Middle Class FOOLED Once Again | Budget 2024 | Dhruv Rathee
In this video, we explore the 2024-25 budget highlights presented by Finance Minister Nirmala Sitharaman, focusing on agriculture, housing, small business support, and the space sector. We dive into the changes in Short-Term and Long-Term Capital Gains taxes, new income tax slabs, and employment schemes. We also discuss key insights from the Economic Survey, including GDP growth projections, inflation, and fiscal deficit. Additionally, we cover sector-specific allocations for agriculture, tribal welfare, rural development, MSMEs, and changes in customs duties on various goods. Join us as we break down these important topics and what they mean for the economy and you.
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00:00Even the biggest Modi supporter started expressing his anger against the government.
00:05It seems that the government collects all the taxes from middle class people
00:09and only benefits are given to their millionaires and billionaires friends.
00:14Look at this article friends.
00:15Such a bad state of income inequality was not even in the time of British rule.
00:19Namaskar friends.
00:20On July 27, Finance Minister Nirmala Sitharaman presented Budget 2024.
00:26And the negative reaction that was seen from the public regarding this budget was of a different level.
00:32Even the biggest Modi supporter started expressing his anger against the government.
00:36Look at these tweets.
00:37Those who were saying till 17th June that we have to see dictator Modi.
00:41By the time of 23rd July they started saying,
00:43Please don't treat us like beggars.
00:46Those who were saying till 9th June,
00:47Now I can die peacefully.
00:49By the time of 23rd July they started saying,
00:51Worst government I have seen in terms of tax issues.
00:54Comedian Abhijit Ganguly's tweet went viral.
00:56If I earn money, Nirmala takes tax.
00:58If I spend money, then also Nirmala takes tax.
01:01If I don't earn or spend both and my money is just lying in investment,
01:05Nirmala also takes tax.
01:07And the best thing is that if I give tax,
01:09there is also additional cess on it,
01:11so Nirmala also takes another tax on it.
01:14These memes also went viral on the Finance Minister.
01:16You can't defeat me.
01:18I know, but she can.
01:19While representing this logic, this flowchart also went viral.
01:23Whatever salary you get, you pay 30% direct tax on it.
01:26If you invest the remaining money,
01:29and if you earn money quickly in investment,
01:32then you pay 20% tax.
01:34If you earn money slowly, then 12.5% tax.
01:37And if it is your loss, then it is your loss.
01:39Secondly, if you go to spend your money,
01:41then according to GST,
01:43you pay 12% tax on basic items,
01:4618% tax on kind of fancy items,
01:49and 28% tax on luxury items.
01:51The question here is,
01:53is this budget really so bad?
01:55Come, in today's video, friends,
01:57let's understand it in depth.
02:06Let's start with the thing
02:08that is being criticized the most.
02:10Capital Gains Tax.
02:12This tax is applied when you sell your asset,
02:15like a house or land,
02:17or when you make a profit from your investment.
02:20Like when you invest in the stock market
02:22or mutual funds.
02:24Capital Gains Tax is divided into two parts.
02:27If you are buying and selling something
02:29in a period of less than a year,
02:31then it is called Short-Term.
02:33And the tax that is applied then,
02:35is called Short-Term Capital Gains Tax.
02:37In short, it is called STCG.
02:39But if you keep your investments
02:41for more than a year,
02:43then it is called Long-Term period.
02:45And in such cases,
02:47Long-Term Capital Gains Tax is applied.
02:49LTCG.
02:50In this new budget, what has the government done?
02:52Both these taxes have been increased.
02:54Short-Term Capital Gains Tax has been increased
02:56by 5%.
02:57Earlier, it used to be 15%.
02:59Now, it has been increased by 20%.
03:01And Long-Term Capital Gains Tax has been increased
03:03by 2.5%.
03:04Earlier, it used to be 10%.
03:06Now, it is 12.5%.
03:08But in this case, the government has increased the exemption.
03:10Earlier, there was an exemption of 1 lakh.
03:12Now, there is an exemption of 1.25 lakh.
03:15Meaning, in a year,
03:17if your profit is less than 1.25 lakh,
03:19then you don't have to pay this tax.
03:21Now, obviously, people who invest
03:23their money in the stock market and mutual funds,
03:25they are angry with the government.
