Questions and Answers
What is the effective corporate tax rate for foreign companies after the recent reduction?
Which expenditure category receives the highest allocation in the budget?
Which of the following benefits has been increased for pensioners?
What percentage of revenue comes from corporation tax in the overall budget?
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What was the standard deduction for salaried employees increased to?
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Which caste category focuses on improving the conditions of farmers in the Budget for 2024-2025?
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What is one of the primary themes of the Budget for 2024-2025?
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Which priority aims at enhancing productivity and resilience in agriculture?
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Which of the following groups is NOT one of the major focus castes in the Budget for 2024-2025?
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What is one of the objectives related to agriculture in the Budget for 2024-2025?
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Study Notes
Employment Reforms
- Introduction of a simpler tax regime aimed at enhancing the operations of domestic cruise services.
- Safe harbour rates established for foreign mining companies involved in selling raw diamonds.
- Corporate tax rate for foreign entities reduced from 40% to 35%.
Simplified Tax Structure
- Standard Deduction for salaried employees raised from ₹50,000 to ₹75,000.
- Deduction on family pension for pensioners increased from ₹15,000 to ₹25,000.
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New tax savings brackets:
- 0-₹3 lakh: Nil
- ₹3-₹7 lakh: 5%
- ₹7-₹10 lakh: 10%
- ₹10-₹12 lakh: 15%
- ₹12-₹15 lakh: 20%
-
₹15 lakh: 30%
Revenue Sources
- Income Tax contributes 19% to total revenue.
- Borrowing and other liabilities account for 27%.
- Corporation Tax comprises 17% of revenue.
- GST and other taxes constitute 18% of total receipts.
- Union Excise Duties contribute 5%, while Customs account for 4%.
Expenditure Distribution
- Key expenditure allocations include:
- Defence: ₹4,54,773 crore
- Ministry of Road Transport: ₹2,65,808 crore
- Agriculture: ₹1,51,851 crore
- Education: ₹1,25,638 crore
- Health: ₹89,287 crore
Major Scheme Allocations
- MGNREGA receives prominence with allocations of ₹86,000 crore for 2023-24.
- Research and Development projects allotted ₹1,200 crore for 2023-24.
- Nuclear Power Projects are set for ₹2,228 crore and Pharmaceutical PLI at ₹2,143 crore.
Economic Outlook
- India projected a growth of 8.2% for FY 2024.
- Current Account Deficit improvements recorded year-on-year.
- Expansionary PMI index indicates positive growth trends within manufacturing and services.
- Gradual decline in Gross NPAs of Scheduled Commercial Banks, reflecting effective financial health.
Roadmap for 'Viksit Bharat'
- Focused efforts on four primary demographics: the poor, farmers, women, and youth.
- Key budget themes include Employment, Skilling, support for MSMEs, and bolstering Middle Class economic stability.
Budget Overview
- Revenue Receipts show significant increases planned from ₹16.9 lakh crore (actuals) in 2022-23 to projected figures for 2023-24 and beyond.
- Capital Receipts are similarly poised for growth, with notable increments anticipated across fiscal years.
- Revenue Expenditure reflects careful assessments to ensure fiscal discipline consistent with growth forecasts.### Fiscal Indicators
- Decreasing fiscal deficit as a percentage of GDP observed from FY21 to FY24.
- Fiscal deficit expected to reduce from 10% in FY21 to 6.4% in FY24.
- 5.6% and 5.5% noted in FY23 and FY24 respectively, indicating ongoing recovery.
Taxation Reforms
- Review and simplification of Income Tax Act 1961 aimed at reducing litigation and appeal issues.
- Sector-specific changes in customs duties proposed to increase trade efficiency and lower disputes.
Customs Duty Changes
- Additional cancer medicines fully exempted from customs duties, promoting affordable healthcare.
- Reduction of Basic Customs Duty (BCD) to 15% for mobile phones and components to enhance mobile industry growth.
- Custom duty on gold and silver reduced to 6%, and platinum to 6.4%, encouraging domestic value addition.
- BCD on shrimp and fish feed lowered to 5%, supporting marine exports competitiveness.
- Exemption of customs duties on capital goods for solar cell and panel manufacturing, aiding energy transition.
- External tariffs on 25 critical minerals exempted to boost strategic sector development.
Direct Tax Proposals
- Compliance burden aimed to be reduced through rationalization efforts.
- Short-term gains on financial assets to be taxed at a rate of 20%; long-term gains at 12.5%.
- Annual exemption limit for capital gains on financial assets increased to ₹1.25 lakh.
- Abolition of ANGEL tax for all investors to foster entrepreneurial activity and investment.
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Description
Explore the impact of recent changes in tax policies related to employment and investment. This quiz covers a simpler tax regime for domestic cruises, safe harbour rates for foreign mining companies, and reductions in corporate tax rates for foreign entities. Test your understanding of these key fiscal measures.
