The Indian government has introduced a new income tax bill, promising a clear, direct, and fair tax system. The bill, unveiled by Finance Minister Nirmala Sitharaman, aims to reduce compliance burdens and make tax filing easier for citizens.
Key Highlights of the New Tax Regime
Revised Tax Slabs: The new tax regime features revised slabs, with no tax liability for incomes up to ₹12 lakh per annum.
Extended Tax Return Filing Deadline: The deadline for filing tax returns has been extended from two years to four years.
Increased Refund Limit: The income tax refund limit has been increased from ₹7 lakh to ₹12 lakh.
Rationalization of TDS/TCS: The government has rationalized TDS/TCS to reduce compliance burdens.
New Income Tax Slabs
- ₹0-4 lakh: Nil
- ₹4-8 lakh: 5%
- ₹8-12 lakh: 10%
- ₹12-16 lakh: 15%
- ₹16-20 lakh: 20%
- ₹20-24 lakh: 25%
- Above ₹24 lakh: 30%
These changes aim to provide relief to middle-class taxpayers and simplify the tax filing process. The government estimates that these changes will result in a revenue loss of approximately ₹1 lakh crore ¹.
Announcements for tourism sector
Several states that are home to popular tourist destinations would benefit from an infusion of Rs 20,000 crore to improve connectivity and create infrastructure in order to increase tourism-led employment.
States now have the responsibility of acquiring land for the construction of hotels and other necessary infrastructure. Additionally, there is a sustained effort to position India as a major global destination for spiritual tourism, particularly by portraying it as the birthplace of Lord Ram in the Ramayana and Buddha in the Buddhist circuit, which attracts tourists from Southeast Asia. The medical tourism industry, with an emphasis on Health in India, is also anticipated to receive remission of immigration fees.
Modified UDAN scheme to be launched to connect 120 new destinations
1.5 cr middle-class persons were able to experience faster travel thanks to UDAN regional connection projects. operationalized 619 routes and connected 88 ports and airports.
Building on this, 120 new destinations will be connected using a modified UDAN plan. 4 crore more passengers over the following ten years.
To assist smaller airports and helipads in the ambitious, hilly Northeast regional districts.
Bihar’s brownfield airports and greenfield airports: Patna Airport’s capacity expansion
Announces measures for gig workers
With an investment of Rs 500 crore, the government plans to establish a second center of excellence for education in addition to the three centers of excellence for AI that were announced in 2023.
Under the PM Jan Arogya Yojana, the government would assist gig workers in obtaining identity cards, registering on the e-shram site, and receiving health insurance. According to FM, this will probably help one crore gig workers.
Govt will set up Rs 25,000-crore Maritime Development Fund
FM declares that in order to encourage and foster competition, the government will establish a Maritime Development Fund worth Rs 25,000 crore. The remaining 49% will come from the public sector.
National mission on High Yielding Seeds to be launched
National mission on High Yielding Seeds to be launched, with focus on
a) Strengthening research ecosystem.
b) Targeted development and propagation of seeds with high yield, pest resistance & climate resilience
c) Commercial availability of 100+ seed varieties released since July 2024
Revamping existing PM-SVANidhi Loan Scheme
The PM-SVANidhi loan program, which was introduced in 2020 to assist street vendors affected by the COVID-19 pandemic in getting back on their feet, is being revamped, according to the Finance Minister. The program, which has already benefited 68 lakh merchants, will now offer improved bank loans, credit cards linked to UPI, and assistance with capacity building. Vendors are eligible for loans of Rs. 10,000, Rs. 20,000, and Rs. 50,000 under the current program.
New Scheme Will Be Launched For 5 lakh SC/ST Women Entrepreneur
A new program targeting five lakh women entrepreneurs from Scheduled Castes and Scheduled Tribes (SC/ST) would be introduced, according to the Finance Minister. Over the next five years, this will entail providing term loans up to Rs 2 crore.
FDI in insurance hiked to 100%: Paves the way for entry of foreign giants, inflows
Foreign direct investment (FDI) in the insurance industry has increased significantly, from 74% to 100%, according to Finance Minister Nirmala Sitharaman. It is anticipated that this action will draw major international insurance companies and boost capital inflows.
