Budget 2024 TOP HIGHLIGHTS In 8 Minutes | Budget 2024 Takeaways | Income Tax | Standard Deduction

Summary

The announcement highlights key reforms in the new tax regime, including an increase in standard deductions for salaried employees and pensioners, as well as revised tax slabs for various income groups. It also introduces simplified capital gains taxation and incentives for employment through three schemes targeting first-time job seekers, job creation in manufacturing, and employer support. Other proposals include investments in infrastructure, tax reductions on mobile phones, and customs duties on gold, silver, and platinum to boost domestic value addition. The reforms aim to provide financial relief and stimulate economic growth.

Takeaways

• 😀 The standard deduction for salaried employees in the new tax regime will increase from ₹50,000 to ₹75,000.
• 😀 The deduction for family pensioners will rise from ₹15,000 to ₹25,000, benefiting around 4 crore salaried individuals and pensioners.
• 😀 The new tax rate structure under the new tax regime is revised: 0 to ₹3 lakh (nil), ₹3 lakh to ₹7 lakh (5%), ₹7 lakh to ₹10 lakh (10%), ₹10 lakh to ₹12 lakh (15%), ₹12 lakh to ₹15 lakh (20%), and above ₹15 lakh (30%).
• 😀 The tax savings for salaried employees in the new tax regime could amount to up to ₹17,500.
• 😀 Short-term capital gains on certain financial assets will be taxed at 20%, while other financial and non-financial assets remain subject to their applicable tax rates.
• 😀 Long-term capital gains on both financial and non-financial assets will be taxed at 12.5%.
• 😀 The exemption limit for capital gains on specific financial assets will increase to ₹1.25 lakh per year to benefit lower and middle-income classes.
• 😀 Three employment-linked incentive schemes will be implemented under the Prime Minister's package, focusing on EPFO enrollment, first-time employees, and support to both employees and employers.
• 😀 Scheme A (First Timers): Direct benefit transfer of one month’s salary (up to ₹15,000) in three installments for first-time employees registering with EPFO. The scheme is expected to benefit 2.1 crore youths.
• 😀 Scheme B (Job Creation in Manufacturing): Offers incentives for additional employment in manufacturing, particularly for first-time employees. The scheme aims to benefit 30 lakh youth and their employers.
• 😀 Scheme C (Support to Employers): Covers additional employment in all sectors. The government will reimburse up to ₹3,000 per month for EPFO contributions for two years for each additional employee. This scheme aims to incentivize employment for 50 lakh persons.
• 😀 New airports, medical colleges, and sports infrastructure will be developed in Bihar with additional allocations to support capital investments.
• 😀 Special financial support will be arranged for Andhra Pradesh through multilateral development agencies for the completion of key projects, including the Poam Irrigation project, which is crucial for the state’s agriculture and food security.
• 😀 The customs duties on mobile phones, PCBA, and mobile chargers will be reduced to 15%, to encourage domestic manufacturing.
• 😀 To boost domestic value addition in gold and precious metal jewelry, the customs duties on gold and silver will be reduced to 6%, and on platinum to 6.4%.

Q & A

What is the proposed increase in the standard deduction for salaried employees under the new tax regime?

The standard deduction for salaried employees is proposed to be increased from 50,000 rupees to 75,000 rupees.

How much is the proposed deduction on family pension for pensioners?

The proposed deduction on family pension for pensioners is to be increased from 15,000 rupees to 25,000 rupees.

How does the new tax rate structure for salaried individuals look?

The new tax rate structure is as follows: 0 to 3 lakh rupees - 0%, 3 to 7 lakh rupees - 5%, 7 to 10 lakh rupees - 10%, 10 to 12 lakh rupees - 15%, 12 to 15 lakh rupees - 20%, and above 15 lakh rupees - 30%.

How much can a salaried employee save in income tax under the new tax regime?

A salaried employee in the new tax regime stands to save up to 17,500 rupees in income tax.

What changes are proposed for capital gains taxation?

Short-term gains on certain financial assets will attract a tax rate of 20%, while long-term gains on all financial and non-financial assets will be taxed at 12.5%. Additionally, the exemption limit for capital gains on certain financial assets will be increased to 1.25 lakh rupees per year.

What are the three employment-linked incentive schemes introduced by the government?

The three schemes are: Scheme A (First Timers) - providing one-month wage for first-time employees; Scheme B (Job Creation in Manufacturing) - incentivizing employment in the manufacturing sector; Scheme C (Support to Employers) - reimbursing employers for additional employment.

How much benefit is expected from Scheme A (First Timers)?

Scheme A is expected to benefit 2.1 crore youths by providing direct benefit transfers of up to 15,000 rupees in three installments.

What is the expected impact of Scheme B (Job Creation in Manufacturing)?

Scheme B is expected to benefit 30 lakh youth entering employment and their employers by incentivizing additional employment in the manufacturing sector linked to first-time employees.

How does Scheme C (Support to Employers) work?

Scheme C will reimburse employers up to 3,000 rupees per month for each additional employee hired, for a period of two years, if the employee’s salary is under 1 lakh rupees per month.

What are the proposed infrastructure developments in Bihar?

The government plans to construct new airports, medical colleges, and sports infrastructure in Bihar, with additional capital investment support and expedited requests for external assistance from multilateral development banks.

What is the proposed reduction in customs duties on gold, silver, and platinum?

The government proposes to reduce customs duties on gold and silver to 6%, and on platinum to 6.4%, in order to enhance domestic value addition in the gold and precious metal jewelry sector.