Bottom Line published on 11th of August 2024. A monthly newsletter for our clients.
Union Budget July 2024: Investor Impact.
Bottom Line
The Union Budget 2024, presented by the finance minister, introduces key changes that could impact investors. This compilation highlights the major changes on few investment avenues.
Income Tax Slab
No tax up to income of 3 Lakhs per annum. Rest of the slabs remain same as before. Standard deduction for salaried employees increased to 75,000 in the new tax regime. Family pensioners deduction increased to 25,000.
Mutual Funds
Capital gain taxes increased with immediate effect. Short Term Capital Gain increased to 20 per cent (against 15 per cent earlier) and Long-Term Capital Gain increased to 12.5 per cent (against 10 per cent earlier). The exemption limit has now been raised from ₹1 lakh earlier to ₹1.25 lakh. i.e., capital gains up to ₹1.25 lakh. will be exempt from capital gain tax.
Real Estate
LTCG of 12.5% with removal of Indexation benefit from capital gains on sale of property. However, investors can avoid capital gain tax by investing the gains to buy another property within 2 years or construct within 3 years.
NPS
The contribution limit for employers in the private sector, for deduction, has been raised from 10% to 14% of the employee’s basic salary, under the new tax regime, aligning private sector employees with Govt. counterparts
Life Insurance
No changes on tax implications on premium payments, income benefits or maturity benefits from life insurance policies. ULIPs become attractive due to increased capital gain tax on equity investments.
“Save your money. You’re going to need twice as much money in your old age as you think”– Michael Caine