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Roadmap for pursuit of ‘Viksit Bharat’

Honourable Finance Minister presented her seventh budget with focus on “Garib (Poor), Mahilayen (Women), Yuva (Youth) and Annadata (Farmer). With the theme of “Employment, Skilling, MSMEs and Middle Class”, the Union Budget stands as a blueprint for navigating challenges and seizing opportunities.

This budget is poised to empower every citizen, strengthen institutional frameworks, and propel India towards becoming a global economic powerhouse. The Budget underlines roadmap for pursuit of “Viksit Bharat“ goal by sustained efforts in below 9 priorities :

• Productivity and resilience in Agriculture
• Employment & Skilling
• Inclusive Human Resource Development and Social Justice
• Manufacturing & Services
• Urban Development
• Energy Security
• Infrastructure
•  nnovation, Research & Development
•  Next Generation Reforms

Post economic recovery and transformational reforms, this budget underscores the government's commitment to fostering inclusive growth, bolstering infrastructure, and driving innovation across sectors.

For the year 2024-25, the total receipts other than borrowings and the total expenditure are estimated at ₹32.07 lakh crore and ₹48.21 lakh crore respectively. The net tax receipts are estimated at ₹25.83 lakh crore. The fiscal deficit is estimated at 4.9% of GDP.

We commend the Honourable Finance Minister for the right budget proposals in current times of Amrit Kaal and Vision to develop India as an Economic powerhouse under the dynamic leadership of our Honourable Prime Minister

With Best Regards,

Sunil Sharma and Team Radisson

DIRECT TAX

New Tax Regime under Section 115BAC (Effective from April 1, 2025)

Income Tax Rates for Individuals and HUFs

Benefits for Salaried Employees

• Standard Deduction Increase: The standard deduction for salaried employees has increased from ₹50,000 to ₹75,000.
• Tax Savings: Salaried employees can save ₹17,500 in income tax under the new tax regime.

DIRECT TAX

New Tax Regime Benefits

• Deduction on family pension (as per clause (iia) of Section 57) has increased from ₹15,000 to ₹25,000.
• Deduction under Section 80CCD(2) for contributions made by employers (other than CG/SG employers) has increased from 10% of salary to 14% of salary.

Incentivizing Operations from IFSC (w.e.f 1st April 2025)

•  Income from Retail funds and Exchange Traded Funds on a recognized stock exchange located in IFSC are now exempted.
• Specified income of Core Settlement Guarantee Funds set in IFSC is exempted.
• Venture Capital Funds are exempt from explaining the source of funds in creditor records under section 68 of Income Tax Act,1961.
• Finance companies in IFSC are now exempted from the provisions of thin capitalization of Interest u/s 94B*

DIRECT TAX

• Angel Tax u/s 56(2)(viib) to be abolished w.e.f 1st April 2025
• Domestic cruise ship operations by non-residents (w.e.f 1st April 2025)
• Simplified tax regime u/s 44BBC for non-resident cruise ship operators at 20 % of their passenger revenue will be considered as their taxable income
• Lease income earned by a foreign company from a subsidiary operating cruises in India which has opted tax regime u/s 44BBC will be exempt from tax (until AY 2030-31)
• The corporate tax rate on foreign companies is reduced from 40 % to 35 %
• Buyback of shares will be taxed in the hands of recipient i.e.shareholders in the same way as dividend with effect from 1st October 2024.

DIRECT TAX

• The STT rate on sale of option will increase from 0.0625 % to 0.1 % whereas the STT rate on sale of futures will rise from 0.0125 % to 0.02 % , effective from 1st October 2024
• U/s 28 amendment, rental income from a residential house property by the owner will be taxable only under the head “House Property”.
• To broaden the scope of Section 206C( 1F), it is proposed to insert “any other goods” to levy TCS on goods valued over ₹10 lakh at 1% by seller. Such goods would be in nature of luxury goods.
• Section 193 is amended to include TDS on interest payment for Floating Rate Savings (Taxable) Bonds, 2020 , if the interest amount exceeds ₹10,000,w.e.f. 1st October 2024.
•  Explanation 3 of sub -section(1) of section 37 clarifies that “expenditure incurred for any purpose which is an offence or prohibited by law” is disallowed. It is proposed to include settlement amounts resulting from infractions of law and contraventions, and thus, such amounts should not be permitted as business expenses.