03:27Because for them, it is a direct loss.
03:29Apart from this, people who trade in futures
03:31and options, they also have bad news.
03:33A Securities Transaction Tax is applied
03:35for their trading.
03:37Earlier, this tax used to be on futures.
03:390.0125% of the transaction value.
03:42Now, it has been increased to 0.02%.
03:44Earlier, it used to be on options.
03:460.0625% of the option premium.
03:49Now, it has been increased to 0.1% of the option premium.
03:53But if we look at it from the perspective of the government,
03:56then what can be the justification
03:58for increasing all these taxes?
04:00The answer to this is hidden, friends.
04:02Maybe in the Economic Survey of 2023-2024.
04:04If you don't know the Economic Survey,
04:06it is an annual report.
04:08It is presented every year before the budget.
04:10And it is made by the Economics Division
04:12of the Department of Economic Affairs
04:14under the guidance of India's Chief Economic Advisor.
04:17Finance Minister Nirmala Sitharaman
04:19on 22nd July, one day before the budget,
04:21presented this Economic Survey to the Parliament.
04:24If you look at page 65 of this survey,
04:26it is written,
04:28If equity market claims on the real economy
04:30are excessively high,
04:31it is a harbinger of market instability
04:33rather than market resilience.
04:35In simple words, they say
04:37that the stock market is in a bubble.
04:39And if the market claims are very high,
04:41it is a harbinger of market instability.
04:43It's amazing, friends,
04:45that whenever the government was criticized
04:47on issues like economy, unemployment,
04:49and inflation,
04:50they used to say,
04:51Look at the stock market.
04:53The stock market is going up.
04:55If the stock market is going up,
04:56then there is development in the country.
04:58But now it is being said
04:59that the stock market going up
05:01is not an indicator.
05:02If the stock market is going up too much,
05:04then it can be a harbinger of market instability.
05:06Clearly, the government wants to discourage this.
05:09Especially futures and options trading,
05:11which in my opinion is a very risky thing.
05:13A lot of people who don't understand this properly,
05:16they put a loss of lakhs of rupees
05:18of their life savings
05:19due to greed for money.
05:21One very interesting thing
05:22that we saw in this budget
05:23is that the government in its economic survey
05:25has talked in detail about the problem of unemployment
05:28and has also suggested some solutions.
05:30They have clearly written that
05:31by 2030,
05:32every year,
05:33we will have to create 78.5 lakh jobs.
05:36On page number 158,
05:38they have admitted in this report
05:40that 1 out of 2 Indian graduates
05:42are unemployable
05:43because people don't have sufficient skills.
05:45According to CMIE data,
05:47the unemployment rate in the age group of 20-24
05:50has reached 44.49% in early 2024.
05:54This report also talks about Artificial Intelligence.
05:57It has been seen that
05:58due to Artificial Intelligence,
05:59a lot of uncertainty is created.
06:01At every skill level,
06:02whether it is a low-skill level worker
06:04or a high-skill level worker,
06:06all of them face uncertainty
06:08due to the advent of Artificial Intelligence.
06:10They have clearly written that
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07:23Coming back to the topic,
07:24if you don't want to invest money in the market,
07:26then what about things like gold and property?
07:29These things are called Non-Financial Assets.
07:32Whether you have bought land
07:33or a house or an apartment.
07:35The Long-Term Capital Gains Tax on Non-Financial Assets,
07:39if you look at it from the top,
07:41the government has actually reduced it.
07:43Earlier, it used to be 20%.
07:45Now, it is only 12.5%.
07:47If you think, this should be good news.
07:49But along with this,
07:50the government has removed the benefits of Indexation.
07:53Indexation means
07:54that the Capital Gains Tax on the price of your property
07:58will be taken into account for inflation.
08:01That is, 20 years ago,
08:03if you had bought a house worth Rs. 20 lakhs,
08:05and by adjusting with inflation,
08:07the price of that Rs. 20 lakhs
08:09becomes Rs. 60 lakhs today.
08:11Then you will have to pay less tax
08:13because the value of that Rs. 60 lakhs
08:15will be considered as the baseline.
08:16Your profit will be taken out of it.
08:18This is Indexation.
08:19But if Indexation is removed,
08:21then the price of that Rs. 20 lakhs
08:23will still be considered as Rs. 20 lakhs.
