Union Budget 2024 Expectations LIVE: Will FM Nirmala Sitharaman Increase Section 80C Deduction Limit? – News18

Budget 2024 Expectations: What Does Equities Market Expect?

The Indian economy is moving on a strong growth trajectory. This makes the government finances comfortable on the revenue side. The budget is expected to maintain the fiscal deficit and borrowing targets same as the February interim budget.

“There could be some positive announcements on allocations towards rural economy. Also, there is a possibility of tax benefits for the lower income brackets. Focus on capital expenditure is also expected to continue with increasing central expenditure, persuading state level capex and also incentivising private capex. Overall, we are likely to see policy continuity,” said Nimesh Chandan, CIO of Bajaj Finserv Asset Management.

Budget 2024 Expectations: Railways, Shipping Shares On Upward Move

Railways’ shares like RVNL, Titagarh Rail, etc and the shipping sector stocks like Shipping Corporation of India and Mazagaon Dockyard, among others, have been on the up move in the stock market for the past few days amid reports that the government is likely to announce measures for these sectors.

Budget 2024: Will Government Increase Section 80C Tax Deduction Limit?

As Finance Minister Nirmala Sitharaman is set to present her 7th Budget, there are various expectations. One of the major expectations is an increase in Section 80C tax deductions.

These deductions are available for old tax regime and offer exclusion on income up to Rs 1.5 lakh from the calculation of tax liability in a year.

Budget Expectations from Wealth Management Sector

“As we approach the 2024 India Budget, we are cautiously optimistic about the potential measures that will be announced. We believe this budget presents a pivotal opportunity to bolster economic growth and investor confidence. We anticipate the government’s focus on stimulating key sectors such as infrastructure, healthcare, and technology, which are critical for long-term sustainable development. An important announcement that we expect is on ESOPs (Employee Stock Ownership Plans). These are employee incentives that companies use to attract, reward, and retain talent. ESOPs also enable employees to become shareholders and benefit from the company’s growth. Most of the new generation companies give part of company stake as ESOPs to senior employees, who work as well as promoters, but end up losing 40% value vis-a-vis promoters who can enjoy long-term capital gains (LTCG) advantage on equity. This situation needs to be rectified to enable them to earn higher margins,” Swati Saxena, founder and CEO, 4Thoughts Finance, a wealth management firm.

Additionally, the re-investment from sale of startups is exempted from tax only for Rs 10 cr investment in real estate. However, there is a need to encourage startup investments and make the sector more appealing. One way could be to enable re-investment in startups to get a boost through a tax exemption. We also see the automotive industry looking forward to some key measures in the upcoming budget, especially with the Faster Adoption and Manufacturing of Electric Vehicle (FAME). Increased support in R&D of the EV sector can also help boost India as a global leader in EV Technology. The budget can also ensure greater sync between Dividend Distribution Tax (DDT), which is very high, and Long-Term Capital gains on equity which is very low. All these measures would prove beneficial to the liquidity availability in the economy and ensure its healthy growth, she added.

Budget 2024 Date: Budget Session of Parliament To Be Held Between July 22 and August 12

Parliament’s Budget Session will be held between July 22 and August 12, and Finance Minister Nirmala Sitharaman will present the Union Budget 2023-25 on July 23. It will be her 7th annual financial statement in a row.

The government will likely present the Economic Survey on July 22. This will be the first full budget of the Modi Govt 3.0.

An interim budget was presented on February 1, 2024, due to the Lok Sabha polls, which were held in April-June.

Nirmala Sitharaman on June 12 took office for her second consecutive term as the minister of finance and corporate affairs.

After taking charge as the finance minister in the Modi 3.0 government, Sitharaman highlighted the objectives and outlined how the 2024 full budget will include various aspects of the Indian economy.

Budget Expectations from Healthcare Sector

“The healthcare sector in India is on the brink of excellence. There is an increased focus on treating unique patient cases, robotic surgeries, and increasing prominence of AI for accurate diagnosis. To reach the next phase, emphasis must be laid on innovation, research & development, and infrastructure development. These are the foundations for India’s health sector to achieve an international standard of treatment for all. Strengthening infrastructure will create a robust healthcare network in rural India, benefiting the entire population. However, affordability remains a challenge in accessing healthcare services and treatments. Public-Private Partnerships (PPPs) can effectively address these challenges by combining the resources of both public and private entities to deliver comprehensive healthcare nationwide. Additionally, the healthcare sector needs programs to provide training at various levels to address the talent shortage. We positively look forward to the Union Budget 2024-25 with the hope that it will address the existing challenges in the healthcare sector,” said Joseph Pasangha, Group COO, SPARSH Hospital, Bengaluru.

Budget Expectations from Real Estate Sector

The real estate sector expects a range of measures from the government in the Union Budget 2024-25, including industry status to the sector and tax reliefs.