DIRECT TAX

Capital Gains Tax Amendments

•  Budget 2024 proposes an overhaul of capital gains taxes, setting a 20% tax rate on all short-term gains as per Section 111A for all financial assets.
•  Long term capital gains on some financial assets will now attract from 12.5% to 10%.
• The exemption limit for long-term capital gains under Section 112A has increased from ₹1 lakh to ₹1.25 lakh
• The provisions of clause (iii) of section 47 is proposed to be amended to further clarify that the said exemption as provided in above section on transfer of a capital asset is available to only individuals or Hindu Undivided Families.
• Property & Jewellery bought or inherited on or after 2001, will not get indexation benefit but Capital Gain will be taxed at 12.5% instead of 20% (earlier)

DIRECT TAX

Amendments in Black Money Act

• Section 42 and 43 of the Black Money Act impose penalties on Indian residents (excluding those not ordinarily resident) who fail to disclose foreign income and assets in their income tax returns. The penalties apply if assets or income from outside India are inaccurately reported or not reported at all. Currently, a penalty of up to ten lakh rupees is applicable, irrespective of the asset's value, unless it's a bank account with a balance not exceeding five lakh rupees.
•  To address concerns about the low threshold triggering penalties for assets worth less than the penalty itself, amendments are proposed. These amendments suggest raising the threshold to twenty lakh rupees for assets other than immovable property. This change is scheduled to come into effect from October 1, 2024.

DIRECT TAX

Vivad se Vishwas Scheme, 2024

• The Direct Tax Vivad se Vishwas Act, 2020 was introduced to resolve pending appeals as of January 31, 2020, and received positive feedback from taxpayers while generating significant revenue for the Government. Due to the increasing number of appeals and pending litigation at the CIT(A) level, a new Direct Tax Vivad se Vishwas Scheme, 2024 is proposed. This scheme aims to settle disputed tax issues, thereby reducing litigation without substantial cost to the government. The scheme will be enforced from a notified date, and its end date will also be notified accordingly.

DIRECT TAX

Amendment of provisions pertinent to Equalisation Levy

•  From August 1, 2024, the two percent equalisation levy will not apply to consideration received or receivable for e-commerce supplies or services. Income arising from such supplies or services provided between April 1, 2020, and August 1, 2024, will be exempt under section 10(50) of the Act, subject to specified conditions.

Amendment in Section 276B

• An amendment is proposed to exempt individuals covered under clause (a) of this section from prosecution if they pay the deducted tax for a quarter to the Central Government by the deadline for filing the quarterly statement under section 200(3) of the Act. This change will be effective from 1 October 2024.

DIRECT TAX

Penalty for failure to furnish statements

• The amendment suggests that no penalty will be imposed if the person proves they have paid TDS/TCS, fees, and interest to the Central Government, and filed the statement within one month from the prescribed due date. This amendment is set to be effective from April 1, 2025.

Statement by liaison office of non-resident in India

• The proposal suggests that the timeframe for filing such statements will be specified in Rules. To enhance compliance, failure to file may incur a penalty of ₹ 1,000 for every day for which the failure continues, if the period of failure does not exceed three months; and one lakh rupee in any other case, under new section 271GC. However, this penalty can be waived if reasonable cause is proven by the assessee, as per an amendment to section 273 B. These changes are planned to take effect from April 1, 2025.

DIRECT TAX

Amendments in Assessment Proceedings

• It is proposed that in cases where assessments were made under section 144 (best judgement), the Commissioner (Appeals) can set aside the assessment and refer it back for fresh assessment by the Assessing Officer. Section 153 (3) will also be amended to specify time limits for disposing of such cases set aside by the Commissioner (Appeals) These amendments will be effective from October 1, 2024, applicable to appellate orders issued by the Commissioner (Appeals) on or after that date

Amendments in Section 80G

• It is proposed to amend sub-clause (iiihg) of clause (a) of sub -section (2) of Section 80 G of the Act to provide that in computing the total income of an assessee, there shall be deducted, in accordance with and subject to the provisions of this section, any sums paid by the assessee in the previous year as donations to the National Sports Development Fund set up by the Central Government. This amendment will take effect from the 1st April, 2025 and will accordingly apply to assessment year 2025-26 and subsequent assessment years 14

DIRECT TAX

TDS Rates

DIRECT TAX

Amendments for Partnership Firms

•  The budget proposes a new TDS section (194T) to simplify tax collection for certain partner payments. Partnership firms will deduct TDS on salary, remuneration, commission, bonus, and interest exceeding ₹20,000 per partner annually. The TDS rate will be 10%. It will be applicable from 1st April, 2025.