08:25That will become the baseline
08:27and you will have to pay tax on that extra amount.
08:30The reason behind why the government is doing this
08:32can be told that
08:33the government does not want speculation in property prices.
08:36Do you remember Manoj Tiwari's interview?
08:43Manoj Tiwari gave an interview during the election
08:45in which he was very happy to say
08:47that after Modi 3.0 comes,
08:49in his constituency,
08:51he will increase the price of every property by 2-3 times.
08:54But this will be wrong.
08:55Why?
08:56Suppose, the people who will come here from Purvanchal,
08:59they will never be able to buy a house.
09:00I am getting a little confused about this.
09:02Now look,
09:03this is beneficial for people like Manoj Tiwari.
09:05The people who have so much money
09:07that they have bought 2-3-4-5 properties.
09:09They sell the property and run their business.
09:11They get profit from there.
09:13But what they didn't think was that
09:15the lower middle class people
09:17who don't have their own properties,
09:18who want to buy a house for themselves,
09:20want to buy a first house,
09:22this is harmful for them.
09:23Because from their perspective,
09:25property prices are going so high
09:27that they can't afford to buy a house.
09:29Here also, when property prices get overvalued in this way,
09:32this is called a real estate bubble.
09:34So the government wants to discourage investment in property.
09:38But for you,
09:39will there be a personal benefit or loss here?
09:41It depends on your personal situation.
09:43Because there are many small rules
09:45that have to be considered.
09:46Like the government has made a rule,
09:48if you have bought your property before the year 2001,
09:51then you will get the benefits of indexation.
09:53But you won't get it after that.
09:54Now, exactly the benefit you are getting
09:56from tax reduction,
09:57from 20% to 12.5%,
09:59and the loss you are getting
10:00from the reduction of the indexation benefit,
10:02from this, overall,
10:03you will get profit or loss,
10:05let's understand this with an example.
10:06Assume that in the year 2004,
10:08you spent Rs 20 lakhs and bought a property.
10:11By adjusting with inflation,
10:13the value of that Rs 20 lakhs today
10:15will be Rs 64.2 lakhs.
10:17How was this calculated?
10:19By deciding the CII value.
10:21CII is the Cost Inflation Index.
10:23Which calculates the annual inflation of asset prices.
10:27Every year, the Income Tax Department
10:29releases the numbers of CII.
10:30And the base year is taken here in the year 2001.
10:33In the year 2004,
10:34when we bought the property,
10:35the CII value of that year was Rs 113.
10:37And this year's CII value is Rs 363.
10:40So, 363 divided by 113 is 3.21.
10:43And we will multiply this number
10:45with the cost of Rs 20 lakhs,
10:47to get the inflation-adjusted value
10:50of our house today.
10:51Now, how much does this house sell for?
10:53According to the studies of the
10:55Centre for Social and Economic Progress,
10:57housing prices in India
10:58have increased by 9.3% from the annual rate.
11:01Between 1991 and 2021.
11:04If we assume this trend,
11:06then the selling price of this house
11:08will be Rs 1.24 crores today.
11:10That is, in 2004, we bought a property worth Rs 20 lakhs.
11:13In 2024, we are selling this property
11:15at a cost of Rs 1.24 crores.
11:17First, let's see from the old system
11:19how much tax we have to pay.
11:20If we consider the indexation in the old system,
11:22then Rs 1.24 crores minus Rs 64.2 lakhs
11:25is Rs 60 lakhs.
11:27And on this, the old long-term capital gains tax
11:29will be imposed of 20%,
11:31which is a tax of Rs 12 lakhs for us.
11:34If we talk about the current system,
11:35the benefits of indexation are gone.
11:37So, we will do Rs 1.24 crores minus Rs 20 lakhs,
11:40which is Rs 1.04 crores.
11:42And on this, the new long-term capital gains tax
11:45will be imposed of 12.5%.
11:47Due to which our overall tax will be Rs 13 lakhs.
11:51So, this is a very realistic example
11:53with realistic prices.
11:54In this specific case, you can see
11:56that there is a loss of Rs 1 lakh
11:59after the arrival of the new system.
12:01Many people have expressed their concern
12:02that because the new system is so harmful,
12:04people will start dealing in cash to save tax,
12:07due to which the circulation of black money
12:09will increase even more.
