In a strategic move preceding the imminent Lok Sabha Elections, Finance Minister Nirmala Sitharaman unveiled the interim Union Budget 2024 in the Lok Sabha today. A noteworthy feature of this budget is its continuity in tax slabs for both the old and new regimes, with the comprehensive budget anticipated in July post the formation of the new government.
In the Budget session, the outgoing government presents an interim budget ahead of the Lok Sabha elections.
The Modi Government's 2023 Budget introduced pivotal regulations for income tax, making the new regime the default option. However, citizens retain the flexibility to opt for the benefits of the old tax regime.
Key Highlights:
- Strategic Fiscal Approach: Sitharaman's speech underscored the government's commitment to maintaining fiscal prudence, stimulating infrastructure growth, and prioritizing key economic segments, including the impoverished, women, youth, and farmers.
- Targeted Sectoral Support: George Alexander Muthoot, MD of Muthoot Finance, praised the budget's focus on supporting MSMEs, women entrepreneurs, and the agricultural sector, aligning with the company's goals of providing credit support to these segments.
- Cryptocurrency Outlook: Rajagopal Menon, VP of WazirX, expressed optimism about integrating provisions for long-term financing of domestic crypto projects, emphasizing their potential in achieving the government's vision for a developed India.
- Financial Sector Stability: Kotak Mahindra Bank's President, Manish Kothari, described the budget as "directionally positive," emphasizing fiscal rectitude, continued infrastructure spending, and targeted schemes for vulnerable sections.
- Tax Benefits Extension: The budget proposes an extension of certain tax benefits for startups, investments made by sovereign wealth or pension funds, and tax exemptions for specific income of IFSC units until March 31, 2025.
- Steady Indirect Tax Landscape: Harsh Shah, Partner at Economic Laws Practice, noted the continuity in indirect tax rates, including import duties, with recent changes introduced under Customs law.
- Mixed Reactions on Personal Taxation: While some, like Ashish Aggarwal of Acube Ventures, understood the Finance Minister's decision to maintain existing tax rates from a prudence perspective, others expressed disappointment, citing challenges faced by the middle class in the current economic climate.
- Capital Expenditure Surge: Finance Minister Sitharaman announced a substantial hike in capital expenditure to over ₹11 trillion, reinforcing the government's commitment to bolstering economic growth.
- Middle-Class Housing Scheme: To address housing challenges, the government plans to launch a housing scheme for the middle class, promoting affordable homeownership.
"In summary, the Interim Budget 2024-25 signifies the government's unwavering commitment to inclusive growth, economic stability, global strategic positioning, sectoral advancements, environmental sustainability, and progressive tax reforms, aligning with a visionary roadmap for India's development by 2047."