The Budget (2024-25)

Summary and Highlights:

• India’s inflation continues to be low, stable and moving towards the 4 per cent target.
• PM’s package of 5 schemes and initiatives with an outlay of ₹2 lakh crore to facilitate
employment, skilling and other opportunities for 4.1 crore youth in 5 years.
• For pursuit of ‘Viksit Bharat’, the budget envisages sustained eIorts on 9 priorities for
generating ample opportunities for all.
• Focuses on employment, skilling, MSMEs and middle class.
• New 109 high-yielding and climate-resilient varieties of 32 field and horticulture
crops will be released for cultivation by farmers.
• In the next two years, 1 crore farmers across the country will be initiated into natural
farming.
• A provision of ₹ 1.52 lakh crore for agriculture and allied sector announced for this year.
• 1,000 industrial training institutes will be upgraded
• Government will formulate a plan, Purvodaya, for the all-round development of the
Eastern region covering Bihar, Jharkhand, West Bengal, Odisha and Andhra Pradesh.
• For promoting women-led development, the budget carries an allocation of more than `
3 lakh crore for schemes benefitting women and girls.
• A provision of ₹2.66 lakh crore for rural development including rural infrastructure made
this year.
• The limit of mudra loans will be enhanced to ₹20 lakh from the current ₹10 lakh.
• Government to launch a comprehensive scheme for providing internship
opportunities in 500 top companies to 1 crore youth in 5 years.
• Under PM Awas Yojana Urban 2.0, housing needs of 1 crore urban poor and middle-class
families will be addressed with an investment of ₹10 lakh crore.
• Phase IV of PMGSY will be launched to provide all-weather connectivity to 25,000 rural
habitations.
• Emphasis on expanding the space economy by 5 times in the next 10 years with a venture
capital fund of ₹1,000 crore.
• Major relief to 4 crore salaried individuals and pensioners in income tax.
• Standard deduction increased from ₹ 50,000 to ₹ 75,000/- for those in new tax regime.
• Deduction on family pension increased from ₹ 15,000/- to ₹ 25,000/-
• Over 58 per cent corporate tax receipts collected under the new regime
and two third of individual income taxpayers switched over to new income tax regime.
• Angel tax abolished for all class of investors to boost start-ups and investments.
o Angel Tax is a term basically used to refer to the income tax payable on the capital
raised by unlisted companies via the issue of shares through oI-market
transactions.
o Angel tax was levied on the capital raised via the issue of shares by unlisted
companies from an Indian investor if the share price of issued shares is seen in
excess of the fair market value of the company. The excess realization is
considered as income and therefore, taxed accordingly.
o Angel tax was imposed only on investments made by a resident investor. It should
be noted that angel tax is not applicable in case the investments are made by any
non-resident or venture capital funds.
• Corporate tax on foreign companies reduced from 40 to 35 per cent to invite investments.
• 5% TDS on many payments merged to 2 per cent TDS.
• Capital Gain exemption limit increased to ₹1.25 lakh per year to benefit lower-and-
middle-income classes.
• Custom duty on X-ray panels, mobile phones & PCBA reduced to 15 per cent.

o
o PCBA stands for Printed Circuit Board Assembly.
• Precious metals including gold and silver to become cheaper, custom duty reduced to 6
per cent.

PART A

• Minister of Finance and Corporate AIairs Nirmala Sitharaman, while presenting the
Union Budget 2024-25 in Parliament, said that India’s inflation continues to be low,
stable and moving towards the 4 per cent target.
• Core inflation (non-food, non-fuel) currently is 3.1 per cent and steps are being taken to
ensure supplies of perishable goods reach market adequately.
o Core inflation is the change in the costs of goods and services, but it does not
include those from the food and energy sectors. This measure of inflation
excludes these items because their prices are much more volatile.

The Finance Minister said that as mentioned in the interim budget, the focus is on 4 major
castes, namely ‘Garib’ (Poor), ‘Mahilayen’ (Women), ‘Yuva’ (Youth) and ‘Annadata’
(Farmer).

