Union Budget 2024-2025: Energy, Infrastructure, and Taxation Highlights

What’s in today’s article?

• Why in News?
• Key highlights of Economic Survey 2023-24

Why in News?

Minister of Finance and Corporate Affairs Smt Nirmala Sitharaman presented the Union Budget 2024-25 in Parliament.

Key highlights of Union Budget 2024-2025 – Part II

• Priority 6: Energy Security
• In line with the announcement in the interim budget, PM Surya Ghar Muft Bijli Yojana has been launched to install rooftop solar plants to enable 1 crore households obtain free electricity up to 300 units every month. 
• The scheme has generated remarkable response with more than 1.28 crore registrations and 14 lakh applications.

• Priority 7: Infrastructure
  • The Government has made significant investment over the years in building and improving infrastructure has had a strong multiplier effect on the economy. 
  • ₹11,11,111 crore for capital expenditure has been allocated this year, which is 3.4 per cent of our GDP.
  • Priority 8: Innovation, Research & Development
  • The govt will operationalize the Anusandhan National Research Fund for basic research and prototype development.
  • It will also set up a mechanism for spurring private sector-driven research and innovation at commercial scale with a financing pool of ₹1 lakh crore in line with the announcement in the interim budget.

• Space Economy
  • For emphasis on expanding the space economy by 5 times in the next 10 years, a venture capital fund of ₹1,000 crore will be set up.
• Priority 9: Next Generation Reforms

Other highlights of the budget

• Labour related reforms
  • A comprehensive integration of e-shram portal with other portals will facilitate such one-stop solution. 
    • It will include mechanism to connect job seekers with potential employers and skill providers.
• Shram Suvidha and Samadhan portals will be revamped to enhance ease of compliance for industry and trade.
• Government will develop a taxonomy for climate finance for enhancing the availability of capital for climate adaptation and mitigation.
• Foreign Direct Investment and Overseas Investment
• The rules and regulations for Foreign Direct Investment and Overseas Investments will be simplified to:
  • facilitate foreign direct investments, 
  • nudge prioritization, and 
  • promote opportunities for using Indian Rupee as a currency for overseas investments.
• NPS Vatsalya
  • NPS-Vatsalya, a plan for contribution by parents and guardians for minors will be started. 
  • On attaining the age of majority, the plan can be converted seamlessly into a normal NPS account.
• New Pension Scheme (NPS)
  • The Committee to review the NPS has made considerable progress in its work and a solution will be evolved which addresses the relevant issues while maintaining fiscal prudence to protect the common citizens.
• Budget Estimates 2024-25
  • For the year 2024-25, the total receipts other than borrowings and the total expenditure are estimated at ₹32.07 lakh crore and ₹48.21 lakh crore respectively. 
  • The net tax receipts are estimated at ₹25.83 lakh crore and the fiscal deficit is estimated at 4.9 per cent of GDP.
  • The gross and net market borrowings through dated securities during 2024-25 are estimated at ₹14.01 lakh crore and ₹11.63 lakh crore respectively.
  • The government will aim to reach a deficit below 4.5 per cent next year.
• Angel Tax abolished
  • Budget has given boost to entrepreneurial spirit and start-up ecosystem by abolishing angel tax for all classes of investors.
• Capital Gain Tax
  • On Capital gains, short term gains shall henceforth attract a rate of 20 per cent on certain financial assets. 
  • Long term gains on all financial and non-financial assets to attract 12.5 per cent rate. 
    • Listed financial assets held for more than a year and unlisted assets (financial and non-financial) held for more than two years to be classified as long-term assets.
  • Limit of exemption of capital gains has been increased to ₹1.25 Lakh per year to benefit lower and middle-income classes.
• Vivad se Vishwas Scheme 2024
  • For dispute resolution and dispose-off backlogs, Union Finance Minister proposed Vivad se Vishwas Scheme, 2024 for resolsution of certain income tax disputes pending in appeal. 
  • The monetary limits for filing appeals related to direct taxes, excise and service tax in High Courts, Supreme Courts and tribunals has been increased to ₹ 60 Lakh, ₹ 2 Crore and ₹ 5 Crore, respectively. 

Q.1. What is Angel Tax?

Angel Tax is a levy on the capital raised by unlisted companies through the sale of shares to investors at a price exceeding their fair market value. Introduced in 2012 in India, it aims to curb money laundering but has raised concerns among startups as it affects their ability to secure funding.

Q.2. What is Capital Gain Tax?

Capital Gain Tax is a tax levied on the profit realized from the sale of a capital asset, such as stocks, real estate, or bonds. It is categorized into short-term and long-term gains, depending on the holding period, with varying tax rates applied to encourage long-term investments and revenue collection.

Source: SUMMARY OF THE UNION BUDGET 2024-2025