look news india
Union Budget LTCG, STCG, STT rate hike: In the Union Budget 2024, the long-term capital gains tax on all financial and non-financial assets has been increased from 10 percent to 12.5 percent, on the other hand, short-term capital gains tax on certain assets has been increased to 20 percent. The increase in capital gains tax has led to huge volatility in the stock market. The Sensex fell 750 points to reach the 80000 level, however, the Nifty maintained the 24000 level.
It is worth noting that while the increase in capital gains in the budget has not harmed small investors, the tax burden on large and bulk investors has increased. The purpose behind increasing capital gains is to curb the increasing speculative activities in the stock market. Let us know how small investors will not be affected?
LTCG limit increased to Rs 1.25 lakh
The central government has increased the long-term capital gains tax to 12.5 percent, however, the tax exemption limit has also been increased from Rs. 1 lakh to Rs. 1.25 lakh. So small investors, who book profits of Rs. 1.25 lakh or less on investments held for more than 1 year, will not have to pay any tax.
Investors will save taxes
According to Divya Baweja, partner of Deloitte India, on investment of more than one year, there will be no tax on profit up to Rs. 1.25 lakh. Whereas on total profit of only Rs. 2 lakh, totaling only Rs. 75000. Rs. 9375 (4% cess, without surcharge) will have to be paid as long term capital gain tax. Earlier, Rs. 10400 had to be paid. That means investors get tax of Rs. 1.5 lakh. There will be a saving of Rs. 650.
Hike in short term capital gains tax is a matter of concern
According to the report, most small investors invest with a long-term strategy, while speculators and large investors do intraday or short-term trading. Therefore, the decision to increase short-term capital gains tax on some financial assets to 20 percent is worrying.
