What’s changed in the FY 2024-2025 union budget?

Union Budget updates often bring key changes that can impact your finances throughout the year. This year’s budget introduces new tax slabs and additional deductions, including an opportunity for taxpayers to save up to ₹17,500.

Understanding these changes will empower you to make informed decisions about your savings and investments.

Let's begin with an example

Meet Ramesh, a 35-year-old marketing professional based in Mumbai. With a gross annual salary of ₹16 lakhs, he’s eager to understand how the recent changes in tax laws and deductions will affect his tax calculations for the upcoming financial year.

These revised figures should accurately reflect the impact of the NPS contribution and other deductions based on a gross salary of ₹16,00,000.

Old Tax Slab

New Tax Slab

Source: Dime Tax Calculator

With the revised tax regime, Ramesh’s total tax liability is calculated to be ₹95,200.

This outcome reflects the updated tax structure and deductions, demonstrating that the new tax slab rates are simpler and result in a lower tax burden compared to the old regime.

Understanding the changes in LTCG and STCG

Long-Term Capital Gains (LTCG): Profits from selling assets such as listed and unlisted financial securities (e.g., stocks, mutual funds) or non-financial assets (e.g., real estate, gold) held for over a year/two year/three year based on the asset class have been changed.‍

Short-Term Capital Gains (STCG): Profits from selling assets, including listed and unlisted financial securities or non-financial assets, within a year are taxed at a higher rate.

Ramesh finds out how the new tax rules affect his long-term and short-term capital gains!

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Listed Assets

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Unlisted Assets

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Latest amendment on LTCG for properties

Taxpayers with properties purchased before July 23, 2024, have the choice to select the option that results in a lower tax liability. For properties acquired on or after this date, the new rules will apply without any choice.

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‍Angel Tax Policy

‍The angel tax, previously levied at a rate of 30.90%, has now been abolished following the changes in the budget.

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Changes in Securities Transaction Tax (STT) rates

‍Securities Transaction Tax (STT) is a direct tax applied to the purchase and sale of securities like stocks, mutual funds, and derivatives on Indian stock exchanges.

Impact of recent market changes

Ramesh should consider how recent market changes and new tax rules affect various sectors. This understanding will help him make better investment and spending decisions.

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For example, the recent tax changes have impacted various sectors differently!

This year’s budget brings notable tax changes, impacting deductions, investments, and spending, guiding taxpayers like Ramesh to adjust their financial strategies accordingly.

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Summary

To make your life easier, we have summarised the above Read here. Hope you enjoyed it!