Indian 🇮🇳🇮🇳 Budget 2024 in nutshell - Part 1

On 23rd July, Finance Minister Nirmala Sitharaman presented Budget 2024.

And the negative reaction of the public for this budget was at a different level.

Comedian Abhijit Ganguly's tweet went viral,

"If I earn money, Nirmala taxes it."

"If I spend money, then also Nirmala taxes it."

"If I don't earn or spend both and my money is just lying in investment, Nirmala taxes that too!"

"And the best part is, if I pay tax, there is an additional cess on it, so Nirmala taxes the tax amount."

Whatever salary you get, you pay 30% direct tax on it.

If you invest the remaining amount, and start earning returns in the short term, you pay 20% tax on it.

If you earn slowly, you pay 12.5% as tax but if you incur any losses, that's completely on you.

On the other hand, if you decide to spend your money, then under the GST Laws, you pay 12% as tax on basic items, 18% tax on kind of fancy items, and up to 28% tax on luxury items.

Let's start with the most criticised part.

Capital Gains tax

This tax is levied when you sell your asset, like a house or land, or when you make a profit from your investment.

Like when you invest in the stock market or mutual funds. Capital gains tax is divided into two parts.

If you are buying or selling specified assets within one year, then it is known as "Short Term" and the tax that is imposed on such transactions, it is called Short Term Capital Gains tax.

In short, it is called STCG.

But if you hold your investments for more than a year, it is known as a "Long Term" period and in such cases, the tax imposed is known as Long Term Capital Gains tax.

Or LTCG.

In this new budget, the government has increased both these taxes.

The Short-Term Capital Gains tax has been increased by 5%. Earlier it was 15%. Now it has been increased to 20%.

And the Long-Term Capital Gains tax has been increased by 2.5%.

Earlier it was 10% and now it is 12.5%.

But in this case, the government has increased the exemption too.

Earlier, there was an exemption of ₹100,000, now the exemption is ₹125,000.

Meaning, if within the year, your profit is less than 125,000, then you won't have to pay this tax.