Nirmala Sitharaman to deliver speech on Finance Bill tonight before it is passed in Lok Sabha

New Delhi (India), August 7 (ANI): Union Finance Minister Nirmala Sitharaman is scheduled to respond to the discussion on the Finance Bill in the Lok Sabha later today. She is likely to deliver her speech around 4 pm.

The Lok Sabha began discussion on the Finance Bill after the House of Representatives on Monday passed the Central Government Expenditure Bill for 2024-25.

The adoption of the Finance Bill by Parliament will conclude the budget process.

While presenting the Union Budget for 2024-25, Union Finance Minister Nirmala Sitharaman on July 23 set a fiscal deficit target of 4.9 per cent of gross domestic product (GDP). The government aims to bring the fiscal deficit below 4.5 per cent of GDP by fiscal year 2025-26. The difference between the government’s total revenue and total expenditure is known as fiscal deficit.

The central government has kept capital expenditure at Rs 11.11 lakh crore for 2024-25, Union Finance Minister Nirmala Sitharaman announced in her interim budget ahead of the general elections. Capital expenditure, or capex, is used to create long-term physical or fixed assets. During 2024-25, capex rose by 11.11 per cent.

One aspect that always catches the eye in a budget is what has become cheaper and what has become more expensive. Finance Minister Nirmala Sitharaman, as part of her budget presentation, had proposed a number of amendments in the Basic Customs Duty (BCD) for various products or items that are critical to production. The cut would reduce the cost of various commonly used items for many.

After this budget, imported gold, silver, leather goods and seafood became cheaper as tariffs on them were consistently cut. The cut in gold tariffs would boost retail demand and help curb smuggling in the world’s second-largest bullion market.

It also proposed a complete exemption from customs duties on 25 key minerals and a reduction in basic customs duties on two of them.

Explaining the rationale behind the changes in indirect taxes, Sitharaman said her proposals on customs duties are aimed at supporting domestic manufacturing, increasing local value addition, promoting export competitiveness and simplifying taxation, while keeping the interests of the general public and consumers at the forefront.

Moreover, in a move that comes as a setback for stock market investors, Finance Minister Nirmala Sitharaman in her budget speech announced a hike in capital gains tax on both long-term and short-term capital gains. As per the definition, any gain or profit that arises from the sale of a “capital asset” is a capital gain.

Sitharaman announced that short-term capital gains on “specified” financial assets will now be subject to tax at 20 percent instead of 15 percent. While all other financial assets and non-financial assets will continue to be subject to the “applicable rate of tax.”

Long-term gains on all financial and non-financial assets will be taxed at 12.5% ​​instead of 10.0%.

On the positive side, for the benefit of lower and middle income classes, it has been proposed to increase the tax exemption limit on capital gains on certain listed financial assets from Rs 1 lakh to Rs 1.25 lakh per annum.

Listed financial assets held for more than one year are classified as long-term, while unlisted financial assets and all non-financial assets must be held for at least two years to be classified as long-term.

Recently, the Minister of Finance proposed an amendment to the Finance Bill aimed at providing significant relief from capital gains tax on real estate transactions.

The proposed amendment means that taxpayers on real estate transactions can avail either a lower tax rate of 12.5 per cent without indexation or a higher rate of 20 per cent with indexation if the property is acquired before July 23, 2024, the date the union budget is presented in the Lok Sabha.

Taxpayers can calculate taxes under both schemes and will have the choice of whether to pay taxes under the scheme with the lower amount.

July 23, 2024 has been set as the cut-off date for calculating capital gains, as opposed to the previous cut-off date in 2001, which had raised much concern and sparked debate about its impact on long-time owners of real estate assets.

Moreover, to strengthen India’s startup ecosystem, encourage entrepreneurial spirit and support innovation, Finance Minister Nirmala Sitharaman in her budget speech proposed to abolish the so-called ‘business angel tax’ for all types of investors.

This has been the industry’s proposal for a long time, and this announcement will drive investment, especially in startups. Startups act as engines of economic growth, playing a key role in generating new jobs, ideas, products, and services.

By definition, angel tax is an income tax levied by the government on funds raised by unlisted companies or start-ups if their valuation exceeds the company’s fair market value.

On July 23, Sitharaman presented the state budget for fiscal 2024 in Parliament, marking her seventh budget in a row and breaking the record of the late Moraji Desai, who presented six consecutive budgets.

The interim budget, presented on February 1, took into account the financial requirements for the interim period until the government was formed after the Lok Sabha elections, after which the new government was to present a full budget.

The budget session of Parliament began on 22 July and is scheduled to end on 12 August.

India is poised to remain the world’s fastest-growing economy in 2024-25, Chief Economic Advisor V Anantha Nageswaran told a news conference after the launch of the Economic Survey on July 22. The Economic Survey had cautiously forecast India’s economic growth at 6.5-7.0 per cent in 2024-25. (ANI)