How the Union Budget 2024 Will Impact Your Spending

The Union Budget of 2024, presented by Finance Minister Nirmala Sitharaman, brought forth changes in customs duties and tax structures that will impact the prices of various goods and services. 

She announced substantial reductions in customs duties on items such as gold, silver, and platinum. The number of customs duty rates was reduced in 2022-23, and plans are in place to streamline them further following a review over the next six months. Key changes include lower duties on mobiles, cancer drugs, and certain minerals, while telecom equipment and plastic products will become more expensive.

This article aims to clearly explain how the budget has affected your wallet by outlining what has become cheaper and what has become costlier.

Relief for Consumers in the Union Budget ’24

The budget offered some welcome news for consumers looking for a break. Here’s a breakdown of some key items that will see a price reduction:

• Mobile Phones and Accessories: Union Budget 2024 reduced the basic customs duty on mobile phones and their chargers to 15%. This could decrease the final retail price of these devices, making them more affordable for a wider range of consumers.
• Precious Metals: The budget slashed customs duties on precious metals, making them more accessible. Gold and silver duties were brought down to 6%, while platinum saw a reduction to 6.4%. This move is expected to stimulate demand in the gems and jewelry sector.
• Healthcare: In a move to improve access to essential healthcare, the government exempted three vital cancer treatment medicines from basic customs duty. This will decrease their prices, making them more affordable for patients.
• Seafood: Consumers looking for protein-rich options can rejoice. The union budget reduced customs duty on fish, shrimp, and fish feed to 5%. This decrease is likely to lower the prices of these seafood products.
• Essential Materials: The union budget aimed to boost domestic manufacturing by reducing or eliminating customs duties on essential materials. This includes ferro nickel, blister copper, and a list of critical minerals used in solar panel production. 
• Leather Goods: Customs duty on leather goods has also been reduced, making leather products like bags, wallets, and apparel more affordable.
• E-commerce: The TDS on e-commerce transactions has been reduced from 1% to 0.1%, which could lower consumers’ online shopping costs.

Items that have become cheaper:

Product	Change after Budget ’24
Mobile Phones	Duty reduced to 15%
Precious Metals	Custom duty reduced to 6%
Cancer Drugs	Three Drugs exempted from basic customs duty
Minerals	Basis customs duty removed on ferro nickel and blister copper
Essential Goods	Exempted capital goods list for solar panels expanded
Seafood	Customs duty on shrimps and fish feed reduced to 5%
Leather Goods	Custom duty reduced
Medical Equipments	Duty reduced on X-ray machines used for medical, sucgical and dental use

Areas Witnessing Price Increases in Union Budget

While the budget offered relief in some areas, there are a few categories that might see a rise in prices:

• Plastic Products: To discourage the use of plastic and promote eco-friendly alternatives, the government has increased the customs duty on plastic products and related goods. This could lead to manufacturers passing on the increased cost to consumers. The customs duty on non-biodegradable plastic products has been increased to 25%.
• Telecom Equipment: This year’s union budget proposes hiking the basic customs duty on telecom equipment from 10% to 15%. This might impact the pricing of certain telecommunication services or equipment.
• Other Miscellaneous Items: Customs duty has been targeted at specific items like ammonium nitrate (up 10%) and certain laboratory chemicals. While the impact on the average consumer might be minimal, it’s important to be aware of these changes.

The new tax regime will increase the standard deduction for salaried employees and expand capital gains exemptions for specific assets. This means –

• Increased Standard Deduction for Salaried Employees: The standard deduction is a fixed amount that can be subtracted from an employee’s total income before calculating their tax liability. By raising this deduction, the regime will allow salaried employees to reduce their taxable income by a larger amount. This results in lower taxable income and potentially reduces the tax they must pay.
• Raised Capital Gains Exemptions for Some Assets: Capital gains are profits from selling assets like stocks, bonds, or real estate. The new tax regime will increase the exemptions on these gains for certain assets, meaning that more of the profit from selling these assets will not be taxed. This encourages investment by allowing investors to keep a larger portion of their profits.
• Understanding the Impact: It is important to note that the final price consumers pay depends on various factors beyond customs duty, such as transportation costs, retailer profit margins, and local taxes. While the budget has reduced duties on certain items, the actual decrease in the final price at the retail level might take some time to reflect.
• Staying Informed: The Union Budget 2024 has introduced a mixed bag for consumers. The exact impact of these changes on the final price points of various goods and services will depend on various factors, including how manufacturers and retailers adjust their pricing strategies. It’s advisable to stay informed by comparing prices across different vendors before purchasing. You can also consult government websites or financial news outlets for further details on the changes implemented through the Union Budget 24.

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