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Highlights of Interim Budget, 2024

Proposals, Focus Areas and Strategy

Aakanksha Singhal
Aakanksha Singhal

Published on: Feb 1, 2024

Akshit Rai
Akshit Rai

Updated on: Feb 1, 2024

(29 Ratings)
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In the realm of financial governance, the interim budget serves as a pivotal juncture, providing insights into the government’s economic strategies and priorities during the interim period. As a snapshot of fiscal policies, this budget offers a glimpse into the trajectory that the nation will follow until a full-fledged budget is presented. On 1st February, 2024, the Hon’ble Finance Minister Ms. Nirmala Sitharaman, presented the Union Interim Budget, 2024 in the Parliament.

In this article, we delve into the key takeaways from the interim budget, exploring the economic landscape, proposed policy directions and anticipated impact on the direct and indirect taxes.

Focus Areas

  1. Garib Kalyan, Desh ka Kalyan : Credit assistance to 78 lakh street vendors under PM-SVANidhi and moving 25 crore people out of Multidimensional poverty
  2. Empowering the Youth : Fostering entrepreneurial aspirations of Youth-43 crore loans sanctioned under PM Mudra Yojana
  3. Welfare of Farmers-Annadata : Direct financial assistance to 11.8 crore farmers under PM-KISAN, Crop Insurance to 4 crore farmers under PM Fasal Bima Yojana and Integration 1,361 mandis under eNAM, supporting trading volume of ₹ 3 lakh crore
  4. Nari Shakti : 30 crore Mudra Yojana loans disbursed to women entrepreneurs, 1 crore women assisted by 83 lakh SHGs and rise in female labour force participation rate

Allocation for Specific Ministries

  1. Ministry of Defence : ₹ 6.2 Lakh Crore
  2. Ministry of Road Transport and Highways : ₹ 2.78 Lakh Crore
  3. Ministry of Railways : ₹ 2.55 Lakh Crore
  4. Ministry of Consumer Affair, Food & Public Distribution : ₹ 2.13 Lakh Crore
  5. Ministry of Home Affair : ₹ 2.03 Lakh Crore
  6. Ministry of Rural Development : ₹ 1.77 Lakh Crore
  7. Ministry of Chemicals and Fertilizer : ₹ 1.68 Lakh Crore
  8. Ministry of Communications : ₹ 1.37 Lakh Crore
  9. Ministry of Agriculture and Farmer’s Welfare : ₹ 1.27 Lakh Crore

Strategy

  1. Sustainable Development : Commitment to meet Net Zero by 2070, Rooftop Solarization, etc.
  2. Infrastructure and Investment: Implementation of 3 major railway corridor programmes, expansion of existing airports and development of new airports
  3. Inclusive Development : Health, Housing, Tourism
  4. Agriculture and Food Processing : Private and Public Investment in Post Harvest Activities. Dairy Development, etc.

Impact on Taxes

Direct Taxes Indirect Taxes
Certain tax benefits to Start-ups and investments made by sovereign wealth funds/pension funds, tax exemption of some IFSC units earlier expiring on 31.03.2024 extended up to 31.03.2025 Proposed amendments for manner of distribution of credit by Input Service Distributor u/s 20 of CGST Act, 2017
Withdrawal of outstanding direct tax demand:
  1. Up to ₹25,000 pertaining up to FY10
  2. Up to ₹10,000 for FY11-FY15
Which is Expected to benefit approximately 1 crore taxpayers
Insertion of new Penalty clause section 122A under CGST Act, 2017, for failure to register certain machines used in manufacture of goods as per special procedure
Retention of same tax rates:
  1. For direct and indirect taxes, including import duties
  2. For Corporate Taxes- 22% for existing domestic companies, 15% for certain new manufacturing companies
  3. No tax liability for taxpayers with income up to ₹7 lakh under the new tax regime
Reduction of rate of Tax collected at Source (TCS) from 20% to 5%, by authorized dealers making remittances under LRS or seller of overseas tour program package*
*20% TCS shall be collected if aggregate of amounts in a FY exceeds Rs. 7 lakhs

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