Budget 2024: Emphasis on Employment, Incentives for New Taxpayers, and Support for Allies

Finance Minister Nirmala Sitharaman presented the first budget of Modi 3.0 today. The standard deduction in the new tax regime has been increased from Rs 50,000 to Rs 75,000. This Budget has also revised tax slabs under the new regime. Annual income up to Rs 3 lakh will now attract zero tax, income in the Rs 3 lakh-7 lakh bracket will be taxed at 5 per cent.

The rate will be 10 per cent for income between Rs 7 lakh -10 lakh, 15 per cent for Rs 10 lakh – 12 lakh and 20 per cent for Rs 12 lakh – Rs 15 lakh. Annual income over Rs 15 lakh will attract 30 per cent tax. Ms Sitharaman said salaried employees can save up to Rs 17,500 in income tax under the new tax slabs. The Budget has made no changes to the old tax regime, which a large section of professionals opts for.

Budget 2024 had a big announcement for professionals entering the workforce. Ms Sitharaman announced that the Centre will give one-month’s salary to those joining their first job. This amount will be provided as a Provident Fund contribution. The move, she said, will benefit 210 lakh youngsters.

The Finance Minister said this amount would be provided through the Direct Benefit Transfer route. First-time employees registered with EPFO will get a month’s salary — up to Rs 15,000 — in their PF accounts in three installments. Ms Sitharaman also announced reimbursement to employers up to Rs 3,000 per month for two years towards their EPFO contribution for each additional employee. Budget 2024 also proposed to raise the limit of exemption of capital gains on some financial assets to Rs 1.25 lakh per year.

The Finance Minister announced that angel tax will be abolished for all classes of investors. The first Budget of Modi 3.0 earmarked key projects for two states — Bihar and Andhra Pradesh. This comes after Nitish Kumar’s JDU and N Chandrababu Naidu’s TDP backed the BJP, which fell short of majority in this election, to cobble up the required numbers. Ms Sitharaman announced plans to develop expressways connecting Patna and Purnea, and Buxar and Bhagalpur and another connecting Bodhgaya, Rajgir, Vaishali and Darbanga.

Additionally, Bihar will get a two-lane bridge over Ganga in Buxar district. The Finance Minister also announced a 2,400 MW power plant at Pirpainti in Bhagalpur. Bihar is also part of the Purvodaya initiative announced by Modi 3.0 to step up development in the eastern part of the country. “We will formulate Purvodaya for all-round development of Bihar, Jharkhand, West Bengal, Odisha, and Andhra Pradesh,” the Finance Minister said.

In Andhra Pradesh, where the NDA swept the recently held Assembly polls, infrastructure projects in Railways and roadways will be prioritized, the minister announced. “Recognizing Andhra Pradesh’s need for capital, to facilitate support through multilateral development agencies, Rs 15,000 crore to be arranged for Andhra Pradesh for development of capital,” she said.