Union Budget Key Highlights India: Tax Saving Insights

Written by : Knowledge Center Team

2025-12-01

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The highly anticipated Union Budget 2024-25 holds significant importance in determining the direction of India's economy. The expectations of the common public, businesses and policymakers are high as the government releases its financial blueprint. The Union Budget 2024-25 is an interim budget as the current government is going through a transition, and upcoming elections will affect its continuity.

Presenting the Narendra Modi government's final budget before the May 2024 Lok Sabha elections, Finance Minister Nirmala Sitharaman stated today that India's economy is undergoing a significant transition. Setting the tone for the welfare schemes, Minister Sitharaman presented the Interim Union Budget 2024-25 on 1st Feb’ 24, focusing on the mantra of “Sabka Saath, Sabka Vikas, and Sabka Vishwas” and the national approach of "Sabka Prayas".

Key Highlights of the Budget

Union Budget 2024 redefines GDP as Governance, Development, and Performance, emphasising the government's dedication to effective leadership, impactful development, and measurable progress.
The government aims to take the country 'Viksit' (developed nation) category by 2047
The Union budget 2024-25 proposed withdrawing old direct tax demands of up to ₹25,000 pending till FY10 and up to ₹10,000 from FY11 - FY15
Two crore more houses for the poor in the coming 5 years
Over 30 crore Mudra Yojana loans are given to women entrepreneurs, with female enrolment in higher education increased by 28%
No changes in taxation - both direct and indirect
The Government has set a fiscal deficit target of 4.8%
The capital expenditure for the 2023-24 Union Budget is ₹10 lakh crore (₹10 trillion)
The fiscal deficit target is 5.1%

Empowering Key Groups

The focus of this budget is mainly on the upliftment of 4 main castes, i.e., ‘Garib' (Poor), 'Mahilayen' (Women), 'Yuva' (Youth) and 'Annadata' (Farmer). The following updates for these focused groups have been introduced:

Garib Kalyan, Desh ka Kalyan: In the past decade, government initiatives have lifted 25 crore people out of multidimensional poverty, with the Direct Benefit Transfer (DBT) system saving ₹2.7 lakh crore. PM-SVANidhi assisted 78 lakh street vendors, and PM-Vishwakarma Yojana supported artisans in 18 trades, promoting sustainable livelihoods and skill development.
Empowering Youth: Through the Skill India Mission, 1.4 crore youth received training for enhanced skill development. The PM Mudra Yojana approved 43 crore loans, nurturing the entrepreneurial dreams of the youth.
Farmer's Welfare: The PM-KISAN SAMMAN Yojana provided financial support to 11.8 crore farmers, while the PM Fasal Bima Yojana ensured crop insurance for 4 crore farmers.
Nari Shakti: With 30 crore Mudra Yojana loans, women entrepreneurs receive crucial support. Female enrollment in higher education has surged by 28%, and in STEM courses, women constitute 43% of enrollment, ranking among the highest globally. Furthermore, over 70% of houses under the PM Awas Yojana are designated for women in rural areas.

Key Highlights of the Union Budget 2024-25

Sustainable Development

Through practices like funding for wind energy and procurement of biomass aggregation machinery along with mandatory blending of CNG, PNG and compressed biogas, the government aims to meet 'Net Zero' by 2070.
1 crore households will have the opportunity to receive up to 300 units of complimentary electricity for solarisation each month.

Infrastructure and Investment

3 economic railway corridor programmes have been identified under the PM Gati Shakti initiative, aimed at enhancing logistics efficiency and lowering costs.
The country's airport count has doubled, now totalling 149. Additionally, 517 new routes have been established, facilitating the travel of 1.3 crore passengers. Indian carriers have committed to acquiring more than 1000 new aircraft.

Inclusive Development

The budget prioritises public health by promoting cervical cancer vaccination for girls aged 9-14, accelerating initiatives like Saksham Anganwadi and Poshan 2.0 for improved nutrition and early childhood care.
The introduction of the U-WIN platform aims to boost Mission Indradhanush's immunisation efforts. Health coverage under Ayushman Bharat is expanded to include ASHA, Anganwadi workers, and helpers for a more inclusive healthcare approach.
The allocation under Pradhan Mantri Awas Yojana is expected to increase from ₹79,590 to ₹80,671.
Initiatives focusing on port connectivity, tourism infrastructure, and amenities will be initiated in islands, including Lakshadweep.

Agriculture and Food Processing

The Pradhan Mantri Kisan Sampada Yojana has positively impacted 38 lakh farmers, creating employment opportunities for 10 lakh individuals.
The Pradhan Mantri Formalisation of Micro Food Processing Enterprises Yojana has provided credit linkages to 2.4 lakh Self-Help Groups (SHGs) and 60,000 individuals.
Budget 2024 showcases fiscal consolidation with a lower-than-expected fiscal deficit of 5.8% in Revised Estimates 2023-24, driven by strong revenue growth. The upcoming fiscal year, 2024-25, focuses on fiscal prudence, projecting a deficit of 5.1%. Tax rates remain unchanged while targeted benefits for startups and IFSC units continue.

