Live Updates: Union Budget 2024 New Regime of Income Tax

Understanding to Budget

A budget is a management instrument used by any entity, financially, assuring different dimensions of expenses, revenues, objectives. It is the evaluation of economic efficiency and the result of the management centers. The final evaluation done after comparative economic efficiency is know as budget.

To summarize, the annual estimated receipts and expenses of of the government declared in every financial year in the form of annual statement. To quote

Taylor says 'Budget is a financial plan of a government for a definite period.'

Origination of Budget

In the year 1860, 7th of April the East India Company introduced the Budget for the first time. The East India Company introduced it to the British Crown.

In the year 1869 , 18th February the first Budget was presented by James Wilson. The Indian Viceroy had its first advisor as to the Indian Viceroy named Mr Wilson. Mr Wilson was a Scottish Liberal Politician and Economist.

The First Prime Minister of India

Sir RK Shanmukhan Chetty , was the constitutional advisor to the Chamber of Princess. Novembor 26th ,1947 Mr Chetty presented the first budget of Independent India. 80 Budgets were introduced then in India. For the British rule our country followed the UK budget in many ways and many years.

The Budget after Independence of India

In the year 1949-50, the five year plans ,formation of Planning Commission financial statements of Princely states included all in John Mathai Budget. The post Independence India unanimously formed the budget on inflation presented by John Mathai.

The year 1951-1952

Chintaman Dwarakanath presented the first interim Budget in the year 1951-1952. The First five Year plan proposed the rise of taxes. It includes Corporation Tax and the levy of 5 % additional charges on all income tax and super tax rates. He enunciated his budget with a story teller in which a man proposes to submit Rs 5 annually to the bank for he has no slab of paying taxes to the government. But he also ensured such spirit must be encouraged to every citizen of the country.

A budget has no inclusion of foreign relations but in the year 1950 foreign inflow of financial aid was a part. Russia ,United States of America, and United kingdom were the major sources of such flow. His tenure inaugurated the National Council of Applied Economic Research was established. Mr Dwarakanath served as the founding member of its governing body

1956-1958 and 1964-1966

TT Krishnamachari an industrialist introduced the wealth tax and expenditure tax in the year 1956. The two levied tax endorsed the spirit of Krishnamachari to patriotic voice described his feelings for equality and positive social improvement. He also believed that it was towards the advancement of economic policy when the conscience and solidarity of people were raised to the highest level.

His tenure during 1964-1965 he disclosed for the first time the hidden income scheme in India

Jawaharlal Lal Nehru budget as Union Finance Minister in 1958-59.

Jawaharlal Nehru the First Prime Minister of India in the year 1956 introduced the gift tax. Charitable Institution , Government Companies Corporation that was established under Central or State Acts were exempted. The Public Companies that had an affair of six and more people at controlling were also exempted. There were few exemption to the Estate Duty Act. The terms Nehru served were from August 1, 1956 to August 30 1956 and again on February 14 1958 to March 22 1958

Morarji Desai Budget

Five annual and one interim budget was introduced in the second tenure of both Finance Minister and Deputy Prime Minister. In the year from 1959-1960 and 1963-64 the Annual budgets were presented. In the year 1962-63 the interim budget were presented. Morarji Desai also presented the annual budgets from the year between 1967-68 and 1969-70. The interim budget was also presented from 1967-1968

A glimpse of Budget in the year 1980-81

Shri R. Venkataraman the then finance minister presented the Budget for the year 1980-1981. It said that there was a declination of gross national product by 3 % in the year 1979-1980. The declining factors involved were the 10% fall in agricultural production and one percent fall in industrial production. The economic scenes were also one of the concerning cause for the serious deficiencies of power coal and railway sectors.

In the year 1979-1980 the production of coal and lignite were 106 million tones, and was considered marginally better than four years ago.

1979-1980 the declination showed the results by 3.3% from the year 1978-1979. The declination was said to be highest in terms of tones of Railway Revenues in 1967-1977.

He also mentioned many other points that highlighted the country's economy. At the last he said that his budget represented a modest contribution. It was aimed to restore the stability ,growth, and social justice. The workers in the fields or factories, power station or ports, railways or coal mines the necessary contribution will declare the country as successful

The Central Government's constitutional validity

Article 113 of the constitution says that all expenditure to be submitted in the form of Demands for Grants to Lok Sabha. It is examined by the departments related standing committee . Followed by the discussion and approval in Lok Sabha. The Consolidated Fund of India permits and passes expenses of the Appropriated Bill on the demand of the Lok Sabha authorization. The Union Budget presents the Central government expenditure in every financial year.

The Union Budget 2023-24

The present Finance Minister Ms Nirmala Sitharaman presented the Union Budget 2023-24 on February 1, 2023. Expenditures that included was Rs 45,03,097 crore in the 2023 financial year.

Rs 35,02,136 crore Revenue Expenses for the 2023-24. 1.2% inclination from the revised estimates 2023-24.

41% of the Interest Expenditure in the revenue receipts.

37.4% inclination of the Revised Estimates in 2022-23. Rs 10,00,961 crore was the Capital expenditure. Its an expenditure derived out on transport infrastructure and capital loan to states.

