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Important Takeaways from The Union Budget for The Financial Year 2024-25

Important Points from the Union Budget for The Financial Year 2025














The fiscal deficit is estimated at 4.9% of the GDP in FY 2025. The fiscal deficit is calculated as the government's total expenditure minus total receipts. 

The 'Budget' word is not mentioned in the Indian constitution. It is mentioned as the "Annual Financial Statement" in article 112 of the constitution. Budget is prepared by the Budget Division of the Department of Economic Affairs in the ministry of finance.
According to the article 266 of the Indian Constitution, Parliamentary approval is required to draw money from the Consolidated Fund of India.
RK Shanmukham Chetty was the first finance minister of independent India. Morari Desai presented the budget ten times which is the maximum number of times by any finance minister in India till now. 
Receipts estimates : The budget for FY 2025 estimates 31.3 lakh crore revenue receipts and 16.9 lakh crore capital receipts. 
Expenditure estimates : The revenue expenditure will be 37.1 lakh crore and the capital expenditure will be 15 lakh crore for the FY 2025. 
The fiscal deficit is estimated at 4.9% of the GDP in FY 2025. The fiscal deficit is calculated as the government's total expenditure minus total receipts. 
Now, let's understand where the rupees for the government comes from, means the Government receipts: -
27% from borrowing, 19% from income tax, 18% from GST, 17% from corporate tax and 9% from non-tax receipts. 
Where the government rupees go, means the Government expenditures :- 
 21% go to the states which is sharing of taxes and duties. 19% go to the intrest payment of previous loans, 16% go to the central sector schemes, 9% go to the finance commission's and other transfers, 9% go to the others expenditures, 8% go to the centrally sponsored schemes.
GDP( Gross Domestic Product) was 8.2% in the financial year 2023-24 and it is expected to grow at the rate of 6.5% - 7% in the current financial year 2024-25.
Capital gain tax: - Short term capital gain tax is 20% and long term capital gain tax is 12.5% in the current financial year. The capital gain tax exemption limit has been raised from 1 lakh earlier to 1.25 lakh now which is good for the investment in mutual fund and equity etc.
Angel tax is abolished which is very prudential move to enhance startups' growth in the country. 
The corporate tax on foreign companies in India is reduced from 40% to 35% to attract more foreign investment.
Personal income tax: The standard deduction limit increased from 50 thousand to 75 thousand. There are also changes in the new tax regime. Earlier the new tax regime was as follows:- 
0-3 lakh the tax was nil, 3-6 lakh 5%, 6-9 lakh 10%, 9-12 lakh 15%, 12-15 lakh 20% and above 15 lakh the tax was 30%. 
Now, the new tax regime with the changes announced in the budget is as follows: 
0-3 lakh the tax is nill, 3-7 lakh 5%, 7-10 lakh 10%, 10-12 lakh 15%, 12-15 lakh the tax is 20%  and above 15 lakh the tax is 30%.

Now, we will discuss some important sections of the Income Tax Act, 1961 which will guide the tax payers in filing their income tax returns : -
Section 80 C - The exemption limit is 1.5 lakh for the investment in Sukanya Samriddhi Account, PPF, insurance like LIC, Tax saving FD (for five years) etc. 
Section 16(ia): Standard deduction, earlier the exemption under this section was 50 thousand,but it is increased to 75 thousand in the budget for FY 25.
Section 10(14): relief for some allowances.
Section 80 D : exempt premium paid for medical insurances.
Section 80 TTA : Provides relief upto 10 thousand for intrest on savings accounts.
Section 80 CCD(1) : Provides relief upto 1.5 lakh for the employees contribution to NPS.
Section 80 CCD(2) : Provides relief for the employers contribution to NPS.
Section 80 G : Relief for donations paid to charitable institutions, trust etc.
Section 87 A: Provides rebate upto rupees 12,500.
Section 89(1): Provides relief for arrears, gratuity received etc.
Only 7.4 crore people filed income tax returns in the financial year 2022-23, out of which only 2.24 crore people paid income tax in the financial year 2022-23, which makes only 1.6% of the total India's population.



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