Union Budget 2024: Key Highlights

Introduction

Finance Minister Nirmala Sitharaman presented the Union Budget 2024 in Parliament, focusing on strengthened support for the poor, women, youth, and farmers. The budget outlines higher public spending, employment-generation measures, and meaningful tax relief for the middle class. Significant tax-related announcements were made, including an increase in Securities Transaction Tax (STT) on the F&O segment and a rationalisation of short-term and long-term capital gains taxes. The government also revised personal income tax slabs under the New Tax Regime and enhanced the Standard Deduction, offering additional relief to taxpayers.

Standard Deduction Under the New Tax Regime

Finance Minister Nirmala Sitharaman announced two major changes to personal income tax under the New Tax Regime:

The standard deduction for salaried individuals will increase from ₹50,000 to ₹75,000.
For family pensioners, the standard deduction will rise from ₹15,000 to ₹25,000.

Revised Tax Slabs for FY 2024–25 (New Tax Regime)

The tax slabs under the New Tax Regime have been updated as follows:

Income Range	Tax Rate
Up to ₹3 lakh	Nil
₹3 lakh – ₹7 lakh	5%
₹7 lakh – ₹10 lakh	10%
₹10 lakh – ₹12 lakh	15%
₹12 lakh – ₹15 lakh	20%
Above ₹15 lakh	30%

Increase in Employer’s Contribution to NPS

Under Section 80CCD, the limit on an employer’s contribution to NPS for private-sector employees has been increased from 10% to 14% of salary under the New Tax Regime.

Changes in Capital Gains Taxation

The Budget introduced major reforms to simplify and rationalise capital gains taxation:

1. Simplified Holding Periods

There will now be just two holding periods:

12 months for all listed securities
24 months for all other assets

2. Long-Term Capital Gains (LTCG)

LTCG tax rate increased from 10% to 12.5%
Holding period for listed financial assets remains at more than one year
Asset classification:
- Listed financial assets held > 1 year → Long-term
- Unlisted/non-financial assets held > 2 years → Long-term
Exemption limit increased from ₹1 lakh to ₹1.25 lakh per year
Indexation benefit removed for property, gold, and other unlisted assets

3. Short-Term Capital Gains (STCG)

STCG tax under Section 111A on equity and equity mutual funds (STT-paid) increased from 15% to 20%
Other STCG will continue to be taxed at applicable slab rates
Unlisted bonds, debentures, debt funds, and MLDs will now be taxed at applicable rates, regardless of holding period

Revision of Securities Transaction Tax (STT)

STT on sale of options: 0.0625% → 0.1%
STT on sale of futures: 0.01% → 0.02%

Corporate Tax for Foreign Companies

Corporate tax for foreign companies has been reduced from 40% to 35%.

Abolition of Angel Tax

The government has proposed removing Section 56(2)(viib), effectively abolishing angel tax on share issuances above fair market value.

Increase in Remuneration Limit for Working Partners

The deductible limit for remuneration paid to working partners of a firm has been increased.

Tax on Share Buybacks

From FY 2025 onwards, shareholders will be required to pay tax on income received from share buybacks, replacing the earlier system where companies bore the tax.

Amendment to Section 28

Income from letting out a residential house (or part of it) will be taxable under “Income from House Property,” not “Profits and Gains of Business or Profession.”

Rationalisation of TDS Rates

Revised TDS rates will take effect from October 1, 2024 or April 1, 2025, depending on the section.

Section	Current TDS	Proposed TDS	Effective From
194H – Commission/Brokerage	5%	2%	1 Oct 2024
194-IB – Rent by Individuals/HUF	5%	2%	1 Oct 2024
194M – Payments by Individuals/HUF	5%	2%	1 Oct 2024
194-O – E-commerce Payments	1%	0.1%	1 Oct 2024
194F – Repurchase of MF/UTI Units	Omitted	—	1 Oct 2024

New TDS Section 194T

A new section mandates TDS at 10% on payments by firms/LLPs to partners—such as salary, interest, remuneration, bonus, or commission—if payments exceed ₹20,000.

TCS on Luxury Goods

A 1% TCS will apply to notified luxury goods valued above ₹10 lakh.

TDS on Floating Rate Savings (Taxable) Bonds 2020

TDS will be applicable on interest exceeding ₹10,000 on FRSB 2020 or any other notified government securities.

Other Direct Tax Updates

Comprehensive Review of Income Tax Act, 1961:
The Union Budget 2024 announces a complete review of the Income Tax Act, 1961, aimed at easing the compliance burden on the middle class. Major revisions have been proposed under the New Tax Regime, including updated tax slabs.

Reintroduction of Vivaad se Vishwas Scheme:
The government plans to revive the Vivaad se Vishwas Scheme to resolve direct tax disputes swiftly and cost-effectively, helping reduce prolonged litigation.

Reopening of Income Tax Returns:
As per the new rules, income tax returns can be reopened only if the unreported income is ₹50 lakh or more. Such cases can be reassessed for up to three years, extendable to a maximum of five years from the end of the assessment year. For search-related cases, the reopening window has been reduced from ten years to six years.

Income Tax Appeals:
To ease the burden on the judiciary and clear pending cases, the monetary limits for filing appeals have been increased to:

₹60 lakh for tax tribunals
₹1 crore for High Courts
₹2 crore for the Supreme Court

Budget 2024: Indirect Tax Proposals

Budget 2024 brings a series of important changes to indirect taxes aimed at simplifying compliance, strengthening domestic industries, and promoting green energy. Key proposals include:

Custom Duty Changes

Budget 2024 introduces several significant revisions to customs duties aimed at reducing costs, boosting domestic manufacturing, and supporting critical sectors.