Payment of Remuneration to Working Partner

DIRECT TAX

Income Tax – Assessments

• Block assessment in case of search cases (w.e.f. 1stnSeptember 2024):
•  A block period covering six previous years preceding the search year and ends on the search date. Replaces regular assessments for this period with a single consolidated assessment.
• The undisclosed income falling within the block period will be taxed at 60%, with no surcharge or interest on undisclosed income.
• Penalty on the undisclosed income shall be levied at 50% of the tax payable, however no penalty shall be levied if such income is disclosed income in the return furnished in pursuance of search u/s 148 and and pays the tax along with the return.

DIRECT TAX

• Reassessment u/s 147 (w.e.f. 1st September 2024):
  
• Time limit for reassessment when income escaping assessment is greater than ₹50 lakhs is reduced from ten years to five years.

However searches initiated before 1st September 2024 shall continue as per the prevailing act when the search was initiated.

Refunds u/s 245

• The Assessing Officer (A.O.) (w.e.f. 1st October 2024) can now adjust the entire refund against any tax owed by the taxpayer. Previously, only a partial set-off was allowed.
• The A.O. can withhold refunds for up to 60 days after completing an assessment or reassessment and No additional interest will be paid on the withheld refund amount.

DIRECT TAX

Appeals (w.e.f.1st October 2024)

• Assessees can now appeal against penalty orders issued under Section 158BFA (undisclosed income during tax raids).
• The deadline for filing an appeal with ITAT is increased from 60 days to 2 months from the end of the month the order is communicated.

Charitable Trusts and Institutions

•  The union budget proposes to gradually merge the two tax exemption regimes for charitable trusts into one that are contained in Sec 10 (23C) & U/s 11 to 13.
•  The Principal Commissioner/Commissioner will now have the authority to waive the deadline (condone the delay) for filing an registration application.
•  Merging exempt Trusts with other Trusts without Tax Penalties-A new Section 12AC will be introduced. This will outline specific conditions under which mergers won't be subject to Chapter XII-EB taxes. This provides clarity and avoids unintended tax burdens.

INDIRECT TAX– GST (1/6)

Exclusion from scope of GST

• Un-denatured extra neutral alcohol or rectified spirit used for manufacture of alcoholic liquor
• Apportionment of co -insurance premium by lead insurer and co-insurer in co-insurance agreements
• Ceding commission or reinsurance commission

Reverse charge mechanism

• Section 13(3)(b) has been amended stating time of supply is 60 days from the date of issue of invoice where invoice is required to be issued by the supplier
• New clause inserted– section 13 (3)(c), time of supply is date of issue of invoice where invoice is to be issued by recipient
• Where supplier is registered solely for the purpose of tax deduction at source under section 51 of CGST Act, recipient of goods or service or both shall issue invoice

INDIRECT TAX – GST (2/6)

Input tax credit

• New sub-section 16(6) has been inserted which states that, person shall be entitled to take input tax credit in return under section 39 –
•  Where cancellation of registration was revoked
• ITC was eligible for availment under section 16(4) on the date of order of cancellation of registration.

 Return has been

• filed upto 30th of November following the financial year to which such invoice or debit note pertains OR
• Within 30 days from the date of order of revocation of cancellation of registration.

INDIRECT TAX – GST (3/6)

Input tax credit (Continued)

• Eligible CENVAT Credit shall be available for availment by Input Service Distributor even if the invoices are received prior to appointed day i.e. 01st July, 2017.
• New sub-section 16(5) of CGST Act, 2017 states that the time limit to avail input tax credit in respect of any invoice or debit note in GSTR 3B is 30th November, 2021 for the FY 2017-18, 2018-19, 2019-20 & 2020-21.

Further, no refund shall be admissible for which tax has been paid or input tax credit has been reversed.

GST Returns

• As per section 39(3), Registered person who is required to deduct tax at source, shall be required to mandatorily furnish return electronically irrespective of whether any deduction has been made in the said month or not.

INDIRECT TAX – GST (4/6)

Pre-deposit, time limit & interest

• Section 107(6) has been amended stating that the maximum amount for filing appeal with the appellate authority has been reduced to ₹20 crores CGST & SGST respectively.
• Section 112(8) has been amended stating that the amount of pre-deposit for filing appeal with the Appellate Tribunal has been reduced to 10 % with a maximum of ₹20 crores CGST & SGST respectively.
• New section 128A has been inserted to provide for conditional waiver of interest and penalty in respect of demand notices issued under section 73 of the Act for the FYs 2017-18, 2018-19 and 2019-20, except the demands notices in respect of erroneous refund. No refund shall be admissible where interest & penalty has already been paid.

