How Good was the Budget? In-depth Review and Explanation!

Summary

The video script by Praanjal delves into the budget analysis for investors, focusing on four major segments: employment, investor benefits, job seekers and youth, and the broader economy. It discusses tax slab changes, standard deduction increases, and the rationale behind maintaining tax brackets to encourage more people to pay income tax. The script also covers long-term capital gains tax, gold customs duty reduction, property tax changes, and initiatives for youth employment and skill development. The presenter emphasizes the government's intent to benefit the middle class and stimulate the economy while managing public expectations and addressing market speculation.

Takeaways

• 📊 No significant changes in tax slabs; the old and new slabs remain the same, with no major updates in the tax regime.
• 🔍 A slight reduction in tax rates for those earning between 6 to 7 lakhs and 9 to 10 lakhs annually, indicating a targeted benefit for specific income groups.
• 💰 An increase in standard deduction from INR 50,000 to INR 75,000, providing a tax benefit for those in the middle-income bracket.
• 👴 The enhancement of the National Pension Scheme (NPS) corpus for employers, with the employer's contribution expected to rise from 10% to around 14%.
• 📉 The rationale behind not increasing tax slabs is linked to the long-standing narrative of bringing more people under the tax bracket, aiming for economic inclusivity.
• 📈 Long-term capital gains tax has been increased from 10% to 25%, affecting investors with significant portfolio gains, aiming to increase government revenue.
• 💡 The reduction in custom duty on gold and silver is expected to make these commodities cheaper, impacting the market and consumer behavior.
• 🏢 The removal of indexation benefits in property transactions may lead to higher tax liabilities, affecting the real estate market and investors.
• 📉 The increase in short-term capital gains tax from 15% to 20% for frequent traders, aiming to discourage speculative trading practices.
• 💼 Introduction of benefits for fresh job seekers and interns, with financial support from the government to encourage employment and skill development.
• 💡 Mixed responses to the increase in the Mudra loan limit from INR 10 lakhs to INR 20 lakhs, highlighting the need for better distribution and accessibility.

Q & A

What are the four major segments discussed in the budget analysis for investors?

The four major segments discussed in the budget analysis are: the budget for employment, the budget for investors, the budget for job seekers and youth, and the budget for the broader economy.

What changes have been made to the tax slabs in the budget?

There were no changes to the tax slabs. The old and new slabs remain the same under the new tax regime. However, some benefits have been introduced for those earning between 6 to 7 lakhs and 9 to 10 lakhs, with a reduction in tax rates and an increase in standard deduction from 50,000 to 75,000.

What is the new standard deduction limit introduced in the budget?

The standard deduction limit has been increased from 50,000 to 75,000.

Why were the tax slabs not increased in the budget?

The tax slabs were not increased due to the long-standing narrative of bringing more people under the tax bracket, aiming to reduce the burden on the economically weaker sections of the society.

What is the impact of the increase in long-term capital gains tax on the market?

The increase in long-term capital gains tax from 10% to 12.5% may lead to a trickle-down effect, potentially making the stock market slightly less attractive and prompting a shift of funds towards mutual funds.

What benefits have been introduced for the youth in terms of employment and skill development?

For fresh job seekers, the government will contribute to their provident fund contributions up to 1 lakh in three installments. For those seeking internships, there is a fund available up to a turnover of 500 crores, allowing companies to spend on job creation and youth training.

What are the implications of the removal of indexation benefits in property transactions?

The removal of indexation benefits means that the profit from property transactions will be considered in full, without adjusting for inflation, leading to higher tax liabilities for sellers.

How has the budget addressed the issue of high gold and silver imports?

The budget has reduced the custom duty on gold and silver, which may make these metals cheaper in the domestic market and potentially reduce imports.

What changes have been made to the tax rates for short-term capital gains?

The tax rate for short-term capital gains has been increased to 20%, which may encourage more people to hold onto their assets for a longer period.

What is the new limit for education loans introduced in the budget?

The limit for education loans has been increased from 10 lakhs to 20 lakhs, with an interest subsidy for loans up to 1 lakh.

How does the budget affect traders and speculators in the stock market?

The budget has increased the tax liability for securities transactions, which may act as a deterrent for heavy speculation and provide clarity on the government's stance on market behavior.