CAPITAL GAINS TAX HIKED, JOBS PRIORITISED; ALLIES REWARDED

Fiscal deficit pegged at 4.9% of GDP Capex pegged at Rs 11.11 lakh crore

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Finance Minister Nirmala Sitharaman presented the Modi 3.0 government’s first Budget on Tuesday, highlighting job creation, income tax relief, and targeted spending in key states. With the BJP grappling with rural distress and high unemployment— factors that led to its loss of a Lok Sabha majority—the Budget aims to address these challenges while securing support from crucial regional allies.

Sitharaman in her seventh straight Budget provided Rs 2.66 lakh crore for rural development and maintained spending on long-term infrastructure projects at Rs 11.11 lakh crore to boost economic growth.

The centrepiece of the over Rs 48 lakh crore Budget are employment, internship and skilling schemes, aimed at creating job avenues for the largest youth population in the world.

“Besides Rs 2 lakh crore provided over a five-year period for schemes and initiatives to facilitate employment, skilling and other opportunities for 4.1 crore youth, I have made a provision of Rs 1.48 lakh crore for education, employment and skilling,” she said.

For the middle class, she raised standard deduction — a flat deduction from total salary earned by an employee in a year before calculating the applicable income tax rate — by 50 per cent to Rs 75,000 and tweaked tax slabs for taxpayers opting for the new income tax regime.

“This will lead to taxpayers under the new tax regime — which offers lower rates of taxes but permits limited deductions and exemptions — saving up to Rs 17,500 in tax annually,” she said.

To make the New Pension Scheme (NPS) more attractive under the new tax regime, Sitharaman proposed to increase tax deductions for employers contribution to 14 per cent from 10 per cent.