Understanding the Budget 2024: Key Tax Changes for Earners
As an earning member of your family with a stable income, you're likely glued to your chair in front of the television, decoding the details of the Budget 2024.
To ease your concerns, we've broken down two critical aspects of the budget that you should pay close attention to: income tax slab rates and capital gains tax rates.
Let's delve into the intricacies of these tax structures and understand how they might impact your financial situation.
The Basics: The Indian Income Tax Slabs
In India, the government has established a tax slab system that categorizes individuals based on their income levels. Different tax rates apply to different income brackets, with higher income earners paying higher rates on their earnings. These slabs are revised periodically to ensure a fair and transparent tax system.
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Income Tax Slab Rates for FY2024-25
- Up to Rs 3,00,000: Nil
- Rs 3,00,001 - 6,00,000: 5% above Rs 3,00,000
- Rs 6,00,001 - 9,00,000: Rs 15,000 + 10% above Rs 6,00,000
- Rs 9,00,001 - 12,00,000: Rs 45,000 + 15% above Rs 9,00,000
- Rs 12,00,001 - 15,00,000: Rs 90,000 + 20% above Rs 12,00,000
- Above Rs 15,00,000: Rs 1,50,000 + 30% above Rs 15,00,000
Capital Gains Taxation
Capital gains tax is levied on the profit made from the sale of a capital asset. The tax treatment of these gains depends on the duration for which the asset was held, categorized as short-term or long-term.
Short-term Capital Gains (STCG)
Assets held for less than a specified period (typically one year) fall under short-term capital gains. These gains are taxed at the individual's income tax slab rate. For example:
- Listed equity shares are considered short-term if held for less than 12 months.
- Immovable assets (land and buildings) are considered short-term if held for less than 24 months.
Long-term Capital Gains (LTCG)
Assets held for more than a specified period (usually more than a year) fall under long-term capital gains. Different assets have different tenures for classification as long-term. For example:
- Equity mutual funds are considered long-term if held for more than 12 months.
Capital Gains Tax Rates
Stocks:
- Long-term: 10% of gain
- Short-term: 15% of gain
Equity-oriented mutual funds:
- Long-term: 10% of gain
- Short-term: 15% of gain
Other mutual funds:
. Long-term: 20% with inflation indexation
- Short-term: Taxed based on income tax slab
Immovable property:
- Long-term: 20% with inflation indexation
- Short-term: Taxed based on income tax slab
Movable property:
- Long-term: 20% with inflation indexation
- Short-term: Taxed based on income tax slab
Winding Up
Understanding the nuances of tax laws can be daunting, but staying informed about the latest changes can help you make better financial decisions.
The Budget 2024 introduced favorable changes for salaried individuals and maintained the LTCG structure for key asset classes.
However, the complexities of tax filing can still be challenging.
At Divadhik, we are here to assist you. Our team of well-trained tax professionals can help you understand your tax slab, explore potential deductions, and ensure a smooth and hassle-free tax filing experience.
Don’t let tax season stress you out! Contact Divadhik today for a consultation and let us handle the complexities, so you can focus on what matters most.
Visit our website or call us to schedule an appointment. We're here to make your tax filing experience smooth and hassle-free.