Revised tax slabs, allocations for food, health, education: All you need to know about Union Budget 2024-25

The finance minister announced significant allocations for centrally sponsored schemes such as Mahatma Gandhi National Rural Employment Guarantee Scheme, Pradhan Mantri Awas Yojana (Urban) and Jal Jeevan Mission. She also announced revised income tax slabs that could potentially help taxpayers see a net gain of around Rs 17,500 in a year.

What are the key takeaways from Budget 2024-25?

🔴 Total capital expenditure was projected to be Rs 11,11,111 crore, marking a 16.9 per cent increase over the revised estimates for 2023-2024. The effective capital expenditure is estimated at Rs 15,01,889 crore, an 18.2 per cent increase over the previous year.

🔴 Fiscal deficit is estimated at Rs 16,13,312 crore, which is 4.9 per cent of Gross Domestic Product (GDP), while the revenue deficit is projected at Rs 5,80,201 crore, which is 1.8 per cent of GDP. Fiscal deficit essentially shows the amount of money that the government borrows from the market.

🔴 The government also allocated funds for social sectors which include health (Rs 89,287 crore), education (Rs 1,25,638 crore), and rural development (Rs 2,65,808 crore).

🔴 While the expenditure on defence is allocated at Rs 4,54,773 crore, subsidies (food, fertilizer and petroleum) are estimated at Rs 3,81,175 crore.

🔴 Interest payments are projected at Rs 11,62,940 crore.

🔴 Revenue receipts are estimated at Rs 31,29,200 crore, while the net tax revenue to the Centre is projected to be Rs 25,83,499 crore. The non-tax revenue is expected to be Rs 5,45,701 crore. The total capital receipts (including non-debt and debt receipts) are estimated at Rs 15,50,915 crore.

Big Budget allocations

🔴 The government revised income tax slabs as part of the rationalisation exercise to reduce the burden on those who earn lesser incomes. The tax for a salary of up to Rs 3 lakh is nil, between Rs 3 to 7 lakh is 5 per cent, between Rs 7 to 10 lakh is 10 per cent, between Rs 10 to 12 lakh is 15 per cent, between Rs 12 to 15 lakh is 20 per cent, and over Rs 15 lakh is 30 per cent.

🔴 Standard tax deduction was proposed to be hiked from Rs 50,000 to Rs 75,000, while the deduction on family pension from Rs 15,000 to Rs 25,000.

🔴 Significant allocations were made for various centrally sponsored schemes, including MGNREGS (Rs 60,000 crore), PM Awas Yojana (Urban) (Rs 30,171 crore), Jal Jeevan Mission (Rs 70,000 crore), and Pradhan Mantri Gram Sadak Yojana (Rs 19,000 crore).

🔴 The total transfers to states and Union Territories with legislature are projected at Rs 22,91,182 crore, reflecting an increase of Rs 4,82,766 crore over the actuals for 2022-2023.

🔴 In a first, a Rs 1,000 crore venture capital fund has been announced to give a push to the space economy, towards the goal of five-fold expansion of the sector in the next 10 years.

🔴 Sitharaman also proposed a reduction in basic customs duty on gold and silver to 6 per cent and platinum to 6.4 per cent. She announced removal of basic customs duty on ferronickel and blister copper, while increasing the same to 15 per cent from 10 per cent on specified telecom equipment.

🔴 The FM also announced the abolishment of angel tax on investors in India, in a bid to boost startups. While the angel tax was first introduced in 2012 to deter the generation and use of unaccounted money through the subscription of shares of a closely held company at a value that is higher than the fair market value of the firm’s shares, its scope was widened even to non-resident investors from April 1, 2024, during last year’s Union Budget that saw strong opposition by startups.

🔴 The Pradhan Mantri Janjatiya Unnat Gram Abhiyan will be launched to improve the socio-economic condition of tribal communities. The scheme will adopt saturation coverage for tribal families in tribal-majority villages and aspirational districts. This will cover 63,000 villages benefitting 5 crore tribal people, Nirmala Sitharaman said in her speech.

🔴 The Budget also entails a scheme for providing internship opportunities to 1 crore youths in 500 top companies across the country in five years. This opportunity will come with an internship allowance of Rs 5,000 per month along with a one-time assistance of Rs 6,000.

Big push to Bihar and Andhra Pradesh

The Union Budget 2024’s focus on Bihar and Andhra Pradesh indicated a bid to ensure the stability of the current BJP-led NDA government by keeping numerically significant NDA allies in mind.

For Bihar, Sitharaman said the Union government will arrange financial assistance through aid from multilateral development agencies. The Vishnupad temple in Gaya and Mahabodhi temple in Bodh Gaya will get corridors on the lines of the Kashi Vishwanath temple corridor. Rajgir and Nalanda will be developed as tourism hubs.

Moreover, the Centre will also formulate a ‘Purvodaya’ plan for the all-round development of Bihar, Jharkhand, West Bengal, Odisha, and Andhra Pradesh. Meanwhile, Rs 15,000 crore has been allocated for the development of Amaravati as Andhra Pradesh’s capital.

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