Budget 2024 Key Updates: Mobile phones, accessories to get cheaper; Significant reduction in TDS for rental payments

The announcements made during the Union Budget 2024 presentation are expected to change the prices of some products, either making them cheaper or costlier for consumers. Find the complete list of these products here.

Up until 12.15 pm on July 23, the Indian benchmark index BSE Sensex was trading flat, as investors soaked in the the Union Budget 2024 announcements and altered positions on various sectors carefully. However, things changed fast post-noon, and within 15 minutes, the index nosedived sharply by almost 1000 points. So, what spooked investors and how will these proposed changes impact your portfolio returns? Find out here.

The Budget has proposed a significant reduction in the tax deducted at source (TDS) for rental payments by individuals or HUF under Section 194-IB. Currently, the TDS rate stands at 5%, but the new budget aims to lower this to 2%, effective from October 1, 2024.

Additionally, the government has committed to implementing policies and regulations to enhance and streamline rental housing markets, ensuring greater availability and transparency. More details here.

Finance Minister Nirmala Sitharaman announced a reduction of 15 per cent in the Basic Customs Duty (BCD) on mobile phones while presenting the Union Budget. Along with mobile phones, the BCD on mobile Printed Circuit Board Assembly (PCBA) and mobile chargers will also be lowered to 15 per cent.

Sitharaman said: "With a threefold increase in domestic production and almost a 100-fold jump in exports of mobile phones over the last 6 years, the Indian mobile industry has matured. In the interest of consumers, I now propose to reduce the Basic Customs Duty (BCD) on mobile phones, mobile Printed Circuit Board Assembly (PCBA) and mobile charger to 15 per cent."

The reduction in BCD is expected to make mobile phones and related accessories more affordable for consumers. More details here.

Stock market benchmarks Sensex and Nifty plunged following Finance Minister Nirmala Sitharaman's announcement of a hike in the Securities Transaction Tax (STT) on Futures and Options (F&O) securities.

The 30-share BSE Sensex initially jumped as the Finance Minister began presenting the Budget for 2024-25 but quickly slipped into the red. It later plummeted 1,266.17 points to 79,235.91 during the afternoon trade.

Similarly, the NSE Nifty also showed initial gains at the start of the budget presentation but soon faced volatile trends, eventually tanking 435.05 points to 24,074.20.

(Inputs from PTI)

"As a result of these changes, a salaried employee in the new tax regime stands to save up to Rs 17,500. Apart from these, I am also making some other changes. Revenue of about Rs 37,000 crore will be forgone while revenue of about Rs 30,000 crore will be additionally mobilised. Thus, the total revenue foregone is about Rs 7,000 crores annually," says FM Sitharaman.

Under new tax regime, tax rate structure to be revised as follows:

Rs 0-Rs 3 lakh - Nil
Rs 3-7 lakh - 5%
Rs 7-10 lakh - 10%
Rs 10-12 lakh -15%
Rs 12-15 lakh - 20%
Above Rs 15 lakh - 30%

"I announce a comprehensive review of the Income Tax Act 1961. This will reduce disputes and litigation. It is proposed to be completed in 6 months," says FM Sitharaman.

"The Finance Minister's allocation of ₹26,000 crore for highway development in Bihar, including the construction of a two-lane bridge over the Ganga and the development of highways like the Patna-Purnea Expressway and Buxar-Bhagalpur Expressway, will greatly benefit highway construction companies such as GR Infraprojects, KNR Construction, and PNC Infratech. This development will also boost cement demand, benefiting producers like Ultratech, Adani Cement, India Cement, and JK Cement," says Divyam Mour, Research Analyst, Samco Securities.

"Significant investments have been made to build robust infrastructure. Over 11 lakh crore rupees for capital expenditure have been allocated for infrastructure development. This would be 3.4% of our GDP. Private investment in infrastructure by private sector will be promoted through viability gap funding and enabling policies," says FM Sitharaman.

"The government will partner with the private sector for setting up Bharat small reactors, research and development of Bharat small modular reactors, and research and development of newer technologies for nuclear energy," says FM Sitharaman.

"MSMEs consume approximately 50% of the nation's power needs and generate over 75% of GHG emissions. While the budget has committed support to MSMEs to grow and compete globally, additional support is required for the greening of the MSME sector, including easier access to climate financing," says Sameer Jain, Managing Director at Primus Partners.

"The Skilling Program will train 20 lakh youth over five years through industry-designed courses, enhancing employability and addressing skill gaps. These initiatives will reduce unemployment, increase disposable income, and stimulate economic growth, promoting a more inclusive and skilled workforce. This is a positive for NIIT Ltd and Aptech," says Sidhhesh Mehta, Research Analyst, SAMCO Securities.