INDIRECT TAX – GST (5/6)

Miscellaneous

• Insertion of new section 74A – Determination of tax not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilized for any reason pertaining to Financial Year 2024-25 onwards.
•  Section 75(2A) is being inserted for redetermination of penalty demanded where any Appellate Authority or Appellate Tribunal or court concludes in a notice that the penalty under section 74A(5)(ii) is not sustainable.
•  New subsection 70(1A) is being inserted which states that authorized representative can appear on behalf of the summoned person before the proper officer in compliance of the summons issued.

INDIRECT TAX – GST (6/6)

Miscellaneous (Continued)

• Section 73 and 74 shall be applicable only upto financial year 2023-24.
• Section 122(1b) of CGST Act, shall be applicable to only those electronic commerce operator who is liable to collect tax at source under section 52 with effect from the 1st day of October, 2023.
•  New sub-section 54(15) of CGST Act & section 16(5) of IGST Act has been inserted stating that – no refund of unutilized ITC or Integrated tax paid shall be allowed in cases of zero- rated supply of goods where such goods are subjected to export duty.

INDIRECT TAX – CUSTOMS (1/2)

Changes in sector specific customs duty:

• Basic Custom Duty (BCD) on mobile phone, mobile PCBA and mobile charger cut to 15%
• Customs duties on 25 critical minerals for sectors like nuclear energy, renewable energy, space, defence, telecommunications, and high-tech electronics are made fully exempt and reduce BCD on two of them.
• BCD on certain broodstock, polychaete worms, shrimp and fish feed reduced to 5 %.
• Customs duty on various inputs for manufacture of shrimp and fish feed has been exempted.
• BCD on real down filling material from duck or goose reduced.
• Customs duties on gold and silver reduced to 6% and that on platinum to 6.4%.
• BCD on ferro nickel and blister copper removed

INDIRECT TAX - CUSTOMS (2/2)

Changes in sector specific customs duty: (Continued)

• BCD on oxygen free copper for manufacture of resistorsremoved.
• BCD on ammonium nitrate reduced from 7.5% to 10%
• To promote domestic aviation and boat & ship MRO, the period for export of goods imported for repairs has been extended from 6 months to 1 year.

MSME

•  Credit guarantee scheme for term loans without collateral or third-party guarantee.
•  Self-financing guarantee fund providing cover up to ₹100 crore per borrower.
•  New MSME credit assessment model based on digital footprint.
•  Enhanced Mudra loan limit to ₹20 lakh.
• Establishment of 24 new SIDBI branches in MSME clusters.
• E-commerce export hubs for MSMEs in PPP mode.
•  Lower turnover threshold for MSME buyers on TReDs platform from ₹500 crore to ₹250 crore.
• A new mechanism will provide credit support to MSMEs during stress periods to prevent them from becoming NPAs.

GREEN ENERGY (1/2)

PM Surya Ghar Yojana (Outlay: ₹75,021 crore)

Objectives

• Power 10 million households.
• Create 17 lakh direct jobs across the solar value chain.
• Add 30 GW of solar capacity.
• Reduce 720 million tonnes of CO2 equivalent.
•  Free electricity up to 300 units for 1 crore households.

Nuclear Energy Initiatives (Outlay: ₹13,208 crore)

 Key Focus: Significant part of "Viksit Bharat" energy mix.

Government-Private Sector Partnership

• Setting up Bharat Small Reactors.
• Research and development of Bharat Small Modular Reactors.
• Development of new nuclear energy technologies.

GREEN ENERGY (2/2)

Advanced Ultra Super Critical (AUSC) Thermal Power Plants

• NTPC and BHEL joint venture to set up an 800 MW commercialplant.
• Development of indigenous capacity of high-grade steel and advanced metallurgy materials.

Energy Efficiency Measures

• Road Map Creation: For hard-to-abate sectors.
• Investment-Grade Energy Audit
• 60 traditional micro and small industry clusters (e.g., brass, ceramic) in phase one.
•  Financial support for cleaner energy transition.
• Next Phase: Expand to 100 additional clusters.

RESEARCH AND INNOVATION

•  Anusandhan National Research Fund for basic research and prototype development to be operationalised.
•  Financing pool of ₹1 lakh crore for spurring private sector- driven research and innovation at commercial scale.
• Venture capital fund of ₹1,000 crore to be set up for expandingthe space economy by 5 times in the next 10 years.

HEALTHCARE

Medicines and Medical Equipment

• To provide relief to cancer patients, Finance minister has proposed to fully exempt three more medicines from customs duties.
• Additionally, the finance minister proposed changes to the basic custom duty for X-ray tubes and panel detectors used in medical X-ray Machines.

