The Union Budget 2024, presented by Finance Minister Nirmala Sitharaman, introduces significant changes to India’s tax structure. This article provides a detailed overview of the key taxation updates that will impact individuals, businesses, and investors.
Capital Gains Tax Reforms
Long-Term Capital Gains (LTCG)
- LTCG tax rate increased from 10% to 12.5%
- Exemption limit raised to ₹1.25 lakh per year
- Listed financial assets held for over a year classified as long-term
Short-Term Capital Gains (STCG)
- 20% tax on certain financial assets
- Other assets to attract applicable tax rates
Securities Transaction Tax (STT)
- STT on Futures and Options (F&O) hiked to 0.02% and 0.1% respectively
Corporate Taxation
- Foreign companies’ tax rate reduced to 35%
- Angel Tax abolished for all classes of investors
E-commerce and Digital Economy
- TDS rate on e-commerce operators reduced from 1% to 0.1%
Personal Income Tax Updates
New Tax Regime Revisions
| Income Slab (₹) | Tax Rate |
|---|---|
| 0 – 3 Lakh | 0% |
| 3 – 7 Lakh | 5% |
| 7 – 10 Lakh | 10% |
| 10 – 12 Lakh | 15% |
| 12 – 15 Lakh | 20% |
| Over 15 Lakh | 30% |
Deductions and Exemptions
- Standard deduction increased from ₹50,000 to ₹75,000
- Family pension deduction for pensioners enhanced to ₹25,000
- Potential savings of ₹17,500 for salaried employees
Special Provisions
- Decriminalization for professionals in MNCs investing in movable assets abroad up to ₹20 lakh
- Unlisted bonds and debentures to attract CGT as per applicable rates, regardless of holding period
Key Takeaways
- Increased focus on long-term investments with higher LTCG rates and exemptions
- Simplified tax structure under the new regime
- Relief for salaried employees and pensioners
- Encouragement for foreign investment with reduced corporate tax rates
- Support for the startup ecosystem through Angel Tax abolishment
Conclusion
The Union Budget 2024 brings a mix of tax hikes and relief measures, aiming to balance revenue generation with economic growth stimulation. Taxpayers are advised to reassess their investment strategies and tax planning in light of these changes. As always, consulting with a financial advisor is recommended to optimize your tax position under the new regulations.
