Income Tax Rates Unchanged, Fiscal Deficit Projected for FY24 and FY25: Highlights of Union Budget 2024
The Union Budget 2024, presented by Finance Minister Nirmala Sitharaman, has brought several key highlights and announcements. In this budget, income tax rates remain unchanged, while projections for the fiscal deficit have been made for FY24 and FY25. Here are the key takeaways from the budget: Income Tax Rates Remain Unchanged One of the significant announcements in the budget is that income tax rates will remain unchanged. This decision provides stability and continuity for taxpayers and is expected to have a positive impact on individuals and businesses. Fiscal Deficit Projections In her budget speech, Finance Minister Nirmala Sitharaman projected the fiscal deficit for FY24 at 5.8% of GDP. Furthermore, she projected a lower fiscal deficit of 5.1% for FY25. These projections indicate the government's efforts to manage the deficit and maintain fiscal discipline. Tax Benefits and Exemptions The budget also introduced several tax benefits and exemptions. The government withdrew income tax demands up to ₹25,000 for the period up to 2009-10 and ₹10,000 for the years from 2010-11 to 2014-15. These changes are expected to benefit approximately one crore taxpayers. Support for Middle-Class Homebuyers To support the middle class living in rented houses, the government announced a scheme to help them buy or build their own homes. This initiative aims to provide affordable housing options and promote homeownership among the middle-class population. Extension of Tax Benefits for Start-ups and Investments The budget extended tax benefits for start-ups and investments made by sovereign wealth or pension funds for an additional year until March 31, 2025. This measure is expected to encourage investments in the start-up ecosystem and promote economic growth. Increased Capital Expenditure The budget allocated a higher capital expenditure of ₹11.11-lakh crore, a significant 11% increase from the previous year. This increased spending on infrastructure projects and development initiatives is expected to stimulate economic growth and create employment opportunities. Projections for Gross Tax Revenue and Collection Targets The government set a target of ₹38.31-lakh crore for gross tax revenue in FY25, representing an 11.46% increase from the previous year. The direct tax collection target was set at ₹21.99-lakh crore, while the indirect tax target was set at ₹16.22-lakh crore. These targets indicate the government's focus on revenue generation and tax compliance. Borrowing and GDP Growth Projections For the next fiscal year, the government plans to borrow ₹14.13-lakh crore, which is lower than the borrowing amount for the current fiscal year. The nominal GDP growth for FY25 is projected at 10.5%, reflecting the government's expectations for economic expansion and recovery. Reforms and High-Powered Panel The budget emphasized the government's commitment to next-generation reforms, which will be developed in consultation with states and stakeholders. Additionally, a high-powered panel will be formed to address population growth challenges and demographic changes, highlighting the government's focus on long-term planning and policy implementation. With income tax rates remaining unchanged, the focus is on providing stability for taxpayers. The projections for fiscal deficit, capital expenditure, and tax revenue targets indicate the government's commitment to managing the economy and promoting growth. The budget also introduces measures to support middle-class homebuyers, extend tax benefits for start-ups, and enhance infrastructure development. These initiatives aim to boost economic activity, create employment opportunities, and pave the way for the country's progress.
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