India's finance minister Nirmala Sitharaman while presenting the fifth and last full-fledged budget of Modi 2.0, before the general election next year, stated that the Indian economy is on the right track and is headed for a bright future. In a big boost for taxpayers and economy, Sitharaman announced major changes in tax slabs under the new tax regime and big hike in allocation for railways and capital expenditure.
She announced change in income tax slabs and stated that income up to Rs 700,000 would be tax-free under new tax regime.“Currently, those with income up to Rs 500,000 do not pay any income tax in both old and new tax regimes. I propose to increase the rebate limit to Rs 700,000 in the new tax regime. Thus, persons in the new tax regime, with income up to Rs 700,000 will not have to pay any tax," said Sitharaman.
She proposed change in tax structure by reducing the number of slabs to five and increasing the tax exemption limit to Rs 300,000. In the new tax system, I suggest lowering the highest surcharge rate from 37% to 25%. The maximum tax rate would be reduced as a result to 39%, stated the FM.
Mobile phones, lab grown diamonds, TV, shrimp feed, machinery for lithium ion batteries and raw materials for EV industries become cheaper. On other hand, items such as silver, cigarettes, compound rubber, articles made from gold bars, imitation jewellery, imported bicycles, toys, luxury cars, EVs and kitchen electrical chimneys are costlier.
Railways got an outlay of £24 billion in FY 24. It’s the highest ever allocation for the national carrier and is nearly nine times over FY14 allocations. To increase development potential and job creation, attract private investment, and provide protection from global headwinds, the government is investing £100 billion in capital, a steep increase of 33% for the third year in a row. Budgetary allocation for defence increased from £525 billion to 594 billion. An allocation of £162 billion has been set aside for capital expenditures, which includes the procurement of new weapons, aircraft, battleships, and other military equipment.
The government intended to lay the groundwork for steering the Indian economy toward Amrit Kaal through the budget. The finance minister has outlined seven major goals that will support one another and serve as the government's "Saptarishi" as it moves through the Amrit Kaal. They include:
Inclusive development; Reaching the last mile; Infrastructure and investment; Unleashing the potential; Green growth; Youth power and Financial sector.