Union Budget 2024

Fuelling India's transformation

Economic
indicators

• GDP grew by 8.2 percent in FY24.

The economy is expected to grow
6.5–7 percent in FY25.*

• The fiscal deficit is expected to decline

to 4.9 percent of GDP in FY25, down
from the previous estimate of 5.1
percent. The aim is to reach a fiscal
deficit of below 4.5 percent by FY26.

• CPI inflation moderated to 5.4 percent

in FY24 from 6.7 percent in FY23. It
could moderate to 4.5 percent in FY25
and 4.1 percent in FY26.

• The RBI has kept policy rates

unchanged at 6.5 percent since
February 2023.

• A 3 percent decline in merchandise

exports was partly offset by 4.8
percent in services export growth in
FY24. The current account deficit
narrowed to 0.7 as a percent of GDP.

• Gross FDI inflows were US$70.9 billion

in FY24, down by US$0.5 billion from
FY23. However, FDI inflows in the
infrastructure and power sectors
doubled in FY24.

© 2024 Deloitte Touche Tohmatsu India LLP.

 • India received 122 AI-related FDI
projects in 2022, making it a top
destination for AI-related FDI.

• Forex reserves hit a record high of

US$652.0 billion in June 2024,
equivalent to 11 months of import
cover, reaching US$645.6 billion in
FY24.

• India's stock market capitalisation to

GDP ratio ranked fifth globally, and
the NSE's investor base tripled to 92
million in four years.

• INR was the least volatile currency

among its emerging market peers and
depreciated by 3 percent in FY24 at
INR/US$83.4. Due to a narrow current
account deficit and strong FPIs, INR
remained unchanged in Q1 FY25.

• Industrial growth accelerated by

9.5 percent in FY24, with the
manufacturing and construction
sectors leading the way.

*Growth is measured on a year-over-year basis on

fundamental values. The predicted numbers are
per the Economic Survey released on 22 July 2024.

© 2024 Deloitte Touche Tohmatsu India LLP.

Union Budget 2024
Fuelling India's transformation

Policy
announcements

Employment, skilling, MSMEs and middle

class are the key themes for Budget
2024–25.

• Productivity and resilience in

agriculture – INR 1,520 billion
allocated for agriculture and allied
sectors; boost to natural farming by
inducting 10 million farmers;
facilitation of Digital Public
Infrastructure (DPI) in agriculture
through digital crop surveys, land
registry digitisation and kisan credit
cards

• Employment and skilling – Three

employment-linked incentive schemes
announced; one month wage
reimbursement for first-time workers
up to INR 15,000; EPF reimbursements
to employers and employees in the
manufacturing sector for four years;
EPF reimbursements for all sectors up
to INR 3,000 per month for two years;
1,000 industrial training institutes to
be upgraded; women skilling
programmes announced; revision of
the Model Skill Loan Scheme of up to
INR 0.75 million; support through
higher education loans in India up to
INR 1 million with a 3 percent interest
subvention

• Inclusive human resource

development – Purvodyaya or
support to five eastern states (Bihar,
Jharkhand, Bengal, Odisha and Andhra
Pradesh) through the development of
essential infrastructure, industrial
corridors and expressways; 100+
branches of the Indian Post Payments
Bank to be set up in the North-East
region

• Manufacturing and services – A new

credit assessment model for MSMEs
based on digital footprint; turnover
threshold for onboarding on TReDS
reduced to INR 2.5 billion; internship
allowance introduced; training cost
and 10 percent of the internship
allowance permitted to be used from
company’s CSR funds

© 2024 Deloitte Touche Tohmatsu India LLP.

 • Urban development – Encourage
states to charge lower stamp duties
for all and further lower for
women-purchased property; rural and
urban land digitisation of GIS
mapping, cadastral maps and land
registry; 100 weekly haats for street
food hubs; INR 10,000 billion under
the Pradhan Mantri Awas Yojana
Urban 2.0

• Energy security – Ten million

households to obtain free electricity
under the PM Surya Ghar Muft Bijli
Yojana; R&D boost to Bharat Small
Modular Reactors and newer
technologies for nuclear energy; a JV
between NTPC and BHEL to set up an
800MW commercial plant

• Infrastructure – Provision of INR

11,111.1 billion for infrastructure
(3.4 percent of GDP); market-based
financing framework to be introduced;
INR 1,500 billion to states as long-term
interest-free loan; financial aid to
select states for flood management
and tourism development

• Innovation and R&D –

Operationalisation of the Anusandhan
National Research Fund for prototype
research; financing pool of INR 1,000
billion for private sector-driven R&D;
venture capital fund of INR 10 billion
to be set up for the space economy

• Procedural compliance changes –

Insolvency and Bankruptcy Code (IBC)
framework to be revised and
additional tribunals to be set up
exclusively for Companies Act matters;
extension of the Centre for Processing
Accelerated Corporate Exit (C-PACE)
for voluntary closure of LLPs

• Regulatory changes – Flexible mode

for financing the leasing of aircraft and
ships, and pooled funds of private
equity through a variable company
structure; power to grant immunity
under the Benami Property
Transactions Act introduced;
exemption from penal provisions for
reporting under the Black Money
(Undisclosed Foreign income and
Assets) and Imposition of Taxes Act,
2015 allowed where assets (except
immovable property) are up to
INR 2.5 million; FDI and ODI to be
simplified for facilitation and to
promote the use of the Indian rupee
for overseas investment

© 2024 Deloitte Touche Tohmatsu India LLP.

