23/07/2024
The Union Budget 2024 has hiked the long-term capital gains tax (LTCG) on all financial and non-financial to 12.5% from the current 10%. On the other hand, short-term capital gains tax (STCG) on some assets also increased to 20%.
Besides, one should also understand that the exemption limit for long-term capital gains tax has been increased to Rs 1.25 lakh from Rs 1 lakh. This means you can potentially save money on capital gains taxes, even though the LTCG tax rate itself has increased slightly to 12.5% (up from 10%).
Under the existing provisions, long-term capital gains (LTCG) were exempt up to Rs 1,00,000, and the tax on an income of Rs 2,00,000 amounted to Rs 10,400 (including a 4% cess, but excluding surcharge). With the new amendment, the exemption limit has been increased from Rs 1,00,000 to Rs 1,25,000. Consequently, the tax on a gain of Rs 2,00,000 now totals Rs 9,375 (including a 4% cess, excluding surcharge). This results in a net savings of Rs 650 for taxpayers," said Divya Baweja, Partner, Deloitte India.
The impact on your taxes will depend on the amount of your capital gains. It's possible you could see some savings despite the rate increase, thanks to the higher exemption limit.