TOURISM

Developments

•  Development of Vishnupad Temple Corridor at Gaya & Mahabodhi Temple Corridor at Bodh Gaya, modelled on Kashi Vishwanath Temple corridor.
• Development initiative for Rajgir will be undertaken which holds religious significance for Hindus, Buddhists and Jains.
• Development of Nalanda as tourist centre besides reviving the Nalanda University.
• Assistance for development of the scenic beauty, temples, monuments, craftsmanship, wildlife sanctuaries, natural landscape and pristine beaches of Odisha state.

INFRASTRUCTURE (1/3)

• A substantial 11% hike in capital expenditure for infrastructure and employment generation, ₹11.11 trillion (3.4% of GDP).
• ₹11,500 crore Financial support for projects - Kosi-Mechi intra-state link and 20 other ongoing and new schemes.
• ₹1.5 lakh crore to states as long-term interest free loans to support resource allocation.
• ₹26,000 crore for Road Connectivity Projects and ₹21,400 crore power projects in Bihar.

Objective

• Promote water supply, sewage treatment and solid waste management projects and services for 100 large cities through bankable projects.

INFRASTRUCTURE (2/3)

Objective

• To provide assistance for
• flood management projects in Assam, Sikkim & Uttarakhand.
• reconstruction and rehabilitation in Himachal Pradesh.

Development

•  Phase IV of PMGSY to provide all-weather connectivity to 25,000 rural habitations.
• Envisioning a scheme to develop 100 weekly ‘haats’ or street food hubs in select cities
• Transit Oriented Development plans for 14 large cities with a population above 30 lakh.
•  New airports, medical colleges, and sports infrastructure in Bihar.

INFRASTRUCTURE (3/3)

• Polavaram irrigation project and Infrastructure for water, power, railways, and roads in Kopparthy and Orvakal nodes in Andhra Pradesh
• Investment-ready “plug and play” industrial parks in or near 100 cities.
• Funds will be provided under the Andhra Pradesh Reorganization Act, for the development of essential infrastructure such as water, power, railways and roads in Kopparthy node on the Vishakhapatnam-Chennai Industrial Corridor and Orvakal node on Hyderabad-Bengaluru

HOUSING

Cost Outlay

•  PM Awas Yojana Urban 2.0 - investment of ₹10 lakh crore

Objective

• PM Awas Yojana (Grameen) - 2 crore homes in rural areas over the next five years
• Encouraging state to reduce Stamp duty for women property buyers.

Development

•  Enabling policies and regulations for efficient and transparent rental housing markets with enhanced availability will also be put in place.

AGRICULTURE & ALLIED (1/2)

• Provision of ₹ 1,51,851 crore for agriculture and allied activities
• 1 crore farmers to adopt natural farming in 2 years ;109 new seed varieties across 32 field and horticulture crops will be released
• Through scientific institutions and gram panchayats, 10,000 need-based bio-input resource centres will be established
• Launch new scheme Jan Samarth -based Kisan Credit Card in 5 states
• Financial support for Shrimp farming, processing and export will be facilitated through NABARD
• Introduction of a National Cooperation Policy for the overall development of the country
• To promote Farmer Producer Organizations, co-operatives & start -ups for vegetable supply chains, large clusters to be developed closer to consumption centres

AGRICULTURE & ALLIED (2/2)

• To achieve Atmanirbharta in pulses and oilseeds, efforts will focus on boosting production, storage, and marketing
• Digital Public Infrastructure (DPI) will cover farmers and their lands in 3 years, a digital crop survey in 400 districts, registering 6 crore farmers and their lands.
• Will help Natural Farmers with verification and branding.

DEFENCE

• To the Ministry of Defence(MoD) budget for FY25 has been set at ₹6.21 lakh crore in the interim budget, marking a 4.72% increase from the previous year.3
• Defence spending as a percentage of government expenditure stood at 13%, while as a percentage of GDP, it remained below 2%.
• Estimated expenditure through defence sector accounted for ₹4,54,773 crore.

RAILWAYS

•  For FY 2024-25, the government has allocated record Capex to ₹2,62,200 crore including gross budgetary support of ₹2,52,200.

EMPLOYMENT & SKILLING

• Five schemes to focus on 4.1 crore youth over 5 years with a central outlay of ₹2 lakh crore.
• Government to provide financial support for loans up to ₹10 lakhs for higher education in domestic institutions.
• Finance Minister announced employment-linked skilling through schemes as part of the PM's package.
• First-timers will receive one month's wage upon entering the workforce in all formal sectors.
• A direct benefit transfer (DBT) of one month's salary, up to ₹15,000, will be provided in three instalments.
• The eligibility limit for this benefit will be a salary of ₹1 lakh per month, and it is expected to benefit 2.1 lakh youths."