Union Budget 2024
Fuelling India's transformation

Tax highlights

• Proposal to comprehensively review

the Income Tax Act in a period of
6 months to make it concise and easy
to understand

• No change in the corporate tax rate

for domestic companies; the base
corporate tax rate for foreign
companies reduced from 40 percent
to 35 percent

• Tax slabs to be revised for individuals

opting for the new regime; overall
savings of INR 17,500 expected and a
standard deduction to be increased to
INR 75,000

• An equalisation levy of 2 percent to be

withdrawn from 1 August 2024

• Consideration on buy-back of shares

to be taxable in the hands of
shareholders from 1 October 2024

• Streamlining the holding period for

classification of assets as long-term or
short-term capital gains and new
capital gains tax rate prescribed from
23 July 2024

• TDS rates for specified payments to be

rationalised; prosecution relaxed for
TDS defaults if payment is made
within the specified timeline

© 2024 Deloitte Touche Tohmatsu India LLP.

 • Attempt to reduce disputes backlog –
Direct Tax Vivad se Vishwas Scheme,
2024 proposed; rationalisation of
reassessment proceedings; limit for
filing appeals to be increased

• Scope of safe harbour rules to be

expanded and transfer pricing
assessment procedure to be
streamlined

• Securities Transaction Tax on the sale

of options and futures to be increased
to 0.1 percent and 0.02 percent,
respectively

• Deduction to employer for a

contribution towards the pension
scheme increased to 14 percent of
the employee’s salary

Key highlights under the GST law

• A common time limit proposed for
issuing demand notices and orders
from FY25 onwards, irrespective of
fraud or otherwise

• Amendments related to the obligation

to appear for summons to facilitate
the appearance by an authorised
representative

• Amnesty Scheme provisions notified

to provide for a conditional waiver of
interest and penalty in respect of
demands pertaining to FY18 to FY20;
no refund of interest and penalty
already paid

• Enabling provisions to empower the

government to regularise non-levy or
short levy of GST, due to general trade
practice

• ITC of GST paid under reverse charge

can be claimed based on the year in
which the recipient issues the
self-invoice; proposed amendments
to provide the timeline to issue such
self-invoices

• Retrospective amendment proposed

to extend the time limit for claiming
ITC for FY18 to FY21 to returns filed
by 30 November 2021

• Restrictions on ITC for recipients

removed in case tax is paid by supplier
towards demands in cases of fraud,
etc., from FY25 onwards

• Refund, with respect to goods subject

to export duty, restricted irrespective
of whether the said goods are
exported with or without payment
of taxes

• The time limit for filing appeals before

the Appellate Tribunal modified to
avoid the appeals from getting time
barred, on account of the Appellate
Tribunal not coming into operation

• The maximum amount of pre-deposit

for appeals reduced before Appellant
Authority/Appellant Tribunal

© 2024 Deloitte Touche Tohmatsu India LLP.

 Key highlights under the Customs law
• Customs duty structure will be
revamped in the next six months to
ease trade, remove inverted duty
structure and reduce disputes

• The central government will be

empowered to specify certain
manufacturing and other operations
in relation to a class of goods that
shall not be permitted in a warehouse
under the MOOWR scheme

• Exemption from GST compensation

cess granted with retrospective effect
from 1 July 2017 for goods imported
by a unit or developer into a SEZ for
authorised operations

• Acceptance of different types of proof

of origin provided in trade agreements
will be enabled to align with new trade
agreements that provide for
self-certification

• As a trade facilitation measure, the

period of repair of aircraft/ships under
the MRO scheme extended from 6
months to 1 year

• Time limit for re-importing goods

without payment of duty for repairs
under warranty extended from
3 years to 5 years

• Basic Customs duty reduced to

15 percent on mobile phones, PCBA
for mobiles and mobile chargers

• To support the energy transition, list

of exempt capital goods will be used
in manufacturing solar panels and
cells expanded

• A review undertaken with respect to

188 conditional exemptions/
concessional rates out of which:
- 30 exemptions/concessional rates
extended up to 31 March 2029
- 126 exemptions/concessional rates
continued up to 31 March 2026
- 28 exemptions/concessional rates
lapsed on their end dates of 30
September 2024
- 4 exemptions for which end dates
removed

© 2024 Deloitte Touche Tohmatsu India LLP.