Finance Minister Nirmala Sitharaman says: "Urban Housing: Under the PM Awas Yojana-Urban 2.0, the housing needs of 1 crore poor and middle-class families will be addressed with an investment of Rs 10 lakh crores. This will include the central assistance of Rs 2.2 lakh crores in the next five years..."

"The government will launch a scheme to provide internship opportunities to 1 crore youth in 500 top companies with Rs 5000 per month as internship allowance and one-time assistance of Rs 6000," says Finance Minister Nirmala Sitharaman.

"Power projects including setting up of a new 2400 MW power plant at Pirpainti will be taken up at the cost of Rs 21,400 crores. New airports, medical colleges and sports infrastructure in Bihar will be constructed. The requests of Bihar Govt for external assistance from multilateral development banks will be expedited," says FM Sitharaman.

"Our government has made efforts to fulfil the commitments in Andhra Pradesh Reorganisation Act. Recognising the state's need for capital, we will facilitate special financial support through multilateral agencies. In the current FY, Rs 15,000 crore will be arranged, with additional amounts in future years," says FM Sitharaman.

Finance Minister Nirmala Sitharaman says: "For facilitating term loans to MSMEs, a credit guarantee scheme will be introduced. The scheme will operate on the cooling of credit risks of such MSMEs. A self-financing guarantee fund will provide to each applicant cover of up to Rs 100 crore while loan amount may be larger..."

Union Budget 2024-25 proposes revision of Model Skill Loan Scheme to help 25,000 students every year. E-vouchers for loans upto Rs. 10 lakh for higher education in domestic institutions to be given directly to 1 lakh students every year for annual interest subvention of 3% of loan amount.

Sitharaman adds: "New 109 high-yielding and climate resilient varieties of 32 field and horticulture crops will be released for cultivation by farmers. In the next 2 years, 1 crore farmers will be initiated into natural farming supported by certification and branding..."

Modi 3.0 government's nine priorities for the coming years are as follows:

1. Productivity and resilience in agriculture
2. Employment and skilling
3. Inclusive HRD and social justice
4. Manufacturing and services
5. Urban development
6. Energy security
7. Infrastructure
8. Innovation, Research & Development
9. Next generation reforms

Finance Minister Nirmala Sitharaman says: "I am happy to announce the Prime Minister's package of 5 schemes and initiatives to facilitate employment, skilling and other opportunities for 4.1 crore youth over 5 years, with a central outlay of Rs 2 lakh crores. This year we have made a provision of Rs 1.48 lakh crores for education, employment and skilling..."

The Union Cabinet, chaired by Prime Minister Narendra Modi, has approved the comprehensive budget for the fiscal year 2024-25. Now, Finance Minister Nirmala Sitharaman will deliver her seventh budget speech in the Lok Sabha.

The India card payments market is forecast to grow by 11.3% in 2024 to reach INR28.4 trillion ($344 billion), according to GlobalData, Over the last few years, Union Budgets have continued to encourage digital and non-cash payment options. Now, growing consumer preference for non-cash payments is likely to push both card payments and UPI payments to new highs. However, after the cautionary tales of Paytm, the budget may prompt more comprehensive regulations to monitor and streamline non-cash payments.

Amid the unprecedented spike in futures and options (F&O) trading across India, the government is likely to take some stringent action to discourage excessive speculative trading. India's monthly F&O turnover has risen to a record Rs 8,740 lakh crore (or $1.1 trillion) in March 2024 compared to a mere Rs 217 lakh crore (approximately $27 billion) in March 2019. Therefore, a higher income tax on derivatives trading activity futures and options (F&O) trading is likely sooner or later similar to income from lottery or cryptocurrencies in the Union Budget.

“The venture capital industry is very young... Removal of the Angel Tax has been a long-standing demand of the industry. Stakeholders of the ecosystem have made representation to the Govt with an aim to find a solution for the same… It also discourages potential investors to invest because of fear of coming under tax authorities scrutiny,” says Anil Joshi, Managing Partner, Unicorn India Ventures.

Sensex has climbed 264.33 points to 80,766.41 in early trade, while Nifty is up 73.3 points to 24,582.55.

Finance Minister Nirmala Sitharaman has reached the Ministry of Finance ahead of her Union Budget 2024 presentation. She was reportedly seen in a white saree with a violet border upon her arrival.

Union Finance Minister Nirmala Sitharaman is set to present the estimated receipts and expenditures for the Union Territory of Jammu and Kashmir for the fiscal year 2024-25, following the presentation of the General Budget. This marks the fifth budget for Jammu and Kashmir since the abrogation of Article 370.

Earlier, in February, the Finance Minister proposed an interim budget of Rs 1.18 lakh crore for the region. This interim budget projected a fiscal deficit of Rs 20,760 crore, with Capital Expenditure Contribution towards Gross State Domestic Product (GSDP) at 14.64 percent and an anticipated GSDP growth rate of 7.5 percent.