Budget Theme

Dwelling on the Budget theme, Mrs. Sitharaman said, turning attention to the full year and
beyond, in this budget, we particularly focus on employment, skilling, MSMEs, and the
middle class.

She announced the Prime Minister’s package of 5 schemes and initiatives to facilitate
employment, skilling and other opportunities for 4.1 crore youth over a 5-year period with a
central outlay of ₹2 lakh crore. This year, ₹1.48 lakh crore has been allocated for education,
employment and skilling.

• [Link]
outlay-of-2-lakh-crore-to-generate-jobs-for-youth/[Link]
Budget Priorities

The Finance Minister said, for pursuit of ‘Viksit Bharat’, the budget envisages sustained
eIorts on the following 9 priorities for generating ample opportunities for all.

1. Productivity and resilience in Agriculture

1) A comprehensive review of the agriculture research setup to bring the

focus on raising productivity and developing climate resilient varieties.

2) New 109 high-yielding and climate-resilient varieties of 32 field and

horticulture crops will be released for cultivation by farmers.

3) 1 crore farmers across the country will be initiated into natural farming,
supported by certification and branding in next 2 years.

4) 10,000 need-based bio-input resource centres to be established.

o A Bio-Input Resource Centre (BRC) is where time tested, locally

prepared Inputs/formulations utilizing biological entities or biologically
derived inputs useful for improving soil health, crop growth, pest or
disease management and habitat management are made available for
purchase by farmers in a defined geographical area.

5) Large scale clusters for vegetable production will be developed closer to

major consumption centres.

6) Financing for Shrimp farming, processing and export will be facilitated through
NABARD.

7) DPI for coverage of farmers and their lands in 3 years.

o Digital Public Infrastructure (DPI) represents a comprehensive

approach to leveraging technology for societal goals. Unlike traditional
digital infrastructure, DPI integrates technology, markets, and
governance to create public goods that drive development, inclusion,
and innovation.

8) Digital crop survey in 400 districts

9) Issuance of Jan Samarth based Kisan Credit Cards

2. Employment & Skilling

1) One-month wage to new entrants in all formal sectors in 3 instalments up to

₹15,000, expected to benefit 210 lakh youth.
 2) Government will reimburse EPFO contributions of employers up to ₹3000 per
month for 2 years for all new hires, expected to generate 50 lakh jobs.

3) Facilitate higher participation of women in the workforce through setting up of

working women hostels in collaboration with industry and establishing
creches.

4) 20 lakh youth will be skilled over a 5-year period.

5) 1,000 Industrial Training Institutes will be upgraded in hub and spoke

arrangements with outcome orientation.

o In the hub-and-spoke model, the hub signifies a central or lead

organization that serves as the coordinating entity. The spokes, on
the other hand, represent partner organizations that are directly
linked to the hub. Each spoke interacts directly with the hub but not
necessarily with each other.

o
3. Inclusive Human Resource Development and Social Justice

1) Purvodaya: Vikas bhi Virasat bhi

o Plan for endowment-rich states in the Eastern parts covering Bihar,

Jharkhand, West Bengal, Odisha and Andhra Pradesh for generation of
economic opportunities to attain Viksit Bharat.

o Amritsar Kolkata Industrial Corridor with development of an

industrial node at Gaya.

o Allocation of more than ₹3 lakh crore for schemes benefitting

women and girls.
 o Pradhan Mantri Janjatiya Unnat Gram Abhiyan: Improving the socio-
economic condition of tribal communities covering 63,000 villages
benefitting 5 crore tribal people.

o More than 100 branches of India Post Payment Bank will be set up in
the North-East region.

2) Andhra Pradesh Reorganization Act:

o Financial support of ₹15,000 crores will be arranged in FY 24- 25.

o Completion of Polavaram Irrigation Project ensuring food security of

the nation.

§ The Polavaram Project is an under-construction multi-purpose

irrigation project on the Godavari River in Andhra Pradesh. The
backwater spreads into parts of Chhattisgarh and Odisha
States. The project has been accorded national project status
by the Union Government in 2014 (under Section 90 of the
Andhra Pradesh Reorganisation Act, 2014).

§ The project implements the Godavari-Krishna link under the

Interlinking of Rivers project.