Finance Minister announces extension of Jal Jeevan Mission till 2028
The Jal Jeevan Mission (JJM) has been extended till 2028 by the Finance Minister. One of the largest initiatives of Modi 2.0 was the JJM, which was introduced in 2019.
More than 12 crore rural households now have access to tap water. The plan was initially in place until 2024.
The program’s daily goal is to supply each person with 55 liters of drinking water. The operations and upkeep of the infrastructure built during phase one will be the main emphasis of the JJM’s subsequent phase. Even though the JJM installed pipelines in numerous locations, residents still complain about not having access to drinking water.
Budget Boost For Bihar
Finance Minister Nirmala Sitharaman has so far made two specific announcements for the state of Bihar, which is expected to have assembly elections later this year.
One is the creation of a “Makhana Board” to assist farmers in cultivating the superfood makhana.
Sitharaman has also announced plans to build a new brownfield airport in the state and expand the Patna airport, which will strengthen the state’s infrastructure.
Budget boost to Sensex
Following the FM’s announcement of a number of initiatives to support education, MSMEs, agribusiness, urban infrastructure, power, shipbuilding, and other sectors, the Sensex rose 0.5%, or 380 points, to 77,884.
Govt to incentivise electricity distribution reforms
The government will incentivise electricity distribution reforms and augmentation of intra-state transmission capacity by states, FM Sitharaman said. “This will improve the financial health and capacity of electricity companies. Additional borrowing of 0.5 per cent of GSDP will be allowed to states contingent on these reforms,” she said..
National mission on High Yielding Seeds to be launched
National mission on High Yielding Seeds to be launched, with focus on
- Strengthening research ecosystem,
- Targeted development and propagation of seeds with high yield, pest resistance & climate resilience
- Commercial availability of 100+ seed varieties released since July 2024
Revamping existing PM-SVANidhi loan scheme
The PM-SVANidhi loan program, which was introduced in 2020 to assist street vendors affected by the COVID-19 pandemic in getting back on their feet, is being revamped, according to the Finance Minister. The program, which has already benefited 68 lakh merchants, will now offer improved bank loans, credit cards linked to UPI, and assistance with capacity building. Vendors are eligible for loans of Rs. 10,000, Rs. 20,000, and Rs. 50,000 under the current program.
10,000 medical undergraduate and postgraduate seats will be added over the next year
10,000 more undergraduate and graduate medical seats will be added over the course of the next year, according to a statement made on Saturday by union finance minister Nirmala Sitharaman. She stated that this will contribute to the objective of increasing the number of medical seats by 75,000 over a five-year period.
FDI limit in insurance sector up from 74% to 100%
FM announces a significant reform: increasing the FDI cap in the insurance sector from 74% to 100%.
Loan limit under MISS will be increased from Rs 3 lakh to Rs 5 lakh
The Finance Minister announced that the loan limit under the Modified Interest Subvention Scheme (MISS) will be increased from Rs 3 lakh to Rs 5 lakh. Currently, under MISS, farmers engaged in Agriculture and other allied activities can acquire Kisan Credit Card loans up to Rs 3 lakh at a benchmark rate of 9%.
However, the Centre provides a 2% interest subsidy on the benchmark rate, bringing down the effective rate of interest to 7 per cent. An additional 3% concession for prompt and timely repayment further reduces it to 4% per year.
50,000 Atal Tinkering Labs will be set up in government schools
FM said that in order to “foster scientific temper among young minds,” 50,000 Atal Tinkering Labs will be established in government schools over the course of the following five years.
Approximately 10,000 Atal Tinkering Labs have already been established in schools throughout the nation since the Center’s Atal Innovation Mission launched them in 2016–17. The Center gives schools funding to set up, run, and maintain the lab for five years.
In addition to tools and kits for teaching STEM (science, technology, engineering, and math) concepts, such as robotics and artificial intelligence, these labs provide equipment such as 3D printers. Students in classes six through twelve are intended users of these labs.
Export Support Mission
The Finance Minister announced that the government will launch the Export Support Mission with sectoral and ministerial targets. The Mission will be driven jointly by the ministries of commerce, MSMEs, and finance. The Export Support Mission will facilitate easy access to export credit, cross-border factoring support, and support to MSMEs to tackle non-tariff measures in overseas markets