The Global Trade Research Initiative (GTRI) has urged the government to maintain the current import duties on smartphone components in the upcoming Budget, warning that reducing these tariffs could result in an increase in superficial assembly plants heavily dependent on imported parts.

GTRI highlighted the success of the current schemes and tariff structure, which have facilitated duty-free imports of components for exports. Ajay Srivastava, GTRI Founder, stated, "Do not cut import duty on smartphone components in this Budget. Removing tariffs could lead to an increase in superficial assembly plants that rely heavily on imported parts, contributing little to the local economy."

He further explained that imported components and subassemblies account for up to 90 per cent of the bill of material value for India-made phones. Currently, the import tariffs on the product are set at 20 per cent, while the duty on components ranges between 0 and 20 per cent. Srivastava reinforced that maintaining these tariffs is crucial for several compelling reasons.

(Inputs from PTI)

The Union Budget is expected to emphasise increasing capital investment in various sectors, including infrastructure, construction, manufacturing and green energy, according to Dr. Trilochan Tripathy, Professor of Finance at XLRI. He noted that over recent years, the central government has consistently boosted capital expenditure by about 30 per cent annually. This year, a substantial increase is anticipated, with overall capital expenditure projected to grow by approximately 50 per cent for the 2024-25 fiscal year.

"India will definitely grow at a faster rate because the whole attention of the government is to promote capital expenditure," Tripathy told PTI.

He also mentioned that Finance Minister Nirmala Sitharaman is expected to present an optimistic growth target of over 7.5 per cent in the Union Budget, surpassing the recent forecasts of 7 per cent by the International Monetary Fund (IMF) and the Asian Development Bank (ADB).

To achieve this ambitious growth target, Tripathy emphasised the need for a broad-based allocation of resources across sectors. He expressed hope that the Budget will prioritise expanding capital investment in areas such as infrastructure, construction, manufacturing, green sustainable energy, clean energy technologies, and defence and aerospace, identifying these sectors as key drivers for economic growth.

(With inputs from PTI)

Here are some key numbers to watch in Budget 2024:

Fiscal Deficit: The budgeted fiscal deficit for the current fiscal is projected at 5.1 per cent, down from 5.8 per cent last fiscal year. Improved tax buoyancy is expected to provide better projections. The government aims for a fiscal deficit of 4.5 per cent of GDP by FY26.

Capital Expenditure: The planned capital expenditure for this fiscal is Rs 11.1 lakh crore, up from Rs 9.5 lakh crore last fiscal year. The government continues to push for infrastructure development and incentivise states to increase capex.

Tax Revenue: The Interim Budget projected gross tax revenue at Rs 38.31 lakh crore for 2024-25, marking an 11.46 per cent growth. This includes Rs 21.99 lakh crore from direct taxes and Rs 16.22 lakh crore from indirect taxes.

GST: GST collection for 2024-25 is estimated to rise to Rs 10.68 lakh crore, an 11.6 per cent increase. Final tax revenue figures will be crucial in the full Budget.

Borrowing: The government's gross borrowing was budgeted at Rs 14.13 lakh crore for the current financial year. This borrowing is crucial to fund the fiscal deficit and will be closely watched, especially after a significant dividend from the RBI.

Nominal GDP: India's nominal GDP growth is estimated at 10.5 per cent, reaching Rs 327.7 trillion. With expectations of a normal monsoon, improved revenue collections, and a rural consumption uptick, growth estimates could be revised upwards. Real GDP growth is projected at 7.2 per cent by the RBI.

Dividend: The interim Budget projected Rs 1.02 lakh crore from RBI and financial institutions. This will be revised upwards as the RBI has already made a surplus transfer of Rs 2.11 lakh crore in May.

(Inputs from PTI)

The Union Budget 2024, to be presented by Finance Minister Nirmala Sitharaman today, is set to make history. This will be her seventh consecutive budget presentation—a record for being the most by any Finance Minister in India. She will surpass the record set by former Prime Minister Morarji Desai, who presented five annual budgets and one interim budget between 1959 and 1964 as Finance Minister.

The Union Budget primarily aims to promote rapid and balanced economic growth, ensure efficient resource allocation and reduce unemployment and poverty, all while addressing wealth and income disparities.

The Union Budget of India, also known as the Annual Financial Statement under Article 112 of the Constitution, is the annual budget set by the Ministry of Finance for the next financial year. It details the government's revenue and expenditure plans for the upcoming fiscal year, from April 1 to March 31.

Welcome to Business Insider India’s live coverage of Union Budget 2024! Today, Finance Minister Nirmala Sitharaman will present the budget at 11 am IST. This document will provide a snapshot of the past decade’s performance, while outlining the roadmap for achieving Viksit Bharat by 2047.