The Finance Minister’s recent budget details several significant changes and proposals in the tax regime and various government initiatives:
- Tax Regime Revisions: The new tax regime will feature a revised tax rate structure with lower rates for various income slabs. Individuals earning up to Rs 3 lakh will have no tax liability, while those earning between Rs 3-7 lakh will be taxed at 5%, Rs 7-10 lakh at 10%, Rs 10-12 lakh at 15%, Rs 12-15 lakh at 20%, and those earning above Rs 15 lakh at 30%. Additionally, the standard deduction has been increased to Rs 75,000 from Rs 50,000.
- Corporate Tax and Securities Transactions: The corporate tax rate for foreign companies will be reduced to 25%. Securities Transaction Tax (STT) on futures and options (F&Os) is proposed to increase to 0.02% and 0.01%, respectively.
- Capital Gains and Angel Tax: Long-term capital gains on financial and non-financial assets will be taxed at 12.5%, with an exemption limit set at Rs 1.25 lakh per year. Angel tax will be abolished.
- Charities and Bonds: The two tax exemption regimes for charities will be merged into one. Unlisted bonds, debentures, debt mutual funds, and market-linked debentures will now be taxed at slab rates.
- NPS Vatsalya Program: The NPS Vatsalya program allows parents to invest on behalf of their children, with the account transferable to the child upon reaching adulthood.
- FDI Simplification: Rules for Foreign Direct Investments (FDIs) will be simplified to encourage inflows and promote the use of the Rupee for overseas investments.
- Customs Duties: The duty on printed circuit board assemblies (PCBAs) for telecom equipment will increase by 10-15%. Customs duty on gold and silver will be reduced to 6%, and on platinum to 6.4%.
- Energy and Rural Development: The PM Surya Ghar Muft Bijli Yojana will provide free electricity up to 300 units per month for 1 crore households. A budget of Rs 2.66 lakh crore is allocated for rural development, including infrastructure and housing.
- Employment and Skilling: A comprehensive scheme will provide internships to one crore youth over five years. Mudra loan limits will increase from Rs 10 lakh to Rs 20 lakh. Additionally, there will be support for MSMEs, particularly in manufacturing, with a new credit guarantee scheme and funding for technology.
- Infrastructure and Tourism: The government will support the development of corridors for Vishnupad and Mahabodhi Temples, promote tourism in Nalanda, and assist in constructing new airports and medical facilities.
- Housing and Land: Plans include digitizing land records using GIS, launching Phase 4 of the PM Gram Sadak Yojana to build roads in rural areas, and encouraging states to moderate high stamp duties.
- Research and Innovation: There will be a focus on transforming agricultural research to improve productivity and climate resilience, alongside development in nuclear energy and space economy sectors.
Overall, the budget aims to enhance tax efficiency, support economic growth, improve infrastructure, and promote employment and skilling across various sectors.
