Finance Minister M Nirmala Sitharaman’s eight consecutive budget:
Our economy is the fastest growing economy. The next five years presents a unique opportunity to India.
Budget focuses on growth infrastructure and middle class.
This budget focuses on Ten broad areas:
1. Agriculture is the first engine
- PM dhan dhanya krishi yojna- to develop 100 districts, improve irrigation facilities , availability of long term and short term credits
- To benefit 1.7 crore farmers
- To address under employment in agriculture and rural areas
- To focus on rural youth, women farmers
- Atma nirbharta in edible oils:
- Cultivating areas and better affordability
- The govt to launch 6 year mission in this area
- Central agencies like Nafed to procure such
- Comprehensive program of vegetable and fruits: people becoming aware of healthy and nutritious foods
- Appropriate institutional mechanism to set up
- Makhana board in Bihar- to be established and to promote to Makhana farmers
- Pest resistance and climate resistance
- India’s ranks second largest in fish production- promote harnessing of fisheries
- Mission of cotton productivity to promote extra long cotton staple varieties – to promote textile sector
- Kishan Credit cards- for 7.7 crore farmers
- Loans taken to be enhanced from 3 lacs to 5 lacs
- To augment urea supply- plant to be established in Assam
- India posts to be transformed as a major logistics organisation.
2. MSME as second engine
- 5.7 crores msmes
- Generating 36% as manufacturing contributions
- 1 crores are registered
- Responsible for 45% of exports
- Various schemes like credit guarantee covers to be enhanced
- For startup’s, loans enhanced for 27 focus sectors
- For well run exporter msmes, loan to be enhanced
- For micro entt regd on Udyam portal- loan covers and credits to be enhanced
- New fund of funds with expanded scope to be set up
- Term loans to be provided
- Online capacity building and managerial skills to be enhanced
- In labor intensive sectors, to enhance quality
- For footwear industry, non leather quality footwear – scheme to be launched
- For toys sector- implement a scheme to make india a global hub for toys – to create high quality make in india brand
- To establish Unit in Bihar To support food technology, to skill entrepreneurship
- Govt to set up national manufacturing mission to support manufacturers
- To support clean tech manufacturing, ev cells, high turbines , grid scale batteries
3. Investment as third engine
- Investing in people- making women, girls saksham with nutritional supports
- 50,000 Atal tinkering labs to set up in 5 years
- Broadband connectivity to all govt secondary schools in rural areas
- To provide digital books to students
- National centre for excellence in skilling- 5 centres to be set up – skill certification
- Expansion in capacity in IITs
- Centre of excellence in AI for education- three centres of AI were announced in 2023
- Expansion of medical education- next year, 10,000 additional seats to be added in medical colleges making it 75000 seats in next 5 years
- 200 centres to be established in 2025-26
- To assist urban poor and workers, scheme to be established
- Enhanced loans from banks and UPI linking
- Social security scheme for online workers and gig workers – registration on e shram portal – to support 1 crore gig workers
- States to be encouraged too
- Support to states for infra structure – for capital expenditure
- To plough back capital of 10 lac crores back in infrastructure
- Urban structure reforms- to set up urban challenge fund- for creating better water and sanitation facility – 50% cost to be funded from bonds, bank loans
- Power sector reforms- to increase capacity of electricity companies
- Nuclear energy mission – development of 100 giga watt – amendments to nuclear energy act to be proposed – outlay of 20,000 crores for nuclear reactors
- Ship building- financial policy to be revamped – large ships to be included in infra harmonised list – to increase capacity of ships
- Maritime development fund with corpus of 25000 crores to be set up – to have 49% govt contribution
- Udaan- connected 88 ports and operationalised – to take it 120 additional destinations- to support helipads and smaller airports – to add 4 crore flyers
- Greenfield airports in Bihar
- Western Kosi canal project – benefiting farmers of Mittranchal Bihar region
- Mining – policy
- Swami- 20,000 units completed and another 40,000 units to be completed by 2026
- Swami fund 2 to be set up for 15000 crore rupees
- PM Gati shakti data – enhanced
- Top tourist destination sites to be developed in various states
- Organising skill development program
- Providing performance linked loans
- Special focus on destinations on life of Lord Buddha
- Investing in innovation- allocating 20,000 crores rupees for this
- In next 5 years, 10,000 fellowships to be enhanced in IITs tech research
- Geo special infra to be set up
- Modernisation of land records,
- Investment limit for MSME classification to be made 2.5 times
- Turnover limits for MSME classification to be doubled
- Will give MSMEs confidence to grow and create jobs for youth
