Union Budget 2024: Tax relief for middle class; focus on jobs through skilling, incentivising employers

No special status but Bihar, Andhra Pradesh get special aids.

New Delhi: Finance Minister Nirmala Sitharaman on Tuesday presented the Union Budget 2024-25 that seeks to provide relief for the middle class by reducing tax burden in selected categories and boosting employment through skilling, incentivising employers, especially MSMEs and enhancing allocation for housing, agriculture and rural roads.

The tax slabs under the new regime will be rejigged. The income between Rs 3 lakh to 7 lakh will be taxed at 5 per cent; Rs 7 lakh to 10 lakh at 10 per cent; Rs 10 lakh to 12 lakh at 15 per cent; Rs 12 lakh to 15 lakh at 20 per cent and above Rs 15 lakh at 30 per cent. The basic exemption limit remains unchanged at Rs 3 lakh. No change is announced for the old tax regime.

Follow live updates on Union Budget 2024 here

Standard deduction to salaried individuals and pensioners is proposed to be increased from Rs 50,000 to Rs 75,000 under the new tax regime. Deduction from family pension of Rs 15,000 is proposed to be increased to Rs 25,000 under the new tax regime.

“As a result of these changes, a salaried employee in the new tax regime stands to save up to Rs 17,500/- in income tax,” Sitharaman announced in the Budget.

Due to the changes in the tax rates, revenue of about Rs 37,000 crore – Rs 29,000 crore in direct taxes and Rs 8,000 crore in indirect taxes – will be forgone, while revenue of about Rs 30,000 crore will be additionally mobilised. Thus, the total revenue forgone is pegged at Rs 7,000 crore annually, the Finance Minister said.

Check reactions to Union Budget 2024 here

NPS contribution limit for employers in private sector has been raised to 14 per cent of employee’s basic salary from the earlier limit of 10 per cent. For the government employees, this limit was already at 14 per cent.

Sitharaman also announced a PM package of five schemes aimed at facilitating employment and skilling, with an allocation of Rs 2 lakh crore.

“In this Budget, we particularly focus on employment, skilling, MSMEs, and the middle class. I am happy to announce the Prime Minister’s package of five schemes and initiatives to facilitate employment, skilling and other opportunities for 4.1 crore youth over a 5-year period with a central outlay of Rs 2 lakh crore,” Sitharaman said.

A new scheme will be introduced under which the government will reimburse Rs 3,000 per month to employers for two years towards EPFO contributions for each additional employee. The scheme targets to incentivise additional employment of 50 lakh. Under an employment-linked skilling scheme, the government will provide one month’s salary, up to Rs 15,000, to first-time employees. The incentive will be provided based on EPFO enrolment.

One crore youth will receive internship opportunities in the top 500 companies, with an allowance of Rs 5,000 per month and Rs 6,000 as one-time assistance.

“This significant investment in skill development programmes and the incentivisation of industries to adopt comprehensive apprenticeships lays a solid foundation for a future-ready workforce,” said Ramesh Alluri Reddy, CEO at TeamLease Degree Apprenticeship.

“By focusing on employment and skilling, the government is not only addressing the immediate need for employment but also building a sustainable pipeline of skilled professionals for the future,” Reddy added.

While there was no mention of any special category status, Bihar and Andhra Pradesh got special financial aids for development of roads and other infrastructure.

The Finance Minister announced development of industrial node at Gaya on Kolkata-Amritsar Industrial Corridor. Rs 26,000 crore financial support will be provided for development of several road projects in Bihar, including Patna-Purnia and Buxar-Bhagalpur expressways.

Andhra Pradesh will get Rs 15,000 crore financial assistance for development of Amaravati.

“Our government is fully committed to financing and early completion of the Polavaram Irrigation Project, which is the lifeline for Andhra Pradesh and its farmers. This will facilitate our country’s food security as well,” Sitharaman said.

Union Budget 2024 LIVE | Making a record for any Finance Minister, Nirmala Sitharaman presented her 7th consecutive Union Budget on July 23, 2024 under the Modi 3.0 government. This Budget brought tax relief for the middle class, while focusing on jobs through skilling, incentivising employers. Track the latest coverage, live news, in-depth opinions, and analysis only on Deccan Herald. Also follow us on WhatsApp, LinkedIn, X, Facebook, YouTube, and Instagram.