Indian Budget 2024 Presentation, Analysis, Calculators

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What is Budget?

A budget is a financial plan for a specified period say Year in general. The Government of India i.e., Ministry of Finance after consultation with all the other ministries prepares the annual budget. The budget will be generally presented by the Finance Minister on the first day of February in Parliament. The proposed budget will come into effect from April 1st of the respective year.

Why Budget 2024 is unique?

Despite the fact that it is an interim budget for 2024 in light of the forthcoming general elections that year, it is distinctive in that the present administration has presided over it for more than nine years and is now in a position to confidently declare tax changes and reforms. In light of this, Indian taxpayers, businesses, CEOs, CFOs, entrepreneurs, and founders of startups are extremely interested in the interim budget.

A remarkable achievement thus far is the Indian economy's capacity to endure challenges and expand its GDP by 6.4% (as of October 2023). It is expected that Budget 2024 will demonstrate a strong commitment to the "Make in India" campaign, which seeks to empower India to independently procure technology and defense supplies.

Indian Budget 2024 a Straight talk on Expectations

Expectations before Budget

List of expectations / recommendations for the Indian union budget 2024 were originally published on Jan 11th 2024 @ Indian Budget 2024 | Pre-Budget Expectations

Key Takeaways & Analysis

A Well rounded interim budget, focus on growth and stability of the Indian economy for future

No major changes to taxes in either Income Tax, GST and the Corporate tax structure.

The middle-class salaried-friendly budget proposed for the fiscal year 2023-24 remains unaltered. This budget grants salaried individuals a tax relief of up to Rs. 7L, amounting to a benefit of 25K to 45K.

Push towards green economy to encourage "households" use solar power under Govt. subsidy scheme is a great welcome

Additional support was provided regarding tax compliance, and the significance of nameless, faceless income tax investigations was emphasized.

What are we missing ?

There was no significant announcement regarding Farmers. We anticipate seeing more information once the budget is released.

Budget 2024 Highlights

Taxes in General

Income Tax

As the 2024 Budget Session is an interim budget, no significant adjustments to income tax were proposed. Possible changes in the upcoming full budget that is going to be announced in July 2024.

Major Changes in this budget

Tax incentives for venture capital funds, pension funds, and sovereign wealth investments will be extended through March 2025.
The government is going to cancel disputed direct tax demands as follows
- Upto FY 2009-10 — Rs 25,000
- From FY 2010-11 to FY 2014-15 — Rs 10,000
Tax benefits for startups, investments made by sovereign wealth, pension funds will be extended to March 2025

Below is a recap from the Budget 2023

that is expected to be applicable for FY 2024-25 as well

A relief for MSME’s and professionals is provided under presumptive taxation scheme. The threshold under 44AD is increased to Rs 3 crores from Rs 2 crores and threshold under 44ADA is increased to Rs 75 lakhs from Rs 50 lakhs.
Rebate u/s 87A has been increased to Rs 7 lakhs from Rs 5 lakhs under new tax Regime. This is not applicable for Old tax regime.
The highest surcharge rate of 37% is decreased to 25% under New Tax Regime. Taxpayers with taxable income of above Rs 5 crores is required to pay only 25% surcharge instead of 37%.

Income Tax slab rates under New Tax regime has been changed which is as follows.

From FY 2024-25 (per new Budget 2024)

S.No	Slab	Tax Rates
1	Upto Rs 3,00,000	Nil
2	From Rs 3,00,001 to Rs 6,00,000	5%
3	From Rs 6,00,001 to Rs 9,00,000	10%
4	From Rs 9,00,001 to Rs 12,00,000	15%
5	From Rs 12,00,001 to Rs 15,00,000	20%
6	More than Rs 15,00,000	30%
with these new rates, one may save Rs.25,000 to 48,000

From FY 2020-21 to FY 2022-23 ( for comparison)

S.No	Slab	Tax Rates
1	Upto Rs 2,50,000	Nil
2	From Rs 2,50,001 to Rs 5,00,000	5%
3	From Rs 5,00,001 to Rs 7,50,000	10%
4	From Rs 7,50,001 to Rs 10,00,000	15%
5	From Rs 10,00,001 to Rs 12,50,000	20%
6	From Rs 12,50,001 to Rs 15,00,000	25%
7	More than Rs 15,00,000	30%

The Tax exemption limit is increased to Rs 3 lakhs for the taxpayers under New Regime
Leave Encashment exemption on retirement of non-government salaried employees is increased to Rs 25 lakhs from Rs 3 lakhs
New tax regime will be the default tax regime. However taxpayer can continue to avail the old tax regime
The deduction from capital gains on investment in residential house u/s 54 and 54F is capped at Rs 10 crore. This impacts very few people in the country
Deduction for expenditure on payments made to MSME's will be allowed only when payment is actually made
w.e.f 01st Apr 2023, if aggregate of premium for life insurance policies issued on or after 01st Apr 2023 is above Rs 5 lakhs, income from only those policies with aggregate premium upto Rs 5 lakhs shall be exempt
TDS Rate on EPF withdrawal in Non PAN cases is reduced to 20% from 30%
Minimum threshold of rs 10,000 for TDS deduction on online gaming is removed
The threshold for TDS on Cash withdrawal from co-operative banks is increased to Rs 3 crores
Date of incorporation for startups for tax benefits is extended to 31st Mar 2024 from 31st Mar 2023
The benefit of carry forward of losses on change of shareholding of start-ups is extended to 10 years from 7 years
New Co-operatives which will commence manufacturing activities till 31st Mar 2024 will get a lower tax benefit of 15%