§ Godavari is the second longest river in India.

o Essential infrastructure such as water, power, railways and roads in

Kopparthy node on the Vishakhapatnam-Chennai Industrial Corridor
and Orvakal node on Hyderabad-Bengaluru Industrial Corridor.

4. Manufacturing & Services

1) Mudra Loans: The limit enhanced to ₹20 lakh from the current ₹10 lakh under
the 'Tarun' category.

2) Credit Guarantee Scheme for MSMEs in the Manufacturing Sector

3) Twelve industrial parks under the National Industrial Corridor Development

Programme

4) Scheme for providing internship opportunities in 500 top companies to 1 crore

youth in 5 years.

5) Allowance of ₹5,000 per month along with a one-time assistance of ₹6,000

through the CSR funds.
 6) Rental housing with dormitory type accommodation for industrial workers in
PPP mode with VGF support.

7) Critical Minerals Mission for domestic production, recycling and overseas

acquisition.

5. Urban Development

1) Encouraging states to lower stamp duties for properties purchased by women.

2) Envisioning a scheme to develop 100 weekly 'Haats' or Street Food Hubs in

select cities.

3) Transit Oriented Development plans for 14 large cities with a population above
30 lakh.

4) Promote water supply, sewage treatment and solid waste management

projects and services for 100 large cities through bankable projects.

5) PM Awas Yojana Urban 2.0: Needs of 1 crore urban poor and middle-class
families will be addressed with an investment of ₹10 lakh crore.

6) Enabling policies and regulations for eIicient and transparent rental housing
markets with enhanced availability will also be put in place.

6. Energy Security

1) A joint venture between NTPC and BHEL will set up a full scale 800 MW
commercial plant.

2) Setting up Bharat Small Reactors

3) R&D of Bharat Small Modular Reactor and newer technologies for nuclear
energy

4) For electricity storage and facilitation of smooth integration of the growing

share of renewable energy

5) Financial support for shifting of micro and small industries to cleaner forms of
energy Facilitate investment grade energy audit in 60 clusters, next phase
expands to 100 clusters.

7. Infrastructure

1) Provision of ₹11,11,111 crore for infrastructure (3.4% of GDP).

 2) ₹1.5 lakh crore to states as longterm interest free loans to support resource
allocation.

3) Phase IV of PMGSY will be launched to provide allweather connectivity to

25,000 rural habitations.

4) Financial support for projects with estimated cost of ₹11,500 crore such as
the Kosi-Mechi intra-state link and 20 other ongoing and new schemes.

8. Innovation, Research & Development

1) Operationalization of the Anusandhan National Research Fund for basic

research and prototype development.

o The Anusandhan National Research Foundation (ANRF) has been

established with Anusandhan National Research Foundation (ANRF)
2023 Act. The ANRF aims to seed, grow and promote research and
development (R&D) and foster a culture of research and innovation
throughout India’s universities, colleges, research institutions, and
R&D laboratories. ANRF will act as an apex body to provide high-level
strategic direction of scientific research in the country as per
recommendations of the National Education Policy (NEP). With the
establishment of ANRF, the Science and Engineering Research Board
(SERB) established by an act of Parliament in 2008 has been subsumed
into ANRF. ANRF will forge collaborations among the industry,
academia, and government departments and research institutions,
and create an interface mechanism for participation and contribution
of industries and State governments in addition to the scientific and
line ministries.

2) Private sector-driven research and innovation at commercial scale with a

financing pool of ₹1 lakh crore.

3) Space Economy: A venture capital fund of ₹1,000 crore is to be set up.

9. Next Generation Reforms

1) Unique Land Parcel Identification Number or Bhu-Aadhaar for all lands.

2) Survey of map sub-divisions as per current ownership.

3) Linkages to the farmers' registries.

4) Land records in urban areas will be digitized with GIS mapping.

 5) Digitization of cadastral maps

6) Establishment of land registry

7) Taxonomy for Climate Finance: Enhancing the availability of capital for

climate adaptation and mitigation related investments.

o A climate finance taxonomy is a system that classifies which parts of

the economy may be marketed as sustainable investments. It helps
guide investors and banks in directing trillions toward impactful
investments to tackle climate change.

