Finance Minister Nirmala Sitharaman presented her seventh straight Budget, the first of the NDA government’s third term, with a focus on job development, youth skilling, and the middle class. In her one-hour and forty-minute Budget speech, Sitharaman also provided assistance for taxpayers who had chosen the new tax regime, raising the standard deduction from Rs 50,000 to Rs 75,000.
BSE falls 1248.23 points, Nifty falls 409 following Budget release
The markets collapsed shortly following the Budget release. The BSE Sensex fell 1248.23 points, while the Nifty dropped 409 points. However, it recovered later that day.
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Sitharaman makes history by presenting her seventh consecutive Budget
Earlier in the day, Sitharaman, who made history by presenting her seventh consecutive Budget, posed with a tablet wrapped in a ‘bahi khata’-style pouch containing Budget documents before departing for Parliament. Morarji Desai had submitted six consecutive budgets.
Sitharaman stated that the Budget’s nine priorities are productivity, jobs, social justice, urban development, energy security, infrastructure, and reforms.
Changes to the new tax regime
Finance Minister Nirmala Sitharaman has announced modifications to the new tax regime that will benefit the middle class by raising the standard deduction from Rs 50,000 to Rs 75,000. The new income-tax slabs are:
Up to Rs 3 lakh, the tax is NIL
From Rs 3 lakh to Rs 7 lakh, the tax rate is 5%
From Rs 7 lakh to Rs 10 lakh, the tax rate is 10%
From Rs 10 lakh to Rs 12 lakh, the tax rate is 15%
From Rs 12 lakh to Rs 15 lakh, the tax rate is 20%
Above Rs 15 lakh income, the tax rate is 30%
Sitharaman announced an allocation of Rs 2 lakh crore for job development over the next five years, as well as three employment-related projects. The first scheme provides a direct benefit transfer of one month’s salary in three instalments of up to Rs 15,000 to first-time EPFO employees.
The second scheme will encourage additional employment in the manufacturing sector through the hiring of first-time employees. The third plan reimburses businesses up to $3,000 per month for two years for each extra employee’s EPFO contribution.