Mohit Goel, managing director of Omaxe, said, “We urge the government to consider increasing the deduction limit for interest on home loans from the current Rs 2 lakh to Rs 5 lakh annually, which could dramatically boost housing demand. Additionally, reducing the GST on under-construction properties and adjusting the pricing of raw materials would further stimulate the market. These changes are essential not just for energizing the sector but also for driving demand in approximately 250 related industries.”

Aditya Kushwaha, CEO and director of Axis Ecorp, said, “The real estate sector has flourished in recent years despite challenges such as rising property prices and the highest interest rates in six years. Demand for luxury real estate and second home categories has remained robust. We anticipate that the 2024 Budget will favour homebuyers, supporting the sector’s ongoing growth. The recent focus on affordable housing is expected to continue, especially with FM Nirmala Sitharaman’s interim budget announcement of adding 2 crore more houses to the PMAY-U scheme. A similar emphasis on affordable housing in the upcoming budget would be beneficial.”

Nayan Raheja from Raheja Developers said, “The real estate sector expects the government to ensure by taking certain initiatives at the policy level in its forthcoming budget. Industry status and single-window clearance are long pending demands, and we hope for affirmative action on these. Raising the deduction limit under section 80C for principal repayment of housing loans from the present 150,000 is among other initiatives the sector is hoping for. We are hopeful that the budgetary announcements will further boost the sector’s potential and enhance its share in the country’s economy.”

Ashwinder R Singh, co-chair of CII’s NR Committee on Real Estate, CEO Residential at Bhartiya Urban, and Author, said, “The real estate sector has certain expectations for the 2024-2025 Union Budget. These include increasing the home loan interest rebate to Rs 5 lakh, reducing GST on construction, redefining affordable housing limits, granting industry status, incentivizing sustainable practices, and implementing a single-window clearance system.”

Ankush Kaul, chief business officer of Ambience Group, said, “The Indian real estate sector contributes roughly 8% to GDP and is the second-highest employment generator in the country. Ahead of the Union Budget 2024-25, one of the sector’s primary expectations is granting industry status along with the single-window clearance system. Considering these long-pending demands would give a new push to the sector.”

Budget 2024 Expectations on SEZ Law

Gunjan Prabhakaran, partner & leader (indirect tax) at BDO India, said the market expects the Union Budget 2024-25 to provide clarity on the future of SEZ law (e.g. continuation of present SEZ Act or introduction of proposed DESH bill) especially in the context of the first 100 days plan of MOC with respect to changes in SEZ law (NFE, payment of input taxes rather than Customs duty on DTA supplies by SEZ, etc.) and the steps to generate economies of scale.

Union Budget 2024 Latest Updates: Govt May Relax 45-day Payment Rule for MSMEs in Budget

The government may relax the requirement of making payments to MSMEs within 45 days of buying goods and services to check large corporate from looking at other sourcing avenues, sources said.

The announcement to this effect could be made in the Budget likely to be presented on July 23. The government is considering suggestions regarding changes to Section 43B(h) of the Income Tax Act made by MSMEs during pre-Budget consultations, sources said.

The government in last year’s Budget added a new clause under Section 43B of the Income Tax Act to address the challenge of delayed payments faced by MSMEs in the country.

According to Section 43B(h) of the Income Tax Act, introduced through the Finance Act 2023, if a larger company does not pay an MSME on time — within 45 days in case of written agreements — it cannot deduct that expense from its taxable income, leading to potentially higher taxes.

Union Budget 2024 Latest Updates: Govt May Introduce Amendments to Laws to Push Banking Sector Reforms

The government is likely to introduce amendments to Banking Regulation Act 1949 and other laws to push banking sector reforms during the upcoming Budget session.

Apart from this, amendments in the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970, and the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980 are needed for privatisation of public sector banks, sources told PTI.

These Acts led to the nationalisation of banks in two phases and provisions of these laws have to be changed for the privatisation of banks, they said. Amendments, if approved by Parliament, would help bring down government holding in state-owned banks below 51 per cent, improve bank governance and enhance investors’ protection, sources said.

USISPF Urges FM Sitharaman for Stable, Predictable Tax Environment

The US-India Strategic Partnership Forum has urged Union Finance Minister Nirmala Sitharaman to ensure a stable and predictable tax environment as she prepares for her annual budget later this month.

The US-India Tax Forum, a dedicated Tax Policy Forum of the US-India Strategic Partnership Forum (USISPF), said this in a set of recommendations to Sitharaman.

In a press release by USISPF, the tax forum said that a stable and predictable tax environment is imperative to boost investment sentiment across sectors.

“The industry eagerly anticipates the Union Budget 2024-25, the first budget of the re-elected Government, which is expected to introduce measures that will stimulate growth across sectors,” it said.