Finance Minister Nirmala Sitharaman will present the Union Budget 2024-25 in the Lok Sabha on Tuesday, July 23. This is her seventh consecutive budget, making her the second Finance Minister to achieve this feat after C D Deshmukh. This will be the first budget of the Modi 3.0 government and is expected to take initiatives for various sectors of the economy in line with the vision of a developing India 2047 while maintaining fiscal prudence.
Finance Minister Nirmala Sitharaman will begin her budget speech at 11 am.
Budget expectations on income tax
There are expectations that Sitaraman may announce changes on the income tax front, including raising the limit of exemptions and standard deductions.
- Single hybrid tax regime: The government may move towards a ‘single hybrid tax regime’ as new taxpayers are already in the new tax regime. The new regime is expected to increase the exemption slabs from the current ₹3 lakh to at least ₹4 lakh.
- Incentives for old regime taxpayers: Established taxpayers with incomes above ₹15 lakh still prefer the old regime. The government is expected to incentivise them to move to the new regime, possibly introducing a new slab with a tax rate of 25% for income between ₹15 lakh and ₹18 lakh.
- Standard deduction: The finance minister is also expected to increase the standard deduction for salaried taxpayers to ₹1 lakh.
Real estate sector
The real estate sector has a lot of expectations from this budget, ranging from tax relief to affordable housing initiatives and land-related announcements.
- Industry status: The sector has been lobbying for ‘industry’ status to attract investments and streamline regulation.
- Interest deduction on housing loans: Raising the limit of interest deduction on housing loans under Section 24B from ₹2 lakh to ₹5 lakh is a key demand.
- Holding period for capital gains: The government is expected to reduce the holding period for capital gains on real estate from the current 24 months to 12 months and reduce the rate of long-term capital gains tax to 20%.
- Affordable housing norms: The sector has been pushing for increasing the cost, size and income norms for affordable housing to make it more inclusive.
Budget expectations from industries including MSMEs
The government has focused on adopting clean technologies and supporting the growth of industries, especially startups and MSMEs.
- Infrastructure and production cost: The industry expects the government to improve infrastructure for MSMEs and reduce production costs. Upgrading power infrastructure in industrial areas and further simplifying labour laws are essential steps.
- Compliance and clearances: Streamlining pollution control clearances and reducing compliance costs are also key expectations.
Economic Survey 2023-24
Finance Minister Nirmala Sitharaman on Monday presented the Economic Survey 2023-24, setting the stage for the Union Budget 2024-25. It has projected India’s economic growth rate for the current fiscal year 2024-25 at 6.5%-7%, while inflation is estimated at 4.5%. The survey takes a positive view on the country’s growth prospects, with a focus on job creation and skill development.
“The Economic Survey highlights the existing strengths of our economy and showcases the outcomes of various reforms brought in by our government. It also identifies areas for further growth and progress, as we move towards building a developed India,” said Prime Minister Narendra Modi.
