The Union Budget for FY25 brought some major reforms to the table. From the abolishment of Angel Tax to the allocation of Rs 2 lakh crore for skill enhancement programs, check out the top highlights of this year's budget
Nirmala Sitharaman presented her first budget under Modi government's third tenure on Tuesday. To much surprise, the budget for FY25 was full of bombshells for various sectors. From modifications in taxation to providing special support to kingmaker's states, Andhra Pradesh and Bihar, this year's budget brought some major reforms to the table.
Here are the top five highlights of the Union Budget for FY25.
1. Employment and Skill Programmes
Employment has always been a top priority in Budget sessions. However, this marked the first time when the focus was centered around young entrants in the job market. In the budget speech, Nirmala Sitharaman announced the launch of three schemes for new entrants.
Under these schemes, new employees will receive a one-month wage in three instalments, up to Rs 15,000, benefiting nearly 210 lakh youth. One of the schemes particularly targets first-time entrants and offers incentives to both employees and employers regarding EPFO contributions within "specified scales for the first four years."
To support employers, the government will also reimburse their EPFO contributions up to Rs 3,000 per month for two years for all new hires. This scheme is expected to generate around 50 lakh new jobs.
2. Special Support for Andhra Pradesh and Bihar
The kingmaker's states also received a major boost. While Andhra Pradesh was provided with a special financial support of Rs 15,000 crore via multilateral agencies for the development of its capital city, Amaravati, Nitish Kumar also managed to get a massive package for his state.
FM Nirmala Sitharaman proposed an allocation of Rs 26,000 crore for highway construction in Bihar, alongside the acceleration of the state government's requests for multilateral loans.
3. Abolition of Angel Tax
The much-talked-about 'Angel Tax' in the start-up space was eliminated under the new budget. The tax has long been a debated topic among industry players and the start-up ecosystem, which has been hit by funding winter.
Angel tax is a levy imposed on the excess capital received by an unlisted company over the fair market value of its shares.
4. Increase in Capital Gains Tax
For investors, the recent budget was probably a major bombshell as the government announced an increase in the capital gains tax. The tax rate on long-term capital gains (LTCG) increased from 10 per cent to 12.5 per cent. As for short-term capital gains (STCG), the tax rate was increased from 15 per cent to 20 per cent (on certain asset classes).
"Short term gains on certain financial assets shall henceforth attract a tax rate of 20 per cent, while that on all other financial assets and all non-financial assets shall continue to attract the applicable tax rate," Nirmala Sitharaman said.
5. Rise in Standard Deduction
A major focus of this year's budget was put on simplifying the tax base alongside bringing clarity in the same.
FM Nirmala Sitharaman announced an increase in standard deduction from Rs 50,000 to Rs 75,000, under the new tax regime. The same will remain unchanged under the old tax regime. For family pensioners, the deductions will rise to Rs 25,000 from Rs 15,000 under the new regime.