosting

employment and upskilling the government

this year has allocated 1.48 lakh crores

to education employment and Skilling

which is a 30% increase under this

they'll basically be providing loans of

up to 10 lakh to students for higher

education in domestic institutions which

is expected to help 100,000 students

every year secondly they are giving

internships to over 1 CR youth in top

500 companies with a stipend of 5,000

rupees more importantly and what I think

is going to be a big game changer is the

employment clinged incentive scheme so

under this the government has launched

three schemes which would see all the

firsttime employees get a one month wage

as part of their Provident contribution

while employers on the other side will

also get additional benefits which will

create additional employment

opportunities for 50 lakh people now

what the ground impact of all these

initiatives will be we'll have to see

but I think it's great especially

considering the state of job and

unemployment currently you know our

funding on education has historically

remained lower than China and even

countries like Brazil and Argentina and

I feel like it is particularly important

to increase and focus on this

considering the rise of AI which the

economic survey on Monday called as a

major challenge for the economy I also

feel like the internship scheme can also

be a big game changer if implemented

well lastly I wanted to touch upon State

specific allocation now this is where

things get politically interesting the

budget included some significant

allocation for specific States forly

Bihar and Andra Pradesh let me break it

down for Bihar there was allocation of

26,00 ,000 CR for building expressways

new airports medical colleges and sports

infrastructure a big chunk of Tourism

pie with Nanda to be made a tourist hub

for Andra Pradesh rupees 15,000 crores

has been allocated in special financial

support for the development of the

capital amravati and funds have been

allocated for Industrial Development

under the AP reorganization act now

there's been lot of speculation about

this that all of this was done because

both Bihar and Andra Pradesh were

crucial for the BJP coming back to Power

this year both had demanded special

status after the major contribution in

the bjp's election win so naturally BJP

had to offer some big incentives to keep

the Coalition governments run strong

more importantly Bihar is also set to

Witness Assembly elections in 2025 and

in light of the recent Bridge collapses

improving the state's infrastructure

capabilities is the need of the r for

the central government but politics

aside I feel like this is also a major

win for the citizens of Bihar so there

you have it these were the highlights of

budget 2024 in a nutshell I know that a

lot of you hoped to get some tax relief

from this year's budget while there were

minus changes there was a big tax

slapped on capital gains making your

other means of income and long-term

Investments even trickier I think the

angel tax was a win though but apart

from this I personally feel like the

only way out of losing majority of your

income to taxes is just focusing on

means to improving your income instead

of hoping for lower taxes because I feel

like that's the only thing that's in our

person control additionally I'm also

happy about the new focus on Skilling

and education however I feel like its

real impact will depend on how well

these Mees are implemented and how the

economy responds anyway we will keep an

eye on all the economic news and see how

these policies play out in reality and

if there are any more opportunities that

arise that you folks can leverage that

is all for today's video my name is Aina

Maya thank you for watching and please

don't forget to hit the Subscribe button

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