I have two announcements to make for those opting for the new tax regime:

1. The standard deduction for salaried employees is proposed to be increased from 50,000 to 75,000 rupees.

2. In the new tax regime, the tax rate structure is proposed to be revised as follows:

– 0 to 3 lakh rupees: nil

– 3 to 7 lakh rupees: 5%

– 7 to 10 lakh rupees: 10%

– 10 to 12 lakh rupees: 15%

– 12 to 15 lakh rupees: 20%

– Above 15 lakh rupees: 30%

As a result of these changes, a salaried employee in the new tax regime stands to save up to 17,500 rupees in income tax.

Capital gains taxation is also proposed to be hugely simplified:

– Short-term gains on certain financial assets shall henceforth attract a tax rate of 20%.

– Short-term gains on all other financial assets and all non-financial assets shall continue to attract the applicable tax rate.

– Long-term gains on all financial and non-financial assets will attract a tax rate of 12.5%.

Our government will implement the following three schemes for employment-linked incentives as part of the Prime Minister package scheme:

1. First-timers: This scheme will provide one month’s wage to all persons newly entering the workforce in all formal sectors.

2. Job creation in manufacturing: This scheme will incentivize additional employment in the manufacturing sector linked to the employment of first-time employees. An incentive will be provided at a specified scale directly to both the employee and the employer with respect to the EPFO contribution in the first 4 years of employment. The scheme is expected to benefit 30 lakh youth entering employment and their employers. All additional employment within a salary of 1 lakh rupees per month will be counted. The government will reimburse employers up to 3,000 rupees per month for 2 years towards the EPFO contribution for each additional employee. The scheme is expected to incentivize additional employment of 50 lakh persons.

New airports, medical colleges, and sports infrastructure in Bihar will be constructed. An additional allocation to support capital investments will be provided.

Andhra Pradesh Reorganization Act: We will facilitate special financial support through multilateral development agencies. In the current financial year, 15,000 crore rupees will be arranged with additional amounts in future years.

Summary

FM Nirmala Sitharaman announces increased standard deduction, revised new tax regime rates, and employment-linked incentives in Budget 2024.

Highlights

– 📈 Standard deduction for salaried employees raised from ₹50,000 to ₹75,000.

– 💰 New tax regime revised: 0% up to ₹3 lakh, 5% from ₹3-7 lakh, and 30% above ₹15 lakh.

– 💵 Capital gains tax simplified: 20% for short-term gains on certain assets, 12.5% for long-term gains.

– 👩💼 Employment-linked incentives introduced for first-time job seekers and manufacturing sectors.

– 🔧 Employers can receive up to ₹3,000/month reimbursement for EPFO contributions for new hires.

– 🏗️ New infrastructure projects announced in Bihar, including airports and medical colleges.

– 💼 Special financial support of ₹15,000 crore for Andhra Pradesh’s reorganization act.

Key Insights

– 📊 Increasing the standard deduction will provide relief to salaried employees, enhancing disposable income and encouraging spending.

– 🏷️ The revised tax rates aim to make the new tax regime more attractive, potentially increasing compliance and revenue.

– 📉 Simplified capital gains taxation may stimulate investments in financial and non-financial assets, promoting economic growth.

– 👷♂️ Employment-linked schemes are designed to boost job creation, especially for first-time workers, fostering a robust labor market.

– 🤝 The reimbursement for EPFO contributions incentivizes employers to hire more, reducing unemployment and supporting economic recovery.

– 🏢 Investments in infrastructure in Bihar signal a commitment to regional development, which can enhance overall economic performance.

– 🌍 Special financial support for Andhra Pradesh indicates a proactive approach to address regional disparities and bolster state economies.