The Interim Budget 2024-25, presented by Finance Minister Nirmala Sitharaman on February 1, 2024, has several implications for individual investors. In this blog post, we’ll guide you with the key highlights from the budget speech for better investment decisions. Which will empower you to seize the moment and make informed and strategic investment decisions that align with your financial objectives.
Economic Outlook:
The government highlighted a robust economic performance, with a focus on Governance, Development, and Performance (GDP). This is crucial for investors as a stable and growing economy often translates to positive investment outcomes.
Infrastructure Development:
An increased focus on infrastructure development, including railways, aviation, and metro systems, can open up new investment avenues. The expansion of these sectors not only enhances connectivity but also presents opportunities for investors. This government has proposed to increase the budget for infrastructure development by 11.1% to 3.4% of the GDP.
Green Energy Initiatives:
With a commitment to achieving ‘net-zero’ by 2070, the budget emphasizes measures like offshore wind energy, coal gasification, and mandatory blending of compressed biogas. Investors keen on sustainable and green initiatives should keep a close eye on developments in the renewable energy sector.
Technology and Innovation:
The government acknowledges that new technologies are not only changing lives but also enabling new economic opportunities and facilitating the provision of high-quality services at affordable prices. A significant move is the establishment of a corpus of ₹1 lakh crore with a fifty-year interest-free loan to encourage research and innovation. This can pave the way for opportunities in tech-driven industries, offering a glimpse into the future of investment landscapes.
Direct and Indirect Tax Proposals:
The government proposed the continuity of the same tax rates for direct and indirect taxes. With this, individuals having earnings up to Rs.7 lakh a year can continue to avail of tax exemption under the new regime. It also highlighted the extension of certain tax benefits till March 2025 for start-ups and investments made by sovereign wealth or pension. Under the current regime, section 10(23FE) of the Income Tax Act provides an exemption to sovereign wealth funds and pension funds (specified fund) on their income like dividends, interest, and long-term capital gains arising from investment in infrastructure in India made between 01.04.2020 and 31.03.2024 subject to fulfilment of certain conditions. The extension of tax benefits aims to provide stability and predictability for investors.
Withdrawal of Outstanding Tax Demands:
The announcement to withdraw outstanding direct tax demands up to ₹25,000 for the period up to 2009-10 and up to ₹10,000 for 2010-11 to 2014-15 is a relief for many taxpayers. The relief is significant for taxpayers, offering a resolution to long-standing concerns and potential anxiety related to outstanding tax matters.
Healthcare and Pharma:
The budget touches upon healthcare, with initiatives like the encouragement of vaccination, setting up more medical colleges, and comprehensive programs for maternal and child care. The budget also extends the healthcare coverage under the Ayushman Bharat scheme to include ASHA workers, Anganwadi Workers, and Helpers. For investors, these initiatives signal potential opportunities in the healthcare and pharmaceutical sectors, driven by increased government focus and spending in these areas.
Real Estate:
The introduction of a scheme to help sections of the middle class buy or build their own houses can have implications for the real estate sector. This is likely to offer more business opportunities to the construction material sector. Investors eyeing the real estate market should pay attention to potential shifts in demand and pricing.
Conclusion
As an individual investor, staying informed about the budget’s nuances is crucial for making sound financial decisions. The 2024 budget, with its emphasis on sustainable development, innovation, and economic growth, presents a myriad of opportunities for investors willing to navigate the evolving landscape. Keep a watchful eye on these developments and consider consulting with financial experts for personalized investment advice tailored to your financial goals.
