Union Budget 2024 25 Impact on Education Sector

1. Union Budget 2024 Education, skilling and social sector The PM’s package includes key schemes for education, skills and employment, benefiting 41 million youth over the next five years through a budget provision of INR 2,000 billion: • Offering benefits to first-timers: It offers a direct benefit equivalent to one month's salary of up to INR 15,000 to first-time employees with salaries up to INR 100 thousand per month in formal sectors, benefiting 21 million youth. • Creating jobs in manufacturing: It provides incentives in the manufacturing sectors for first- time employees and employers for salaries up to INR 100 thousand for four years, benefiting 3 million youth and their employers. • Supporting employers for additional job creation: It offers PF contribution support of up to INR 3,000 per month in all sectors for salaries up to INR 100 thousand for two years respectively, creating employment for 5 million people. • Enabling women's employment and self- employment: It includes the creation of working women hostels and creches, and provides support for organising self-help groups by women, facilitating market access for them. • Providing internships: It offers 10 million internships over five years in the top 500 companies for a period of 12 months with a stipend of up to INR 5,000 per month. Interns will receive a one-time payout of INR 6,000, where the training cost and 10 percent of the internship cost will be borne by the companies through their CSR funds. • Expanding opportunities for skilling: 1,000 ITIs will be upgraded in a hub-and-spoke model and 2 million youth will be skilled over a period of five years. • Skill and education loans: Skill loans guaranteed by a government fund will be provided to benefit 25,000 students per year and education loans of up to INR 1 million for higher education in domestic institutions through vouchers will be provided, benefiting 100 thousand students. It includes a 3 percent interest subvention for up to three years. 1. Education and skilling are among the nine priorities of the government. Youth are among © 2024 Deloitte Touche Tohmatsu India LLP.

2. the four priorities of the government, along with farmers, women and the poor, with a total outlay of INR 1480 billion for education, employment and skilling. 2. Some other proposals also have a direct impact on education, skilling, entrepreneurship and employment. These include establishing hostels for working women under the PPP mode with anchor industries, implementing DPI applications in education, developing Nalanda University, creating portals that connect youth with job opportunities, integrating the e-Shram portal with other portals and revamping the Shram Suvidha and Samadhan portals. 3. In addition to the above package, other budget provisions that indirectly support the skilling and employment efforts were introduced. These include social justice initiatives and saturation approaches, Eastern region development projects, industrial corridors and nodes, highways and the PM Rural Roads Scheme, support for the tourism sector, new power plants, new capital in Andhra Pradesh, the solar rooftops scheme, flood control projects in several eastern and northern states, Digital India initiatives, GST and BCD reductions in several sectors, including mobile, solar, telecom, marine products, leather, textiles and select metals. 4. Similarly, income tax proposals for domestic cruises and diamonds also contribute to job creation. Further, the abolition of the angel tax aims to promote entrepreneurship. 5. The other eight priorities, including productivity and resilience in agriculture, inclusive human resource development and social justice, manufacturing and services, urban development, energy security, infrastructure innovation and R&D and next-generation reforms also contribute to skilling and job creation. 6. This budget focuses on skilling and employment, which was expected given the current needs and government priorities for the sector. The government has taken a multi-pronged approach that includes supporting and encouraging entrepreneurship, jobs and training. One remarkable characteristic of the budget on skilling and employment is its outcome-focused approach. While there is support for upgrading ITIs, education and skill loans and employment portals, the emphasis is on supporting internships and job opportunities. 7. Engagement with the private sector spans internships, working women’s hostels or creche and PF support, making the corporate sector a partner to the government. © 2024 Deloitte Touche Tohmatsu India LLP.

3. 8. The balance between jobs and entrepreneurship is supported through proposals related to angel tax, income tax and GST and BCD interventions. Direct taxes Withdrawal of Equalisation Levy (EQL) on e-commerce operator (relevant to online education service providers) • EQL of 2 percent on “e-commerce operators” will not apply to e-commerce supplies or services made/ provided/facilitated on or after 1 August 2024. • Consequently, the income tax exemption on income arising from e-commerce supplies or services will continue to apply only up to 31 July 2024. Merger of two charitable trusts/institutions • Merger of two charitable trusts/institutions will not attract tax on accreted income provided: – The other trust/institution has the same/similar objects – The other trust/institution is registered for tax exemption – The merger fulfils such conditions as may be prescribed Rationalising tax exemption provisions for charitable trusts/institutions • Trusts/institutions governed by the Specified Institutions regime are now proposed to be governed by the Charitable Trusts regime in a phased manner. • Under the Charitable Trusts regime, PCIT/CIT is empowered (in reasonable cases) to condone the delay in filing the application for seeking approval to avail the tax exemption. • Rationalisation of timelines for trusts/institutions to seek approval under the Charitable Trusts regime and Section 80G. Indirect taxes • Custom duties exemption on the temporary import of specified pedagogic materials (such as models, instruments, apparatus, machines and accessories and material used for educational or vocational training), spare parts of such materials and tools specifically designed by non-profit-making education or vocational training institutions has been extended from 31 March 2024 to 30 September 2024, subject to conditions. • Custom duties exemption on the import of second- hand computers and computer peripherals, when received as donations by schools run by the government or non-commercial educational institutions will be discontinued from 30 September 2024. © 2024 Deloitte Touche Tohmatsu India LLP.