Taxpayers in Budget 2024-25

Direct Taxes

The tax rates for direct taxes have remained unchanged.
Direct tax collection has increased 3 times, and return filers increased to 2.4 times in the last decade.
The government will improve taxpayer services.
Tax benefits to Start-Ups, investments made by Sovereign wealth funds or pension funds extended to 31.03.2025.
Tax exemption on certain income of IFSC units extended by a year to 31-March-2024 from 31-March-2025.

Indirect Taxes

FM proposes to retain the same tax rates for indirect taxes and import duties.
GST unified the highly fragmented indirect tax regime in India.
Average monthly gross GST collection doubled to ₹1.66 lakh crore this year.
The GST tax base has doubled.
State SGST revenue buoyancy (including compensation released to states) increased to 1.22 in the post-GST period(2017-18 to 2022-23) from 0.72 in the pre-GST period (2012-13 to 2015-16).
94% of industry leaders view the transition to GST as largely positive.
GST led to supply chain optimisation.
GST reduced the compliance burden on trade and industry.
Lower logistics costs and taxes helped reduce the prices of goods and services, benefiting the consumers.
Tax Rationalisation Efforts Over the Years
Zero tax liability for income up to ₹7 lakh, up from ₹2.2 lakh in FY 2013-14.
The presumptive taxation threshold for retail businesses increased to ₹3 crore from the previous ₹2 crore.
The presumptive taxation threshold for professionals increased to ₹75 lakh from ₹50 lakh.
Corporate income tax decreased to 22% from 30% for existing domestic companies.
The corporate income tax rate is 15% for new manufacturing companies.

Achievements in Taxpayer Services

The average processing time of tax returns has reduced to 10 days from 93 days in 2013-14.
Faceless Assessment and Appeal introduced for greater efficiency.
Updated income tax returns, new form 26AS and pre-filled tax returns for simplified return filing.
Reforms in customs led to reduced Import release time.
Reduction by 47% to 71 hours at Inland Container Depots.
Reduction by 28% to 44 hours at Air Cargo complexes.
Reduction by 27% to 85 hours at Sea Ports.

Final Words

It is noteworthy that this is not the complete 2024–2025 budget. This budget was submitted on February 1, 2024, and is the Interim Budget, sometimes called the Vote on Account. This is a short-term fiscal measure for the first several months of the 2024–2025 fiscal year.

The general elections, anticipated to occur in April or May of 2024, will be followed by the final fiscal year 2024–2025 budget. Subsequently, the recently elected administration will unveil its goals and plans for the year, including the entire budget. The budget is based on the four pillars of society—the poor, youth, women, and farmers. It is important to note that the Interim Budget is not the last word on the government's financial status and present priorities.

Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised to exercise their caution and not to rely on the contents of the article as conclusive in nature. Readers should research further or consult an expert in this regard.

Glossary

Interim Budget: A short-term financial plan presented before general elections, covering immediate expenditures.
Fiscal Deficit: The difference between the government's total revenue and total expenditure, indicating borrowing needs.
GST (Goods and Services Tax): A unified indirect tax system that replaced multiple state and central taxes, simplifying the tax structure.
PM Mudra Yojana: A government scheme providing loans to small businesses and entrepreneurs, particularly benefiting women and youth.
IFSC (International Financial Services Centre): A financial hub offering tax incentives for global financial transactions.

Frequently Asked Questions on Union Budget

The Union Budget 2024-25 serves as an interim budget, outlining short-term financial measures before the upcoming elections. It focuses on governance, development, and fiscal prudence.

No, the budget does not introduce any changes to direct or indirect tax rates. However, tax benefits for startups and IFSC units have been extended.

The budget prioritises four key groups: poor (Garib), women (Mahilayen), youth (Yuva), and farmers (Annadata). It includes schemes for housing, education, skill development, and financial support.

The budget highlights projects like economic railway corridors under PM Gati Shakti, increased airport connectivity, and green energy investments to achieve ‘Net Zero’ by 2070.

A full-fledged budget will be presented after the general elections in mid-2024. The newly elected government will introduce a comprehensive financial plan for the entire fiscal year.

Disclaimer - This article is issued in the general public interest and meant for general information purposes only. The views expressed in this blog are solely those of the writer and do not necessarily reflect the official policy or position of Canara HSBC Life Insurance Company Limited or any affiliated entity. We make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability, or availability with respect to the blog or the information, products, services, or related graphics contained in the blog for any purpose. Any reliance you place on such information is therefore strictly at your own risk. You should consult with a qualified professional regarding your specific circumstances before taking any action based on the content provided herein.

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