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Thursday, 01 Feb 2024

What the budget has for investors

Hello and welcome to our 2024-2025 Budget summary for investors. This newsletter presents a broad outlook about the interim budget and how it could affect investors.

Focus on Inclusive Development:

- The budget emphasizes people-centric inclusive development, with a comprehensive approach to infrastructure development, including physical, digital, and social infrastructure.

- The Digital Public Infrastructure (DPI) has been promoted to facilitate formalization and financial inclusion.

- The tax base has been widened and deepened through the implementation of GST, strengthening the financial sector and bringing savings, credit, and investment back on track.

Growth and Economic Outlook:

- India's Dollar GDP growth is projected to be on an upward trajectory, outpacing the world's Dollar GDP growth.

- The budget aims to make all parts of the country active participants in economic growth, fostering a prosperous Bharat in harmony with nature, modern infrastructure, and opportunities for all.

Direct Taxation Changes:

The tax liability threshold has been raised to ₹ 7 lakh under the new tax regime, potentially reducing the tax burden and increasing your take-home salary.

Improved Taxpayer Services:

The Government's efforts to streamline tax processes and resolve long-standing disputes should lead to a more efficient tax environment, allowing for better financial planning.

Robust Financial Sector Growth:

Strengthening of the financial sector is expected to make savings and investment options more efficient, offering you a diversified investment landscape.

Infrastructure Development:

- The budget focuses on infrastructure development in various sectors, including housing, tourism, agriculture, and food processing.

- Increased allocation for the Pradhan Mantri Awas Yojana (PMAY) aims to achieve the target of 3 crore houses, with an additional 2 crore targeted for the next 5 years.

- Long-term interest-free loans will be provided to states to encourage infrastructure development, including port connectivity, tourism, and amenities in islands like Lakshadweep.

Agriculture and Food Processing:

- The government aims to promote private and public investment in post-harvest activities to enhance the agriculture and food processing sectors.

- The application of Nano-DAP will be expanded in all agro-climatic zones to boost agricultural productivity.

- A comprehensive program for dairy development will be formulated to support the growth of the dairy sector.

Promotion of Foreign Investment and Urban Transformation:

- The budget focuses on promoting foreign investment through bilateral investment treaties.

- The expansion of new airports under the UDAN scheme and the promotion of urban transformation through Metro rail and NaMo Bharat are key initiatives to enhance infrastructure and connectivity.

Expenditure Policy and Financial Management:

- The government continues to leverage technology for public financial management, ensuring transparency and efficiency.

- The e-Bill Processing system enables online submission and real-time tracking of claims by suppliers and contractors.

- The PM GatiShakti National Master Plan for Multi-modal Connectivity aims to optimize costs and enhance infrastructure connectivity through integrated planning and coordinated implementation.

Remember, investing requires careful analysis and consideration of various factors. It is always advisable to consult with a financial advisor or conduct thorough research before making any investment decisions.

Tax Updates for Individual Tax Payers

For individuals other than those falling under specific categories:

- Total income up to Rs. 2,50,000: Nil tax

- Total income between Rs. 2,50,000 and Rs. 5,00,000: 5% of the amount exceeding Rs. 2,50,000

- Total income between Rs. 5,00,000 and Rs. 10,00,000: Rs. 12,500 plus 20% of the amount exceeding Rs. 5,00,000

- Total income exceeding Rs. 10,00,000: Rs. 1,12,500 plus 30% of the amount exceeding Rs. 10,00,000

For individuals aged 60 years or more but less than 80 years:

- Total income up to Rs. 3,00,000: Nil tax

- Total income between Rs. 3,00,000 and Rs. 5,00,000: 5% of the amount exceeding Rs. 3,00,000

- Total income exceeding Rs. 5,00,000: Rs. 10,000 plus 20% of the amount exceeding Rs. 5,00,000

For individuals aged 80 years or more:

- Total income up to Rs. 5,00,000: Nil tax

- Total income between Rs. 5,00,000 and Rs. 10,00,000: 20% of the amount exceeding Rs. 5,00,000

- Total income exceeding Rs. 10,00,000: Rs. 1,00,000 plus 30% of the amount exceeding Rs. 10,00,000

Surcharge on Income Tax:

- Surcharge is applicable on the income tax amount calculated as per the above rates.

- The surcharge rates vary based on the individual's residency status and income level.

- The surcharge ranges from 10% to 37% for non-residents and individuals with different income brackets.

Other Important Updates:

- e-Verification scheme: The authorities have introduced an e-Verification scheme to collect accurate income information and reduce tax evasion. This scheme aims to ensure comprehensive determination of income.

- PAN as Business Identification Number (BIN): PAN is now being leveraged as the BIN for registration purposes in various government departments and services. This integration aims to streamline processes and enhance efficiency.

- Integration of PAN with Aadhaar: PAN and Aadhaar integration has been carried out to facilitate de-duplication and ensure accurate identification. As of December 31, 2023, a total of 58.76 crore PANs are linked with Aadhaar.

- Integrated e-Filing and Centralised Processing Center 2.0 (CPC 2.0) project: The CPC 2.0 project aims to provide a better e-filing experience, ease of compliance, and faster processing of Income Tax Returns (ITRs). As of December 31, 2023, 8.18 crore ITRs have been filed for AY 2023-24, marking a 9% increase compared to the previous year.

- Tax Information Network 2.0: The introduction of TIN 2.0 has enabled real-time credit of taxes and faster refunds to taxpayers' bank accounts. Till November 27, 2023, 6 crore challans involving an amount of Rs. 12.54 lakh crores have been processed.

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