Top 3 things one should check in Budget

The Union Budget is one of India's most significant financial events, serving as the government's annual financial statement that outlines estimated revenue and planned expenditures for the upcoming fiscal year.

1. Fiscal Deficit

The government has shown strong commitment to fiscal discipline, with the fiscal deficit target set at 4.9% of GDP for FY25 and an ambitious goal of 4.5% for FY26. This continues the encouraging downward trend we've seen since the pandemic-induced spike to 9.2% in FY21.

2. Personal Taxation

The Basic Exemption Limit at Rs. 3 lakhs for all taxpayers. Any upwards change in this will be a positive for the stock markets.

For salaried employees, the Standard Deduction which is Rs. 75,000 under the new regime. Any upwards change effectively increases the take-home salary for millions of employees.

The tax rebate of up to Rs. 25,000 available for those with total income not exceeding Rs. 7,00,000. Any upwards change will be a positive for the stock market.

Tax Slabs and Tax Rates, if changed to accommodate more taxpayers in lower tax brackets will be seen as a positive by the stock market.

Capital Gain Tax Rates are STCG of 20% and LTCG of 12.5% (on excess LTCG above Rs. 125,000). Any change downwards in these will be seen as a positive by the markets.

Corporate Taxation

Domestic Companies with gross turnover up to Rs. 400 crore in the previous year are taxed at 25%, while those exceeding this threshold face a 30% rate.

3. Production Linked Incentive (PLI) Schemes

A significant focus is placed on boosting domestic manufacturing through PLI schemes. These initiatives provide financial incentives to companies manufacturing in India, with the triple objectives of:

The reduction in setup and manufacturing costs through these schemes catalyzes production across various sectors, contributing to India's manufacturing prowess.

GST

An interesting point to note is that GST rate changes are not part of the budget discussions. These modifications are instead determined through GST council meetings and announced via press releases. This separation ensures that GST-related decisions receive focused attention through a dedicated framework.