12:11And the people who have invested in delayed projects
12:13have incurred the most losses.
12:16There are many such housing projects and societies
12:18where people bought apartments
12:20but they didn't get built.
12:21They were delayed for 5-10 years.
12:23And unless the price of those properties
12:24increases drastically,
12:26these people will incur even more losses.
12:29The only benefit of this policy
12:30that the government can expect is
12:32that the speculation in property prices
12:34will be reduced.
12:36Property prices will not increase so rapidly.
12:38And maybe lower middle class people
12:40will get a chance to afford a house.
12:44Then we come to Angel Tax.
12:46The tax that is imposed on startups
12:48whenever they issue their fresh shares
12:51at a higher price than the fair market value of their company.
12:54And the government has proposed
12:56to remove this tax in the new budget.
12:58This is a good decision.
12:59In fact, this is a decision
13:00that the opposition parties have also praised.
13:02Congress leaders say that
13:04this demand of theirs has been there for a long time.
13:06And in fact, this thing was also written
13:08in their own manifesto.
13:10Then on income tax,
13:11some minor changes have been made
13:13which will be beneficial for middle class people
13:15on a small scale.
13:17For example, the standard deduction has been increased
13:19from Rs. 50,000 to Rs. 75,000.
13:22Slabs have also changed a little.
13:23Earlier, an income tax of 5%
13:25was imposed on an income of Rs. 3-6 lakhs.
13:28Now, an income tax of 5%
13:30will be imposed on an income of Rs. 3-7 lakhs.
13:32Similarly, the slab of 10% tax rate
13:34was earlier in the range of Rs. 6-9 lakhs.
13:36Now, it is in the range of Rs. 7-10 lakhs.
13:38Earlier, an income tax of 5%
13:40was in the range of Rs. 9-12 lakhs.
13:42Now, it is in the range of Rs. 10-12 lakhs.
13:44Rest, there has been no change in the tax rates.
13:46Exactly, how much benefit will be there for you
13:48depends on how many deductions you are getting.
13:50Section 80D, 80TTA, 80TTB.
13:54Exactly, what is your annual income?
13:56But roughly speaking,
13:58it is a negligible benefit
14:00for a middle class person.
14:02If you compare it with the previous governments,
14:04then this is an interesting chart
14:06made by the Government of India.
14:08Between 2006 and 2012,
14:10how many times the slab of 0% and 30%
14:12was increased for the benefit
14:14of middle class people.
14:16But these slabs have not changed
14:18for the past 12 years.
14:20A similar thing can be said for the capital gains tax.
14:22Do you know that in 2004,
14:24when Manmohan Singh's government was formed,
14:26the long-term capital gains tax
14:28was at 0%.
14:30Only in 2018,
14:32the new Modi government brought back this tax.
14:34Which has now been increased
14:36to 12.5%.
14:38This is another big issue on which the government
14:40is criticized. Because in one year,
14:42if your salary is more than Rs. 15 lakh,
14:44then the maximum tax rate applied on you
14:46is 30%. But on the other hand,
14:48if someone else's salary is more than Rs. 1 crore,
14:50then the same 30% tax rate is applied on him.
14:52But in reality,
14:54one person is a millionaire and the other
14:56is a middle to upper middle class.
14:58We have seen many times
15:00that people and opposition parties
15:02are calling the Modi government
15:04as the government of Adani Ambani.
15:06This is the reason behind it.
15:08Looking at it, it seems that the government
15:10collects all the taxes from the middle class.
15:12And the millionaires and billionaires
15:14are only given benefits.
15:16This is another data point.
15:18In the budget documents, we see
15:20that the government is earning
15:2219% from the income tax.
15:2418% from GST
15:26and only 17% from the corporate tax.
15:28Now look at this graph.
15:30This never used to happen.
15:32Before 2014-15,
15:34the majority share of the government
15:36used to come from the corporate tax.
15:38That is, the tax imposed on the companies.
15:40Gradually, the government
15:42has reduced the corporate tax over the years.
15:44And most of its tax revenue
15:46has been collected from the income tax payers.
15:48The Finance Minister talked about
15:505 schemes for which Rs. 2 lakh crore
15:52has been allocated.
15:54First is First Time Employment Support.
