Budget 2024: How FM Sitharaman's tax changes will impact your finances

Finance Minister Nirmala Sitharaman's Budget 2024 brings a mix of tax reliefs and hikes with key changes including income tax slab restructuring and revised capital gains tax rates

The highly anticipated full Budget 2024 has been released. Finance Minister Nirmala Sitharaman introduced several reforms in her Budget speech, addressing changes in tax structure, employment generation, and welfare initiatives.

The middle class, hoping for some relief in this year’s Budget, had mixed reactions to the tax adjustments announced by Sitharaman. Although the angel tax was eliminated, the restructuring of the income tax slabs in the new tax regime led to some dissatisfaction.

Here is an overview of what was removed and what was added to this Budget for the common people:

What was removed?

>House rental income can no longer be declared as business income for tax savings.

>Securities Transaction Tax (STT) on Futures and Options (F&O) increased to 0.02 per cent and 0.1 per cent.

>Short-Term Capital Gains tax rate raised from 15 per cent to 20 per cent, marking a 5 per cent increase.

>Indexation benefit on the sale of property, gold, and certain other assets has been eliminated.

What are the positives?

- Simplified holding period criteria to determine short-term or long-term capital gains for tax purposes.

- Long-term capital gains (LTCG) tax rate reduced from 20 per cent to 12.5 per cent, a 7.5 per cent decrease.

- Tax Collected at Source (TCS) paid on foreign remittances and travel can be used to lower Tax Deducted at Source (TDS) on salaries.

- A 6 per cent reduction in customs duty makes gold and silver purchases cheaper.

- Deduction on employer’s contribution to the National Pension Scheme (NPS) increased from 10 per cent to 14 per cent, aligning with government employees in the New Tax Regime (NTR).

- Exemption on capital gains from long-term equity increased to Rs 1.25 lakh, a rise of Rs 25,000.

- An NPS scheme for minors has been announced.

- The time limit for reassessing old income tax returns has been reduced.

- The standard deduction limit for salaried individuals and pensioners increased to Rs 75,000, an increase of Rs 25,000 in the NTR.

- The standard deduction limit for family pensioners was raised to Rs 25,000, an increase of Rs 15,000 in the NTR.