During the Monsoon Session of Parliament on Tuesday, Finance Minister Nirmala Sitharaman presented the Union Budget 2024–25. Breaking the record set by former prime minister Morarji Desai, who presented six consecutive budgets as finance minister between 1959 and 1964, Nirmala Sitharaman became the first finance minister to make seven consecutive budget addresses.
Nirmala Sitharaman presented her seventh budget, setting forward several priorities for stimulating economic growth and generating enough possibilities. These included employment and skill development, productivity and resilience in agriculture, and services.
At the Parliamentary Budget Presentation, Sitharaman said, “India’s economic growth continues to be the shining exception (in a world where policy uncertainties are pervasive) and will remain so in the years ahead.” “In this budget, we particularly focus on employment, skilling, MSMEs, and the middle class.”
Here, we examine the Union Budget 2024–25 initiatives targeted at salaried individuals and job seekers.
Increase in the standard deduction
According to Finance Minister Nirmala Sitharaman’s announcement in the budget, the standard deduction for salaried employees under the new income tax regime will rise from 50,000 to 75,000 by 50%.
The term “standard deduction” describes a fixed amount withheld from an employee’s annual salary before determining the applicable income tax rate.
Interestingly, there has been no announcement addressing the standard deduction under the previous tax system.
Brand-new income tax brackets
Nirmala Sitharaman also announced a relaxation of the income tax slabs under the new tax regime for the current fiscal year in her address announcing the budget.
The following are the newly declared income tax slabs:
For up to ₹3 lakh: 0%
5% of ₹3 to ₹7 lakh
10% of ₹7 lakh to ₹10 lakh
15% of ₹10 lakh to ₹12 lakh
20% of ₹12 lakh to ₹15 lakh
Above ₹15 lakh: thirty per cent
She declared, “A salaried employee in the new tax regime stands to save up to ₹17,500/- in income tax as a result of these changes.”
An increase in the family pension tax deduction:
Sitharaman also unveiled a proposal to boost the family pension deduction cap to improve the financial security of both seniors and salaried workers.
Under the new tax regime, the deduction amount is scheduled to be raised from ₹15,000 to ₹25,000.
The finance minister said that the deduction on family pension for pensioners would be increased from ₹15,000 to ₹25,000. He added that this would help about 4 crore salaried people and pensioners.
A month’s salary for all new employees in the formal sector:
Additionally, Nirmala Sitharaman declared that all those who are new to the workforce in all formal sectors will receive a one-month wage from the government. According to the finance minister, the government will give the employees their provident fund contribution directly.
“…one month’s salary to everyone starting work in any formal sector.” A direct benefit transfer of up to ₹15,000 in three instalments of one month’s salary would be given to first-time employees who are registered with the EPFO. A monthly salary of ₹1 lakh will be the upper limit for eligibility. During the Budget presentation, the Finance Minister stated that 210 lakh youth would benefit from the initiative.
The prime minister’s jobs and skill-building package included a few announcements:
The government also declared that incentives will be given directly to companies and employees based on their EPFO contributions during the first four years of employment, in addition to the direct benefit transfer. Additionally, it was announced that for every extra employee, employers will receive reimbursement of up to ₹3,000 per month for two years towards their EPFO contribution.
Top 500 company internships:
In addition, the finance minister announced during her Tuesday budget statement that the government will start a youth internship programme at 500 of the best corporations.
According to Sitharaman, the program will serve 10 million youth over five years.
In addition, trainees will get a one-time payment of ₹6,000 as well as a monthly internship allowance of ₹5,000.
“Our government will launch a comprehensive scheme to provide internship opportunities in 500 top companies to 1 crore youth in 5 years as the 5th scheme under the Prime Minister’s package.” She stated in Parliament that “they will be exposed for a full year to a variety of professions, real-world business environments, and employment opportunities.”
“…Companies will be required to use 10% of their CSR funds to cover the cost of the internship and the training,” she continued.