Budget Day in India is highly anticipated, with businesses and the public keen to see the new schemes and initiatives. This year, due to elections, Budget 2024 was announced later than usual, on February 1. The Finance Minister presented the Final Budget on July 23, 2024, emphasizing employment, skilling, MSMEs, and the middle class. The budget’s main priorities are:<\/p>\n\n\n\n
Income Tax Slabs under the new regime for FY 2024-25 are as below:<\/p>\n\n\n\n Under the new tax regime, the standard deduction for salaried individuals has been raised to \u20b975,000 from \u20b950,000. Additionally, the deduction for family pension has been increased to \u20b925,000 from \u20b915,000 for those with pension income. As a result of the above changes, a salaried employee in the new tax regime can save up to Rs. 17,500 in taxes.<\/p>\n\n\n\n For classifying assets as long-term or short-term, the new rules set holding periods at 12 months and 24 months, removing the previous 36-month period.<\/p>\n\n\n\n Tax Changes:<\/p>\n\n\n\n Budget 2024 has lowered TDS rates on certain payments to help businesses and improve taxpayer compliance. However, these new TDS rates will only apply from either October 1, 2024, or April 1, 2025. The table below lists the specified payments affected.<\/p>\n\n\n\n The Angel Tax under Section 56(2)(viib) is proposed to be removed. Angel Tax is a tax on companies that issue new shares at a price higher than their Fair Market Value. The excess amount was taxed under Section 56(2)(viii) as Angel Tax. Removing this provision will benefit startups, reducing their compliance costs and time spent on fundraising.<\/p>\n\n\n\n Under Section 80CCD, the deduction limit for an employer’s contribution to a pension scheme has been increased from 10% to 14% of the employee’s salary from the previous year.<\/p>\n\n\n\n STT on futures has been increased from 0.0125% to 0.02%, while STT on options has been increased from 0.0625% to 0.1%. This change will come into effect from 1st<\/sup> October 2024.<\/p>\n\n\n\n Budget 2024 introduces several key changes to simplify taxes and support growth. It includes revised income tax slabs, increased deductions, and updated capital gains tax rates. These updates are designed to make tax planning easier and more advantageous.<\/p>\n\n\n\nIncome slabs<\/strong><\/td> Tax Rate<\/strong><\/td><\/tr> Up to \u20b9 3 lakh<\/td> Nil<\/td><\/tr> \u20b9 3 lakh to \u20b9 7 lakh<\/td> 5%<\/td><\/tr> \u20b9 7 lakh to \u20b9 10 lakh<\/td> 10%<\/td><\/tr> \u20b9 10 lakh to \u20b9 12 lakh<\/td> 15%<\/td><\/tr> \u20b9 12 lakh to \u20b9 15 lakh<\/td> 20%<\/td><\/tr> Above \u20b9 15 lakh<\/td> 30%<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n 1. Simplification of Taxation of Capital Gains<\/h3>\n\n\n\n
2. Changes in TDS Rates<\/h3>\n\n\n\n
TDS Sections<\/td> Current TDS Rate <\/td> Proposed TDS Rate<\/td> Effective from <\/td><\/tr> Section 194D – Payment of insurance commission in case of other than company<\/td> 5%<\/td> 2%<\/td> 1st April 2025<\/td><\/tr> Section 194DA – Payment in respect of life insurance policy<\/td> 5%<\/td> 2%<\/td> 1st Oct 2024<\/td><\/tr> Section 194G – Commission on sale of lottery tickets <\/td> 5%<\/td> 2%<\/td> 1st Oct 2024<\/td><\/tr> Section 194H – Payment of commission or brokerage <\/td> 5%<\/td> 2%<\/td> 1st Oct 2024<\/td><\/tr> Section 194-IB – Payment of Rent by certain individuals or HUF<\/td> 5%<\/td> 2%<\/td> 1st Oct 2024<\/td><\/tr> Section 194M – Payment of certain sums by certain individuals or HUFs <\/td> 5%<\/td> 2%<\/td> 1st Oct 2024<\/td><\/tr> Section 194-O – Payment of certain sum by e-commerce operator to e-commerce participants <\/td> 1%<\/td> 0.10%<\/td> 1st Oct 2024<\/td><\/tr> Section 194F – Payment on account of repurchase of units by mutual funds or UTI <\/td> Proposed to be Omitted <\/td> 1st Oct 2024<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n 3. Abolishment of Angel Tax<\/h3>\n\n\n\n
4. Increased Deduction for Employer’s Pension Contributions<\/h3>\n\n\n\n
5. Securities Transaction Tax (STT) Changes<\/h3>\n\n\n\n
6. Other Direct Tax Updates<\/h3>\n\n\n\n
Conclusion<\/h2>\n\n\n\n