Budget 2024: Key income tax changes, business incentives to watch for economic growth

Finance Minister Nirmala Sitharaman will unveil the Union Budget for the financial year 2024-25 on Tuesday at 11 a.m. This critical document will outline the government’s revenue and expenditure plans, influencing economic growth and stability across the nation. Understanding the budget’s implications for individuals and businesses alike is essential for informed financial decision-making.

Income tax announcements

Income tax proposals are among the most anticipated aspects of any budget. Previous budgets have seen changes designed to alleviate the tax burden on the middle class and increase disposable income.

Tax slabs adjustment: Currently, the basic exemption limit is set at ₹3 lakh. Adjustments to tax rates for various slabs in previous budgets have aimed to reduce the overall tax burden for many individuals.

Standard deduction increase: There is speculation that the government may raise the standard deduction to ₹1 lakh from the current ₹50,000, simplifying tax calculations and increasing disposable income for salaried employees.

Business and industry

Provisions supporting businesses, particularly small and medium enterprises (SMEs), are expected to feature prominently.

Corporate tax: As a significant revenue source for the central government, any changes in corporate tax will impact businesses. Additionally, incentives for startups and SMEs are anticipated.

Manufacturing boost: The production-linked incentive (PLI) scheme, which has been expanded to more sectors in recent years, is expected to see further extensions to promote domestic manufacturing and reduce import dependence.

Ease of doing business: Simplified regulations and digitization of processes aimed at facilitating business operations in India are expected, along with significant infrastructure announcements to improve the business environment.

Social welfare and infrastructure

The budget is expected to prioritize social welfare schemes and infrastructure development.

Healthcare and education: Allocations for healthcare and education sectors are likely, with potential investments in medical colleges and digital initiatives to improve education quality.

Infrastructure development: Significant investments in infrastructure, including roads, railways, and urban development, are expected to create jobs and drive economic growth. Focus on renewable energy and green projects will contribute to sustainable development.

Social security: Enhanced provisions for social security, including pensions and insurance for the underprivileged, are expected to provide a safety net for vulnerable populations.

Agriculture and rural development

Agriculture will remain a priority with measures aimed at improving farmers’ income and livelihoods.

Direct Benefit Transfers (DBT): Increased allocations for DBT schemes will ensure subsidies and benefits reach farmers directly, reducing leakages and improving efficiency.

Rural infrastructure: Investments in rural infrastructure, such as roads, irrigation, and storage facilities, will aim to boost agricultural productivity and connectivity.

Agri-tech initiatives: Support for agri-tech startups and modern farming techniques will help farmers increase their yields and income.