The NDA-led union government announced the general budget for 2024 on Tuesday, under the leadership of Finance Minister Nirmala Sitharaman. Despite its criticisms and drawbacks, there have been many progressive changes for salaried employees, businesses, and consumers compared to previous budgets. The focus has been on incentivizing imports by making them cheaper. As consumers, cheaper imports are a positive sign as it reduces the prices of goods and services.
The first budget after the NDA swept the 2024 elections impacts various sectors and industries in the country. The revised tax slabs are an indication that the government wants people to spend more on consumer goods. Reduction in import duties on important electronic parts and precious metals will only make them more accessible to the common man. Let us understand how the budget impacts the cost of goods and what are the top 5 things getting costlier and cheaper after today.
How Does The Budget Affect the Prices of Goods?
During the union budget this year, a significant reduction in import duties was considered to encourage more imports. Import duty is a type of tax levied on goods bought from other countries. As the import duty goes down, more exporters are encouraged to sell their goods in India. It also reduces the cost of goods and makes it affordable for everyone.
A sharp cut in import duties on gold and silver- from 15% to 6% was announced by the government. The Gold & Silver BCD (Basic Customs Duty) was reduced to 5% from 10%. This will effectively reduce the overall tax on gold from 18.5% to 9%, including GST. Precious metals serve as an important investment option in Indian households.
The Equalisation levy of 2% payable on profits of digital companies (like Netflix and Amazon) is also slashed, hoping to make online sales of digital goods and services more affordable. Additionally, reducing the TDS (Tax deducted at source) on payments made to e-commerce operators from 1% to 0.1% will encourage more online transactions. Both these decisions will streamline taxation in the e-commerce sector and foster the already booming digital economy.
How Does The Budget Affect Your Purchasing Power?
The 2024 union budget also made provisions for salaried employees and businesses by introducing new tax slabs. The new Income Tax slab has made any salaried income up to 3 Lakh tax exempt, up from 2.5 Lakh previously. Also, the 5% tax slab now includes salaried individuals who earn up to 7 Lakh per annum, which was only 5 Lakhs before. This comes as a major relief for the majority of Indian salaried employees who earn less than 7 Lakh rupees.
Additionally, the standard deduction has been hiked by 50%, up 75000 rupees from 50000. All these changes increase the purchasing power of buyers as their tax liability reduces. With residual income in hand, the demand for goods and services will increase within the country.
List of Goods That Will Get Cheaper After Budget 2024
Reduction of import duties on precious metals will make jewelry cheaper.
Basic Customs Duty on mobile phones has been reduced to 15% from 20%. This will make mobiles and chargers cheaper in India.
Customs duty on the manufacturing of shoes and apparel made from leather has been reduced. This will make premium and budget segment shoes cheaper. Local brands will be incentivized to provide high-quality clothing at affordable prices.
The government has exempted 25 critical minerals like lithium, cobalt, and copper to boost the manufacturing of semiconductors and high-end electronics, hoping to bring down their prices. Import of electronic parts and minerals at lower rates will benefit domestic consumers, as well as, businesses.
Imported seafood, fish feed, and shrimp will get cheaper as basic customs duty has been cut to 5%.
This is a great opportunity to shop for mobile phones, apparel, and high-end electronics as the prices drop. On Mouthshut, you will find comprehensive reviews of all products in the electronics and fashion category to help you choose the best. Compare multiple products, check their prices, and read user reviews to be an informed buyer.
List of Goods That Will Get Costlier After Budget 2024
Luxury items like watches and handbags will be levied a 1% TCS (Tax collected at source).
- High-end Entertainment Systems
Expensive televisions costing more than 10 Lakhs and home entertainment systems by brands like LG and Samsung.
While mobile phones and accessories might get cheaper, an increase in duty on telecom equipment will make the services costlier.
Customs duty on plastic products will encourage the adoption of alternative and sustainable materials, but increase the price of plastic goods.
Customs duty on certain laboratory chemicals has seen a steep hike of 150% from 10% which will increase the R&D costs.