Union Finance Minister Nirmala Sitharaman has unveiled the Union Budget for the fiscal year 2024-25, detailing the financial roadmap and allocations for the current year, while nudging up the Capital Gains
This marks the first full budget from the Modi 3.0 government and the seventh consecutive budget presented by the finance minister.
Long-Term Capital Gains Tax Increased to 12.5%
In a significant update, the Union Budget for the financial year 2024-25 has announced a hike in the long-term capital gains tax (LTCG) on all financial and non-financial assets, raising the rate from 10% to 12.5%. This change aims to streamline the taxation process and increase revenue.
Short-Term Capital Gains Tax Adjustments
The budget has also revised the short-term capital gains tax (STCG) on certain assets, setting the new rate at 20%. This adjustment reflects the government’s strategy to balance short-term investments with long-term financial stability.
Another noteworthy change is the increase in the exemption limit for long-term capital gains tax, which has been raised from Rs 1 lakh to Rs 1.25 lakh. This move is expected to provide relief to small investors and encourage long-term investment.
The budget also clarified that listed financial assets held for more than a year will now be classified as long-term. This reclassification is intended to simplify the tax treatment of these assets and encourage longer holding periods while unlisted financial assets and all non-financial assets must be held for at least two years.
The Union Budget 2024-25 introduces several key changes to the capital gains tax structure, aimed at increasing tax revenues and encouraging long-term investment. Taxpayers and investors are advised to review these changes and adjust their financial strategies accordingly.
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