2.9% of GDP lower than the revised revenue deficit of 4.1% in 2022-23.

6.4 % of 2022-23 and 5.9 % of GDP was the declination than the revised fiscal deficit.

Union Budget 2024-25

The difference between total expenditure and Revenue Receipts that also includes Non-Debt Capital receipts are Fiscal Deficit. The total borrowing of requirement of government is the Fiscal Deficit. Revenue Deficit are the excess of revenue expenditure over revenue receipts. The difference between revenue deficit and grant in aid for creating of capital assets is the effective revenue deficit. Effective Capital mean the total of Capital Expenditure and Grants-in-aid for creating capital assets.

Major Tax and Job Reforms Finance Minister Nirmala Sitharaman

Abolishing Angel tax for all classes of investors in startups is one of the significant announcement in the Budget 2024-25. The announcement also informed the upraise of standard tax slab deduction for salaried tax payers from Rs 50000 to 75000. The withdrawal of 2% equalization of tax levied. It surpassed the Budget for record of Morarji Desai. The new Financial year 2025 will increase the deduction from Rs 50000 to 75000 under the new income tax regime. The Budget presents priorities in nine opportunities generating employment are in the field of Research and Development ,Energy Security, Productivity and Resilience in Agriculture, Urban Development , Infrastructure , Innovation ,Employment and Skilling to name a few. There is a major announcement in the Budget for financial boost in the infrastructure in Bihar and Andhra Pradesh.

Family pension deduction: 

Rs 15000 to Rs 25000 is the limit for deduction for the family pensioners

Long-term capital gains (LTCG) tax

10%to 12.5% increase in the long term capital gains

Short-term capital gains (STCG) tax

20% tax levied on Short Term capital gains on some assets. The applicability of income tax will be on other financial and non-financial assets

The announcement clarifies the incentive for Long Term Holdings and the stretch between the Short Term capital gains and long term capital gains. The limit to exemption on certain financial assets has increased to Rs 1.25 lakh annually.

0.1 % and 0.2% hike in Securities Transaction Tax and on Futures and options. It can be analyzed the distinctive removal of retail investors from trading in the line of market risk.

Finance Minister Nirmala Sitharaman announced Rs 11,500 crore for flood mitigation in Bihar

Significantly the Finance minister also announced funding for the state of Assam under flood management project. Along with Himachal Pradesh ,Uttarakhand , and Sikkim to be supported for the impact of recent natural disaster.

The Agriculture and Allied sectors has an announcement of Rs 1.25 crore

Rs 1.25 crore allocated for agriculture and allied sectors. The Budget 2024-25 has given importance on productivity and resilience. The Budget allowed 400 districts to adopt measures that includes horticulture output, Digital Public Infrastructure implementation . It has also said that it will introduce 109 high yield climate resistant crop variety.

One crore farmers will be targeted to expand natural farming over two years. The crop will be digitized to have a precise estimates for the next kharif season. Self sufficient oilseeds pulses through major increased production ,storage and marketing is also targeted to achieve in the Budget plan. It also mentioned developing vegetable clusters near consumption hub and nucleus breeding centres for Shrimp Brood stocks

Custom Duty changes in the Budget 2024

6% reduced for both gold and silver

6.4% reduced for platinum

Custom Duty cut on Ferronickel and Blister Copper

10 to 15 % increase on telecom duty and on specific telecom equipments

5% duty reduced on Brood Stocks , Shrimps and Fish Feed

10% duty increased on Ammonium Nitrate

Duty increased to 25% of non-biodegradable plastics

15% Duty decreases on mobile phone ,mobile chargers and PCBA

7.5% to 5% duty reduced on Methylene Dyphenyl Dissocyanate for spandex yarn production

Phased Manufacturing Programme has changes of duty on X-Ray Tubes and Flat Panel Detectors

Budget-2024 Explained

It is important to have few questions for self assessment.

As a common man are the expected changes well justified in the Budget addressed by Finance Minister Nirmala Sitharaman. Jobs, taxes ,housing , loans , may be the few burdens to be lightened.

The major focus she gave on to are 'farmers, the poor, women, and youth' to which she referred to as Four major castes. The themes that significantly drawn an attention to are employment, skill development and the middle class.

The increased STT rates for 0.1% and futures to 0.02% may not have good impact on with investors advised CA Pitam Goel, Co-founder of Tattvam Group. He further analyzed the investors may be in dejection for the increase in capital gain tax. The increase in capital tax is 12.5% in the listed equity instruments. He suggested that the tax buy-back must be opted for profit distribution as well as internal structuring

The simple for Understanding the Tax slabs for the living income must annually earning the following slab

Up to Rs 3 lakh: Nil

Rs 300,001 to Rs 7 lakh: 5%

Rs 700,001 to Rs 10 lakh: 10%

Rs 100,001 to Rs 12 lakh: 15%

Rs 120,001 to Rs 15 lakh: 20%

Above Rs 15 lakh: 30%

PM Poshan Scheme supports upto 10 lakh education loan in higher education institutes of India

The Budget today announced the upgradation of 1000 Industrial Training Institutes along with courses to offer industrial skill training.

