{"@context":"https:\/\/schema.org\/","@type":"BlogPosting","@id":"https:\/\/www.indusind.com\/iblogs\/fixed-deposit\/budget-2024-learn-changes-in-capital-gains-tax-and-its-implications\/#BlogPosting","mainEntityOfPage":"https:\/\/www.indusind.com\/iblogs\/fixed-deposit\/budget-2024-learn-changes-in-capital-gains-tax-and-its-implications\/","headline":"Budget 2024: Learn Changes in Capital Gains Tax and its Implications","name":"Budget 2024: Learn Changes in Capital Gains Tax and its Implications","description":"Budget 2024, presented by Finance Minister Nirmala Sitharaman, introduces significant revisions to the capital gains tax structure. Capital gains, which refer to any profit or gain arising from the sale of a ‘capital asset,’ play a crucial role in an investor’s financial planning. The tax adjustments proposed in Budget 2024 could have far-reaching implications for...","datePublished":"2024-07-31","dateModified":"2024-07-31","author":{"@type":"Person","@id":"https:\/\/www.indusind.com\/iblogs\/author\/vinayak\/#Person","name":"Vinayak","url":"https:\/\/www.indusind.com\/iblogs\/author\/vinayak\/","image":{"@type":"ImageObject","@id":"https:\/\/secure.gravatar.com\/avatar\/83880c90630f0d98ec7d461acb74bdf6?s=96&d=mm&r=g","url":"https:\/\/secure.gravatar.com\/avatar\/83880c90630f0d98ec7d461acb74bdf6?s=96&d=mm&r=g","height":96,"width":96}},"publisher":{"@type":"Organization","name":"IndusInd","logo":{"@type":"ImageObject","@id":"https:\/\/www.indusind.com\/iblogs\/wp-content\/uploads\/logo-2.png","url":"https:\/\/www.indusind.com\/iblogs\/wp-content\/uploads\/logo-2.png","width":201,"height":86}},"image":{"@type":"ImageObject","@id":"https:\/\/www.indusind.com\/iblogs\/wp-content\/uploads\/Budget-2024-Learn-Changes-in-Capital-Gains-Tax-and-Its-Implications-min.jpg","url":"https:\/\/www.indusind.com\/iblogs\/wp-content\/uploads\/Budget-2024-Learn-Changes-in-Capital-Gains-Tax-and-Its-Implications-min.jpg","height":288,"width":764},"url":"https:\/\/www.indusind.com\/iblogs\/fixed-deposit\/budget-2024-learn-changes-in-capital-gains-tax-and-its-implications\/","about":["Fixed Deposit"],"wordCount":1288,"keywords":["fixed deposit"],"articleBody":"Budget 2024, presented by Finance Minister Nirmala Sitharaman, introduces significant revisions to the capital gains tax structure. Capital gains, which refer to any profit or gain arising from the sale of a ‘capital asset,’ play a crucial role in an investor’s financial planning. The tax adjustments proposed in Budget 2024 could have far-reaching implications for investors across various asset classes. Here’s an in-depth look at the new capital gains tax policies, their implications, and the options available to you as an investor.Budget 2024 | Key Capital Gains Tax Changes ExplainedA Uniform Long-Term Capital Gains Tax RateOne of the most notable changes is the introduction of a uniform Long-Term Capital Gains (LTCGs) tax rate for all financial and non-financial assets. Before Budget 2024, LTCGs on listed shares were taxed at 10%, while other assets like real estate were taxed at 20% (with indexation benefit).Now, a 12.5% rate will be applied universally, and the indexation benefit for real estate will no longer be available.Short-Term Capital Gains Tax HikeBudget 2024 also increases the Short-Term Capital Gains (STCGs) tax rate on the sale of listed equity shares and equity-oriented mutual funds from 15% to 20%.Adjustments in Holding PeriodsUnlisted financial and non-financial assets now require a 24-month holding period to be considered long-term. Listed assets must be held for 12 months to qualify as long-term capital gains. This will apply to:Listed stocksListed bondsEquity ETFsGold ETFsBond ETFsReal estate investment trusts (REITs)Infrastructure investment trusts (InvITs)Share Buyback TaxationAnother important update is the treatment of share buybacks as dividends. Now, the entire buyback proceeds will be taxed as dividends in the hands of shareholders. The cost incurred by the shareholder on shares shall be available as a capital loss for set-off and carry-forward purposes.Implications of New Tax Norms for InvestorsPositive ImpactsSimplification and uniformityThe new uniform rate simplifies the tax structure and creates parity across different asset classes and types of investors. Even though the revised tax norms introduce a 2.5% tax hike for listed equities from 10%, other assets, such as house property and unlisted equity shares, will enjoy a tax cut of 7.5%.Encouragement of long-term investmentsBy increasing the STCG tax rate, the government aims to promote long-term investment horizons. In fact, the government also raised the LTCGs exemption limit from \u20b91 lakh to \u20b91.25 lakh for listed equity and equity-oriented mutual funds.Equal opportunity marketThe uniform tax rate across different asset classes could ensure that listed and unlisted shares, as well as financial and non-financial assets, are treated equally. This change is expected to boost investor confidence and attract more investments into diverse asset classes.Negative ImpactsIncreased tax burden on short-term gainsThe hike in the STCGs tax rate may impact short-term investors and traders. The higher tax burden could discourage investors from frequent trading, which may impact trading volumes and liquidity in the short term.Removal of indexation benefitsWithout indexation benefits, real estate sales might incur a higher tax burden. This would negate much of the benefit provided by the reduced tax rate.Less attractive share buybacksThe new tax structure could lower the success rate of buyback programs. This is because shareholders could be less inclined to participate, given the immediate tax costs they would incur.Want a Low-Risk Investment with Assured Returns and Tax Benefits? Book an FD NowBudget 2024 changes do not impact Fixed Deposit (FDs). Hence, you can confidently invest in FDs, knowing the returns will be taxed as usual and will remain stable despite any stock market fluctuations. Simply apply for a fixed deposit online, deposit an amount, and choose a tenure. At maturity, get back the principal plus the accrued interest.Make sure to consider IndusInd Bank Fixed Deposits to enjoy best-in-class interest rates and exclusive features, such as:Hassle-free instant FD booking from any location, as the process is 100% digitalJust your Aadhaar and PAN card details are neededComplete video KYC and conveniently book an FD with a flexible amountMinimise your tax liabilities by opting for a five-year tax saver fixed depositDecide how you want to receive the interest payouts (monthly, quarterly, half-yearly, annually, etc.)Also Read: Different Types of Fixed DepositsKey TakeawaysBudget 2024 introduces crucial changes to India’s capital gains tax structure, with an aim to simplify and rationalise the tax regime. While these changes bring both opportunities and challenges, a well-thought-out investment strategy focusing on long-term gains and diversified assets can help you navigate the new tax norms effectively.IndusInd Bank Fixed Deposits offer an alternative for those who want a balance of safety, stability, and attractive returns in an evolving tax scenario. With hassle-free online booking, high returns, flexible tenures, and multiple interest payout options, this investment option can be a valuable component of your investment portfolio. Book NOW!Disclaimer: The information provided in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. Hence, you are advised to consult your financial advisor before making any financial decision. IndusInd Bank Limited (IBL) does not influence the views of the author in any way. IBL and the author shall not be responsible for any direct\/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information.Share This:"}