8) FDI and Overseas Investments: Simplified to facilitate FDIs and promote

opportunities for using Indian Rupee as a currency for overseas investments.

9) NPS Vatsalya: A plan for contribution by parents and guardians for minors.

o The meaning of Vatsalya is: Love that a mother feels for a child.

10) Improvement of data governance, collection, processing and management of

data and statistics.

11) New Pension Scheme (NPS): A solution that addresses the relevant issues,
protects the common citizen and maintains fiscal prudence will be formed.

10. Miscellaneous

1) Irrigation and Flood Mitigation

o Assistance for flood management and related projects in Assam,

Sikkim & Uttarakhand.

o Assistance for reconstruction and rehabilitation in Himachal Pradesh.

2) Tourism

o Development of Vishnupad Temple Corridor and Mahabodhi Temple

Corridor modelled on Kashi Vishwanath Temple Corridor

o Comprehensive development initiative for Rajgir will be undertaken

which holds religious significance for Hindus, Buddhists and Jains.

o The development of Nalanda as a tourist centre besides reviving

Nalanda University to its glorious stature.
Priority 1: Productivity and resilience in Agriculture

The Finance Minister announced that the government will undertake a comprehensive
review of the agriculture research setup to bring the focus on raising productivity. New 109
high-yielding and climate-resilient varieties of 32 field and horticulture crops will be released
for cultivation by farmers.
In the next two years, 1 crore farmers across the country will be initiated into natural farming
supported by certification and branding.

10,000 need-based bio-input resource centres will be established.

For achieving self-suIiciency in pulses and oilseeds, government will strengthen their
production, storage and marketing and to achieve ‘atmanirbharta’ for oil seeds such as
mustard, groundnut, sesame, soybean, and sunflower.

Government, in partnership with the states, will facilitate the implementation of the Digital
Public Infrastructure (DPI) in agriculture for coverage of farmers and their lands in 3 years.
Smt Sitharaman announced a provision of ₹1.52 lakh crore for agriculture and allied sector
this year.

Priority 2: Employment & Skilling

The Finance Minister said that the government will implement 3 schemes for ‘Employment
Linked Incentive’, as part of the Prime Minister’s package. These will be based on enrolment
in the EPFO, and focus on recognition of first-time employees, and support to employees
and employers.
Government will also facilitate higher participation of women in the workforce through
setting up of working women hostels in collaboration with industry, and establishing
creches.
Referring to the Skilling programme, the Finance Minister announced a new centrally
sponsored scheme, as the 4th scheme under the Prime Minister’s package, for skilling in
collaboration with state governments and Industry. 20 lakh youth will be skilled over a 5-year
period and 1,000 Industrial Training Institutes will be upgraded in hub and spoke
arrangements with outcome orientation.

She also announced that the Model Skill Loan Scheme will be revised to facilitate loans up
to
₹7.5 lakh with a guarantee from a government promoted Fund, which is expected to help
25,000 students every year.

For helping the youth, who have not been eligible for any benefit under government schemes
and policies, she announced a financial support for loans upto ₹10 lakh for higher education
in domestic institutions. E-vouchers for this purpose will be given directly to 1 lakh students
every year for annual interest subvention of 3 per cent of the loan amount.

Priority 3: Inclusive Human Resource Development and Social Justice

Talking about the Saturation approach, the Finance Minister emphasised that
implementation of schemes meant for supporting economic activities by craftsmen,
artisans, self-help groups, scheduled caste, schedule tribe and women entrepreneurs, and
street vendors, such as PM Vishwakarma, PM SVANidhi, National Livelihood Missions, and
Stand-Up India will be stepped up.

Purvodaya
Government will formulate a plan, Purvodaya, for the all-round development of the eastern
region of the country covering Bihar, Jharkhand, West Bengal, Odisha and Andhra
Pradesh. This will cover human resource development, infrastructure, and generation of
economic opportunities to make the region an engine to attain Viksit Bharat.