The Budget very importantly announced the role of CSR in the companies. The implementation process will take place by allowing Rs 5000 to students as stipends and Rs 6000 as one time financial assistance

PM Poshan scheme has enhanced its budget allotment from Rs800 crore to Rs 11,600 crore for the benefit of nutritional support to school children
Rs1.5 crore is allocated for the sector employment, skill development, education. If studied in domestic institutes for higher education government will provide Rs10 lakh education loan and e-vouchers offering 3% subsidy to 1 lakh student annually.

Grants for Central universities

Rs15,928 crores is allocated for the year of 2024-25

Establishment of a new Medical Institute in Bihar and an overall improvement of the healthcare and infrastructure

Rs 255 crore for Artificial Intelligence, unless the country has the drive for advanced technology driven education

Rs 162 crore for Research and Innovation and Apprenticeship

Rs 600 crore for National Apprenticeship Training Scheme

According to section 139AA of the Act mandate ,inter-alia that every person who is eligible to obtain Aadhaar number shall, on or after the 1st day of July, 2017, quote Aadhaar number in the application form for allotment of Permanent Account Number (PAN) and in the return of income.

If Adhar not furnished than application for permanent account number or in the return of income furnished by him.

Aadhaar enrollment ID cannot be used for these applications

There is a major announcement in the Budget plan 2024 about the usage

Aadhaar Enrollment IDs for Income Tax Returns (ITR) and PAN applications

From October 1st 2024 , one cannot quote Aadhaar enrolment ID in the application form for allotment of Permanent Account Number (PAN) in the return of income

Income Tax Return is equally important as paying Income Tax

Not paying ITR will go to jail in few cases.

File an income Tax Return for the 2023-24. The deadline to such filing is July 31st 2024 (exceptions to income tax audit)

There must be no outstanding tax liability

Neglect to such filing of Income Return will lead to imprisonment

Criticisms overhaul the budget by many. Lokesh Dhyani, Partner, Aekom Legal stated option to pay tax through self assessment is not a solution to ITR neither it exempts one from the tax liability. There will be notices or intimations to one from the concerned department.

The Budget will impose penalties for non- tax payers.

According to Section 234F

Rs1000 penalty fees for late filing on the income lesser than 5 lakh.

Rs5000 for more than 5lakhs

Last date is July 31st 2024

Late ITR filing is before December 31st, 2024

Section 234A of the Income Tax Act states

1% per month on the due amount from the due date

Section 140 A

Penalties to failure of self assessment payment

To note that the tax in arrears is the penalty fees. It means the penalty amount cannot be more than the amount in arrears in tax

Section 276CC applies the legal provision in the section for ITR not filed

Income tax clearance certificate is now mandatory to leave India

When a person leaves India , has to submit a certificate of clearance. The certificate of clearance is the income tax clearance certificate to leave the country says the Bill. Clause 71 of the Bill will lead to Income tax Act amendment of the Section 230 of the Act. It will be affected from 1st October, 2024.

This scope comes under the Black money Rules ,2015 tax liabilities.

Rs 2.66 lakh crore is announced for the Rural Development in the Budget

The allotment also includes development for rural infrastructure.

3 crore Additional Houses to be constructed under the Prime Minister Awas Yojna both in Urban and Rural areas.

There will be boost in both consumption and spending of rural segments on the distribution of funds.
There will be green shoots of revival said the CEO of Dabur company Mohit Malhotra

Income Tax Reassessment

Income beyond Rs 50,000 lakhs can be reopened for Income Tax reassessment after 3 years

The Limit to such reopening is 5 years

The search cases will have maximum an extension of 6 years

Income from Rent

Income from House Property is a classification for another source of income for people who rent out their property whole or a part of it. Earlier the profit and gains was a classification to such income for decrease liability

Tax collected at Source

The tax collection can be done by the parents who invest in the names of their children. The parents can claim credit from Tax Collected sources on particular investment.

The Central Board for Tax Collection is also directed in the Budget to set rules and regulation for the individual investors

15% to 6% Custom Duties Cut

Deduction of custom duties in Gold and Silver is likely to raise the demands in the market

Employee Stock ownership Plan and investors in foreign companies must also file ITR. Rs 10 lakh Penalty on such failure to foreign assets

Foreign assets for value of Rs 20 lakhs may not require for Penalties.

The answers to Union Budget 2024 Nirmala Sitharaman will reply today. the answers to Finance Bill there will be a reply in August 7th

The Authorisation and Appropiation of the Bill no 3. to Jammu and Kashmir from 2024-2025 regarding Consolidated Fund of the Union Territory

The elevated taxation , demonetization and the also included halwa ceremony in the criticism of the Opposition party leader Rahul Gandhi

The budget halwa is a distribution without any OBC ,Tribal , and a Dalit Officer.

Rahul Gandhi mocked and advocated the philosophy of Chakravyu of trapping the unemployed youth, debted farmers, middle class taxation, terrorised tax of MSME , Jawan in fire trials and injustices with minorities.

He also mentioned the lowest investment in 20 years , 2.5% allocation for education