4. Export as fourth engine
- A digital public infra Bharat Trade Net to be set up- BTN to be aligned with international practices
- Sectors to be identified
- Huge opportunity to industries
- Govt to support domestic
- National framework to support states to be set up- building bye law reforms
- Cargo screening to be enhanced
- Faceless assessment, Vivad se Vishwas Scheme, self assessments- Trust first Scrutinise later
- To introduce direct tax bill next week
- Services of india post payment bank to be set up
- Public sector banks to support
- Central KYC registry to be rolled out in 2025
- Company mergers for fast tracking to be simplified
- To encourage sustained investment, current model BIT to be made more friendly
- Regulations to keep up with global policy regulations
- Impact of current financial regulations to be seen
- More than 180 criminal provisions were de criminalised
- Fiscal deficit to be checked and reduced
- Revised estimates of receipts provided which is 4.8% of GDP
- for 2025-26, the estimates are provided and fiscal deficit estimates at 4.4% of GDP
Indirect taxes-
- Aim to rationalise duty structure
- Provide relief to common people
- Removal of 7 tariff rates – only 8 tariff rates to remain
- Appropriate cess on few items
- Levy not more than one cess and surcharge- exempt social surcharge
- Provide relief to patients- full exemption of 36 life saving cancer drugs
- Full exemption and rationalisation of manufacturing of above drugs
- Support to domestic manufacturing – promotion of agro textiles, revise BCD rates on knitted fabrics
- Electronic goods – to increase duty BCD on flat panel display from 10 to 20%
- For open cells, duty to be reduced
- Custom duty cut for lithium ion batteries
- Reduce BCD on Telecommunication
- Extend time period from 6 months to 12 months
- Exempt BCD on blue leather
- Reduce BCD on frozen fish paste
- Reduce BCD on fish hydro
- Ethernet to become cheaper
- Provisional assessment of customs – time limit fixed to 2 years maximum extendable by 1 year
- Scheme to Pay duty with interest but without penalty – to incentivise self declaration – not applicable for audit proceedings
Direct tax
- For new income tax bill to carry forward same spirit of Nyaya
- New bill to be simple to understand
- Govt had taken steps
- Personal income tax reforms with special focus on middle class
- Ease of Doing business
- Rationalisation of tds and tcs
- Reducing number of tds and tcs rates
- Increasing threshold limits
- Annual limit of 2.40 lacs increased to 6 lacs for rental tds
- TCS on remittances under LRS to be increaed to 10 lacs fm 7 lacs
- Both tds and tcs applicable on sale of goods- to remove tcs – only tds is applicable
- Higher tds rates only on non pan cases
- Late filing of tcs returns also de criminalised
- Updated ITR U – 90 Lac taxpayers filed
- Extend Updated returns time limit to 4 years
- Reduce compliance burden for small charitable organisations by extending time to 10 years
- For self occupied property, benefit of 2 self occupied properties allowed
- Introduce arms length price for block period of 3 years for transfer pricing
- NSS – exempt withdrawals after 29.7.2024
- Appellate orders to be digital
- 33000 tax payers availed of vivad se Vishwas scheme
- Presumptive taxation to non residents providing service to residents for electronic purposes
- Benefit of tonnage tax scheme extended
- Incorporation of start ups – period extended to 5 years
- IFSC- specific benefits to insurance offices, cut off date extended to 31.3.2030
- Provide tax certainty on gains from security – date of making investment extended to 2030
- Middle class provide strengths to the nation building – in recognition of their contributions- the threshold exemption limit raised to 7 lacs- now raised to 12 lacs under new tax regime
- Average income of 1 lacs under new regime with standard deduction of 75000
- This will boost consumption
Limit for tax deduction on interest for senior citizens to be doubled from 50,000 to 1 lakh
Tax rates
0 to 4 lacs nil
4 to 8 lacs 5%
8 to 12 lacs 10%
12 to 16 lacs 15%
16 to 20 lacs 20%
20 to 24 lacs 25%
Above 24 lacs 30%
Revenue of 1 Lac crore to be forgone in direct taxes
About the Author
CA Jatin Minocha runs a popular CA Practice at New Delhi by the name of Minocha & Company which he established in January 2002
It was formed with the objective to provide a wide array of services including audit, income tax, indirect tax and many other services in Delhi & NCR. It constitutes a team of finance & legal professionals from Industry, Banking & Financial fields having substantial exposure and expertise in their respective areas.
The company has a strong team of professionals with a collective expertise of over 20 years in these fields and has undertaken and successfully executed various assignments.
Company has considerable experience in the Industry and has managed audits and taxation work for various Pvt ltd companies , limited companies , multinational companies, banks, Govt Institutions, NRI and High Net worth Individuals.
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