Pradhan Mantri Janjatiya Unnat Gram Abhiyan

The Finance Minister announced that for improving the socio-economic condition of tribal
communities, government will launch the Pradhan Mantri Janjatiya Unnat Gram Abhiyan by
adopting saturation coverage for tribal families in tribal-majority villages and aspirational
districts covering 63,000 villages and benefitting 5 crore tribal people.
More than 100 branches of India Post Payment Bank will be set up in the North East region to
expand the banking services.

She said, a provision of ₹2.66 lakh crore for rural development including rural infrastructure
was made this year.

Priority 4: Manufacturing & Services

Support for promotion of MSMEs

Smt Sitharaman said, this budget provides special attention to MSMEs and manufacturing,
particularly labour-intensive manufacturing. A separately constituted self-financing
guarantee fund will provide, to each applicant, guarantee cover up to ₹100 crore, while the
loan amount may be larger. Similarly, Public sector banks will build their in-house capability
to assess MSMEs for credit, instead of relying on external assessment. She also announced
a new mechanism for facilitating continuation of bank credit to MSMEs during their stress
period.

Mudra Loans

The limit of Mudra loans will be enhanced to ₹ 20 lakh from the current ₹ 10 lakh for those
entrepreneurs who have availed and successfully repaid previous loans under the ‘Tarun’
category.

MSME Units for Food Irradiation, Quality & Safety Testing

Financial support for setting up of 50 multi-product food irradiation units in the MSME sector
will be provided. Setting up of 100 food quality and safety testing labs with NABL
accreditation will also be facilitated. To enable MSMEs and traditional artisans to sell their
products in international markets, E-Commerce Export Hubs will be set up in public-private-
partnership (PPP) mode .

Internship in Top Companies

The Finance Minister said that as the 5th scheme under the Prime Minister’s
package, government will launch a comprehensive scheme for providing internship
opportunities in 500 top companies to 1 crore youth in 5 years.
Priority 5: Urban Development

Urban Housing

Under the PM AwasYojana Urban 2.0, housing needs of 1 crore urban poor and middle-class
families will be addressed with an investment of ₹ 10 lakh crore. This will include the central
assistance of ₹ 2.2 lakh crore in the next 5 years.

Water Supply and Sanitation

In partnership with the State Governments and Multilateral Development Banks,
government will promote water supply, sewage treatment and solid waste management
projects and services for 100 large cities through bankable projects.

PM SVANidhi

She added that building on the success of PM SVANidhi Scheme in transforming the lives of
street vendors, Government envisions a scheme to support each year, over the next five
years, the development of 100 weekly ‘haats’ or street food hubs in select cities.

Priority 6: Energy Security

The Finance Minister said, in line with the announcement in the interim budget, PM Surya
Ghar Muft Bijli Yojana has been launched to install rooftop solar plants to enable 1 crore
households obtain free electricity up to 300 units every month. The scheme has generated
remarkable response with more than 1.28 crore registrations and 14 lakh applications.

Nuclear energy is expected to form a very significant part of the energy mix for Viksit Bharat.

Priority 7: Infrastructure

The Finance Minister underlined that significant investment the Central Government has
made over the years in building and improving infrastructure has had a strong multiplier
eIect on the economy. Government will endeavour to maintain strong fiscal support for
infrastructure over the next 5 years, in conjunction with imperatives of other priorities and
fiscal consolidation. ₹11,11,111 crore for capital expenditure has been allocated this year,
which is 3.4 per cent of our GDP.

Pradhan Mantri Gram SadakYojana (PMGSY)

The Finance Minister announced that Phase IV of PMGSY will be launched to provide all-
weather connectivity to 25,000 rural habitations which have become eligible in view of their
population increase.
For Irrigation and Flood Mitigation in Bihar, through the Accelerated Irrigation Benefit
Programme and other sources, government will provide financial support for projects with
estimated cost of ₹11,500 crore such as the Kosi-Mechi intra-state link and 20 other ongoing
and new schemes including barrages, river pollution abatement and irrigation
projects. Government will also provide assistance to Assam, Himachal Pradesh,
Uttarakhand and Sikkim for flood management, landslides and related projects.

