India plans to lower its budget deficit by 50 basis points and increase capital spending by 20% in 2024-25. Under the new direct tax regime, the government may raise the income tax rebate.
From January 31 to February 9, President Droupadi Murmu will begin the Lok Sabha-Rajya Sabha Budget Session. The interim budget may slash taxes to tackle inflation and growing prices.
The centre wants to reduce its budget deficit by 50 basis points from 5.9% of GDP in 2024-25. Up to 20% higher capital spending is projected. Economic spending exceeds revenue, generating a budget deficit.
The Interim Budget 2024 may not increase the new direct tax regime’s income tax rebate, according to media reports. Salary earners eagerly await the Finance Minister’s income tax announcements, especially rebate changes.
The story claims an authority denied income tax rebate hikes. The source said, “There is no such proposal,” throwing doubt on tax benefit hikes.
In Union Budget 2023, the new income tax rebate was raised from Rs 5 lakh to Rs 7 lakh. The baseline exemption level increased from Rs 2.5 lakh to Rs 3 lakh, and family pension deductions increased to Rs 15,000.
Indian Railways’ budget was expected to reach record levels in 2024-25, indicating a huge transportation system overhaul. To facilitate this transformation, the government will build modern, faster, and safer trains.
Railway investment is likely to climb 25%, exceeding the fiscal year 2023-24 budget, according to media estimates. The 2024-25 budget could be Rs 3 lakh crore.
A capex increase is suggested by the railway ministry to fund long-term infrastructure projects like freight corridors, faster trains, and fleet modernization with new trains, wagons, and locomotives.
Rating firm ICRA expects the 2019 Union Budget to target 5.3% of GDP budget deficit. The target would be halfway to the government’s 4.5% GDP budget deficit goal for 2025-26.
The government may exempt individuals from TCS on overseas credit and debit card spending up to Rs 7 lakh per financial year, sources say. Changes to the Income Tax Act would be in the 2024 Finance Bill. The exception may aid overseas traders up to a point.
Conclusion
President Droupadi Murmu will propose India’s interim budget from January 31 to February 9. In 2024-25, the budget proposes to lower the deficit by 50 basis points and increase capital spending by 20%. Income tax refunds under the new direct tax regime are unlikely to rise in the interim budget. Union Budget 2023 enhanced the new income tax rebate from Rs 5 lakh to Rs 7 lakh and provided a Rs 15,000 family pension deduction. Indian Railways’ budgeted allocation may hit record levels in 2024-25 with 25% greater capital spending. The government may exempt overseas credit and debit card spending from source-tax.