15:56Those who are going to do their first job
15:58and those who are registered in the government's EPFO
16:00can get up to Rs. 15,000
16:02from the government.
16:04Secondly, in the manufacturing sector,
16:06specifically, more benefits have been given to
16:08employees and employers.
16:10Thirdly, Employer Support has been provided
16:12so that more employers can be encouraged
16:14to hire more employees.
16:16The government will contribute up to Rs. 3,000 per month
16:18for 2 years in the EPFO
16:20on behalf of the employers.
16:22Fourthly, the government has said that
16:24a skilling scheme will be launched
16:26in the next 5 years.
16:28Fifthly, the government has said
16:30that it will provide internship opportunities
16:32for 1 crore youth
16:34in the top 500 companies
16:36for 12 months.
16:38This point is interesting because
16:40the same thing was written in the Congress manifesto.
16:42To provide internship opportunities
16:44in the top companies.
16:46This is something that both the parties
16:48are favouring and is a good step.
16:50It remains to be seen
16:52how much implementation of this scheme is done.
16:54You can already see the statement
16:56of the Finance Minister on 24th July
16:58that this job scheme
17:00will not be compulsory for companies
17:02but will be a nudge for them.
17:04So how many companies will actually implement it?
17:06This is a very big question.
17:08Apart from this, how much is the government spending
17:10in the sectors like roadways, railways,
17:12education and healthcare?
17:14I talked about this in the last video
17:16when the government announced the interim budget
17:18in February.
17:20You can watch that video.
17:22Another thing that is being criticized a lot
17:24is the distribution of money
17:26in different states.
17:28In this budget, the government has allocated
17:30a lot of money to the states of Andhra Pradesh
17:32and Bihar
17:34compared to other states.
17:3615,000 crores have been allocated
17:38for the development of Andhra Pradesh's capital, Amravati.
17:40There have already been elections in Andhra Pradesh
17:42but the elections in Bihar are yet to come.
17:44So the money given to Bihar
17:46is of the next level.
17:48The government will spend 60,000 crores
17:50in different infrastructure projects in Bihar.
17:52Expressways, power plants,
17:54heritage corridors, new airports
17:56and 11,500 crores
17:58are being given to the state
18:00for flood mitigation.
18:02Apart from this, the biggest share of the tourism budget
18:04is being given to Bihar.
18:06In Vishnupad Mandir Gaya
18:08and Mahabodhi Mandir Bodh Gaya,
18:10they will be given world-class facilities
18:12and tourism infrastructure,
18:14said the Finance Minister.
18:16It is very clear that BJP has given
18:18a lot of money to the two states
18:20to keep its allies, TDP and JDO
18:22happy.
18:24This is why the leader of the opposition,
18:26Rahul Gandhi, called this budget
18:28the Kursi Bachao Budget.
18:30Once upon a time, the BJP government
18:32favoured the states of Gujarat and Uttar Pradesh
18:34in the same way.
18:36The rest of the states were ignored.
18:38But now the focus has shifted to Andhra Pradesh
18:40and Bihar.
18:42There are many memes on this topic
18:44which you can see on the screen.
18:46In this section, I would like to show you
18:48the chart of the country's increasing
18:50income inequality.
18:52You can see that over the years,
18:54the rich have become richer
18:56and the poor have become poorer.
18:58In the last 10 years, in fact,
19:00in the last 20 years,
19:02this situation has only gotten worse.
19:04The share of the top 10% people
19:06has increased in the country's income
19:08and the share of the middle class
19:10has fallen.
19:12To address this issue, it is necessary
19:14that small businesses should be promoted
19:16instead of big corporate companies.
19:18Tax should be increased
19:20on their Arab husbands
19:22instead of middle class people.
19:24I don't understand what will happen
19:26if the government collects a little more
19:28from its Arab husbands.
19:30They will be able to spend
19:32100-200 crores less in their
19:345000 crore weddings.
19:36They will get 1-2 airports less in the country
19:38and will be able to save 2-3 jungles.
19:40What will happen to them?
19:42Even during the British rule,
19:44this was not the case.
19:46Only time will tell
19:48how the new policies of the government
19:50make things better and worse.
19:52If you liked the video,
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19:58If you want to know more about
20:00Artificial Intelligence,
20:02you can click here and watch this video.
20:04Thank you very much.