Priority 8: Innovation, Research & Development

The Finance Minister said that government will operationalize the Anusandhan National
Research Fund for basic research and prototype development and set up a mechanism for
spurring private sector-driven research and innovation at commercial scale with a financing
pool of ₹1 lakh crore in line with the announcement in the interim budget.

Space Economy

With our continued emphasis on expanding the space economy by 5 times in the next 10
years, a venture capital fund of ₹1,000 crore will be set up.

Priority 9: Next Generation Reforms

Economic Policy Framework

The Finance Minister said that the government will formulate an Economic Policy Framework
to delineate the overarching approach to economic development and set the scope of the
next generation of reforms for facilitating employment opportunities and sustaining high
growth.

Labour related reforms

Government will facilitate the provision of a wide array of services to labour, including those
for employment and skilling. A comprehensive integration of e-shram portal with other
portals will facilitate such one-stop solution. Shram Suvidha and Samadhan portals will be
revamped to enhance ease of compliance for industry and trade.

Government will develop a taxonomy for climate finance for enhancing the availability of
capital for climate adaptation and mitigation.

Foreign Direct Investment and Overseas Investment

The rules and regulations for Foreign Direct Investment and Overseas Investments will be
simplified to (1) facilitate foreign direct investments, (2) nudge prioritization, and (3) promote
opportunities for using Indian Rupee as a currency for overseas investments.
NPS Vatsalya

NPS-Vatsalya, a plan for contribution by parents and guardians for minors will be started. On
attaining the age of majority, the plan can be converted seamlessly into a normal NPS
account.

New Pension Scheme (NPS)

The Finance Minister said that the Committee to review the NPS has made considerable
progress in its work and a solution will be evolved which addresses the relevant issues while
maintaining fiscal prudence to protect the common citizens.
Budget Estimates 2024-25

The Finance Minister informed that for the year 2024-25, the total receipts other than
borrowings and the total expenditure are estimated at ₹32.07 lakh crore and ₹48.21 lakh
crore respectively. The net tax receipts are estimated at ₹25.83 lakh crore and the fiscal
deficit is estimated at 4.9 per cent of GDP.

She said, the gross and net market borrowings through dated securities during 2024-25 are
estimated at ₹14.01 lakh crore and ₹11.63 lakh crore respectively.

Smt Sitharaman emphasised that the fiscal consolidation path announced by her in 2021
has served economy very well, and the government will aim to reach a deficit below 4.5 per
cent next year.

PART B

Apart from giving relief to four crore salaried individuals and pensioners of the country in the
direct taxes, Union Budget 2024-25 seeks to comprehensively review the direct and indirect
taxes in the next six months, simplifying them, reducing tax incidence and compliance
burdens and broadening the tax nets. The Budget proposes comprehensive rationalization
of GST tax structure along with review of the Custom Duty rate structure to improve the tax
base and support domestic manufacturing. A comprehensive review of Income – Tax Act is
targeted at reducing disputes and litigations and to make the act lucid, concise and easy to
read. Minister of Finance and Corporate AIairs Smt. Nirmala Sitharaman said that
simplification of tax regimes without exemptions and deductions for corporate and personal
income tax has been appreciated by tax payers as over 58 per cent of corporate tax came
from simplified tax regime in 2022-23 and more than two third tax payers have switched over
to the new personal income tax regime.
Budget 2024-25 increased standard deduction of salaried employees from ₹ 50,000/- to ₹
75,000/- for those opting for new tax regime. Similarly, deduction on family pension for
pensioners enhanced from ₹ 15,000/- to ₹ 25,000/-. Assessments now, can be reopened
beyond three years up to 5 years from end of year of assessment, only if, the escaped income
is more than ₹ 50 Lakh. The new tax regime rate structure is also revised to give a salaried
employee benefits up to ₹ 17,500/- in income tax.

