India Budget 2024 - An Overview & Key Highlights |
HIGHLIGHTS
On July 23, 2024, India`s Minister of Finance and Corporate Affairs, Mrs. Nirmala Sitharaman, presented the Union Budget for 2024-25. It is the first budget after elections for the third-term government of Prime Minister Narendra Modi. The budget focuses on notable tax reforms, along with support for agriculture, employment, and MSMEs.
Under Direct Taxes, the Budget promotes investment and job creation by offering incentives for the International Financial Services Centre (IFSC). It also outlines a comprehensive review of the Income Tax Act, aiming to consolidate changes into a Direct Tax Code. A major reform is the planned withdrawal of angel tax starting April 2024, which is expected to benefit startups, along with the removal of the equalization levy. TDS rates will be rationalized, though investors may be concerned about the removal of indexation benefits for capital gains. The time limit for reassessment in search cases is reduced from 10 years to 6 years, while capital gains tax rates are adjusted: short-term gains stay at 20%, but long-term gains are cut to 12.5%, with increased exemption limits. The standard deduction for personal income tax has been raised from INR 50,000 to INR 75,000, and revised income tax slabs aim to stimulate domestic consumption.
Under Customs Laws, the amendment of Section 28 DA to accept various proofs of origin simplifies business operations. Customs duties are notably rationalized for components like PCBA and battery parts, with extended exemptions for targeted sectors such as textiles and Electric Vehicless.
The CGST Act 2017 undergoes reforms to streamline compliance, including the exclusion of Extra Neutral Alcohol from central tax and enhancing ITC claims. A new Section 74A sets uniform time limits for issuing demand notices from FY 2024-25 onwards, with adjustments in timelines based on the nature of the case. The pre-deposit amount for appeals has been reduced, easing financial burdens. An amnesty scheme for past GST disputes is introduced to encourage timely settlements. However, significant issues like rate rationalization and the long-delayed establishment of GST Tribunals remain unresolved.
PIO TV has attached a summary the key proposals of the Budget as tabled in the Finance Bill, 2024. The key highlights were made available by the Government.
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