Key Announcements:

Medicines: Customs duty is completely removed on three additional cancer-related medicines to ease treatment costs for patients.
Mobile Phones & Accessories: Basic customs duty on mobile phones, PCBAs, and chargers is reduced to 15% to support the electronics manufacturing ecosystem.
Critical Minerals: Twenty-five critical minerals are fully exempted from customs duty, while the basic duty on two additional minerals is reduced to strengthen India’s mineral security.
Solar Manufacturing: More capital goods used in producing solar cells and panels are added to the exempted list, encouraging domestic solar manufacturing.
Manufacturing Inputs: Duty is removed on oxygen-free copper used for resistor manufacturing, and specific connector components are now duty-exempt.

Summary of Customs Duty Revisions

Particulars	From	To
Mobile phones, mobile PCBAs, chargers	20%	15%
Gold & silver	15%	6%
Platinum	15.4%	6.4%
Broodstock, polychaete worms, shrimp & fish feed	10%, 30%, 15%	5%
Alkali/alkaline earth metals, 25 rare earth minerals (e.g., lithium)	5%	Exempt
Capital goods for solar panel manufacturing	7.5%	Exempt
Cancer drugs (Trastuzumab Deruxtecan, Osimertinib, Durvalumab)	10%	Exempt
Ferro nickel & blister copper	2.5%	Nil
Ammonium nitrate	7.5%	10%
PVC flex banners	10%	25%
PCBAs for specific telecom equipment	10%	15%

Changes in GST Law Announced in Union Budget 2024

The Union Budget 2024 introduces several important amendments to the GST framework aimed at simplifying compliance, improving trade facilitation, and addressing long-standing industry concerns. These reforms, aligned with GST Council recommendations and implemented in coordination with States, focus on clarifying rules, easing procedures, and strengthening the overall GST system.

Key GST Amendments

Extra Neutral Alcohol (ENA): ENA is proposed to be kept outside the scope of Central GST.
Non-Levy and Short-Levy: Amendments made to regularise instances of non-levy and short-levy of Central Tax arising from prevalent industry practices.

Input Tax Credit (ITC) Reforms

Relaxation of time limits for availing ITC.
Transitional credit to be allowed for Input Service Distributors (ISDs).
Restrictions introduced on blocking ITC for tax paid under Section 74.

Compliance & Procedural Amendments

Demand Notices & Orders: A new section will prescribe a uniform time limit for issuing demand notices and corresponding orders.
Appeals: The maximum pre-deposit required for filing GST appeals will be reduced.
Interest/Penalty Waiver: Conditional waivers for specific tax periods will be allowed.
GST Appellate Tribunal: Government empowered to notify the Tribunal for anti-profiteering cases, with a sunset clause.
Insurance Sector: Certain insurance-related activities clarified as neither supply of goods nor services.
Reverse Charge Mechanism: Time of supply for services under reverse charge clarified.

Registration & Documentation

Conditions specified for revocation of cancelled GST registrations.
Time limit introduced for issuing invoices by recipients under reverse charge.
Monthly return filing made mandatory for TDS deductors.

Refunds & Representation

Refunds disallowed for zero-rated supply of goods that are subject to export duty.
Authorised representatives permitted to appear on behalf of summoned individuals.

Tribunal & Enforcement

Government empowered to notify matters to be heard exclusively by the Principal Bench of the GST Appellate Tribunal.
Penal provisions under Section 122(1B) restricted only to e-commerce operators responsible for deducting TCS.
Consequential amendments introduced following the insertion of new Section 74A in the CGST Act.

Budget 2024 Announcements for MSMEs

The Union Budget 2024 introduces several targeted initiatives to strengthen Micro, Small, and Medium Enterprises (MSMEs), with a strong emphasis on manufacturing and labour-intensive sectors. These measures focus on improving access to finance, easing compliance, and supporting technology-driven growth, helping MSMEs scale and compete globally.

Key Measures Announced

Higher Mudra Loan Limit:
The eligibility limit under the Mudra TARUN category has been doubled from ₹10 lakh to ₹20 lakh for borrowers who have successfully repaid previous loans.
Expansion of TReDS Platform:
To boost MSME cash flow, the turnover threshold for mandatory onboarding on the Trade Receivables Discounting System (TReDS) has been reduced from ₹500 crore to ₹250 crore. This change will bring 22 additional CPSEs and nearly 7,000 more companies onto the platform.
New Credit Guarantee Schemes:
Fresh credit guarantee schemes will be launched with a guarantee cover of up to ₹100 crore to support larger loan requirements for MSMEs.
SIDBI Outreach Enhancement:
SIDBI will open 24 new branches over the next three years to strengthen financial access for MSMEs across the country.
Support for Food Processing Infrastructure:
Funding will be provided to set up 50 multi-product food irradiation units and 100 food quality and safety testing laboratories.
E-Commerce Export Hubs:
Dedicated e-commerce export hubs will be created under a public-private partnership (PPP) model to help MSMEs and traditional artisans sell their products in global markets.

Budget 2024 Downloads

Finance Bill 2024: Click here to download.
Union Budget 2024 Speech: Click here to access the full text.

About the Author

Ravi

Ravi is an experienced legal writer who turns complex laws into clear, practical insights. He empowers entrepreneurs to understand their legal obligations, helping them build confident, compliant, and sustainable businesses.

January 8, 2026