Income Slabs Tax Rate

0 – 3 Lakh rupees NIL

3 – 7 Lakh rupees 5 per cent

7 – 10 Lakh rupees 10 per cent

10 – 12 Lakh rupees 15 per cent

12 – 15 Lakh rupees 20 per cent

Above 15 Lakh rupees 30 per cent

Table 1: New Tax Regime Tax Structure

To promote investment and foster employment, Budget has given boost to entrepreneurial
spirit and start-up ecosystem, abolishing angel tax for all classes of investors. Further, a
simpler tax regime for foreign shipping companies operating domestic cruises is proposed
looking at the tremendous potential of cruise tourism. Foreign mining companies selling raw
diamonds in the country can now benefit from safe harbor rates which will benefit the
diamond industry. Further, corporate tax rate on foreign companies reduced from 40 to 35
per cent to attract foreign capital.
Budget further simplified the direct tax regime for charities, TDS rate structure and capital
gains taxation. The two tax exemption regimes for charities will be merged into one. 5 per
cent TDS on many payments to be merged into 2 per cent TDS and 20 per cent TDS on
repurchase of units by mutual funds or UTI stands withdrawn. TDS rate on e-commerce
operators reduced from 1 per cent to 0.1 per cent. Now credit of TCS will be given on TDS
deducted from salary. Budget decriminalized delay of payment of TDS up to the due date of
filing of TDS statement. Standard Operating Procedure soon for simplified and rationalized
compounding guidelines for TDS defaults.

On Capital gains, short term gains shall henceforth attract a rate of 20 per cent on certain
financial assets. Long term gains on all financial and non-financial assets to attract 12.5 per
cent rate. Limit of exemption of capital gains has been increased to ₹1.25 Lakh per year to
benefit lower and middle-income classes. Listed financial assets held for more than a year
and unlisted assets (financial and non-financial) held for more than two years to be
classified as long term assets. Unlisted bonds and debentures, debt mutual funds and
market linked debentures will continue to attract applicable capital gains tax.

Acknowledging that GST has decreased tax incidence on common man and terming it as a
success of vast proportions, Union Finance Minister Smt Nirmala Sitharaman said that GST
has reduced compliance burden and logistics cost for trade and industry. Now the
Government envisages further simplifying and rationalizing the tax structure to expand it to
remaining sectors. Budget also proposed to further digitalise and make paperless the
remaining services of Customs and Income Tax including rectification and order giving eIect
to appellate orders over the next two years.

Custom duties have been revised to rationalize and revise them for ease of trade and
reduction of disputes. Giving relief to cancer patients, Budget fully exempted three more
cancer treating medicines from custom duties, namely, Trastuzumab Deruxtecan,
Osimertinib and Durvalumab. There will be reduction in Basic Customs Duty (BCD) on X-ray
machines tubes and flat panel detectors. BCD on mobile phones, Printed Circuit Board
Assembly (PCBA) and mobile chargers reduced to 15 per cent. To give a fillip to processing
and refining of critical minerals, Budget fully exempted custom duties on 25 rare earth
minerals like lithium and reduced BCD on two of them. Budget proposed to exempt capital
goods for manufacturing of solar panels. To boost India’s seafood exports, BCD on
broodstock, polychaete worms, shrimps and fish feed reduced to 5 per cent. Budget will
foster competitiveness of Indian leather and textiles articles of export. BCD reduced from
7.5 per cent to 5 per cent in Methylene Diphenyl Diisocyanate (MDI) used for manufacture of
spandex yarn. Custom duties on gold and silver reduced to 6 per cent and on platinum to 6.4
per cent. BCD on ferro nickel and blister copper removed, while, BCD on ammonium nitrate
increased from 7.5 to 10 per cent to support existing and new capacities in pipeline.
Similarly, BCD on PVC flex banners increased from 10 to 25 per cent considering the hazard
to environment. To incentivize domestic manufacturing, BCD on PCBA of specific telecom
equipments increased from 10 to 15 per cent.
For dispute resolution and dispose-oI backlogs, Union Finance Minister proposed Vivad se
Vishwas Scheme, 2024 for resolsution of certain income tax disputes pending in appeal. The
monetary limits for filing appeals related to direct taxes, excise and service tax in High
Courts, Supreme Courts and tribunals has been increased to ₹ 60 Lakh, ₹ 2 Crore and ₹ 5
Crore, respectively. Further to reduce litigation and provide certainty in international
taxation, scope of safe harbour rules to be expanded and transfer pricing assessment
procedure to be streamlined.