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Union Budget 2024 Tax Updates, Check Latest Tax Slabs

Check the key highlights of the Union Budget 2024-25, including changes to income tax rates, capital gains tax, and TDS, aimed at simplifying tax regulations for individuals and businesses.

Mridula Sharma23 Jul, 2024

In the Union Budget for 2024-25, Finance Minister Nirmala Sitharaman has unveiled a thorough review of the Income Tax Act. The new proposals aim to simplify tax regulations for both individuals and businesses. Sitharaman also announced that the government will introduce a standard operating procedure (SoP) to handle TDS defaults and make it easier to manage and resolve such issues.

To streamline the tax process, several changes have been implemented over recent years. Sitharaman noted that more than two-thirds of taxpayers have chosen the new income tax regime. Additionally, the budget proposes increasing the long-term capital gains tax from 10% to 12.5%. Furthermore, Sitharaman revealed plans to develop Digital Public Infrastructure (DPI) apps for various sectors, including credit, e-commerce, education, health, law, MSME services, and urban governance. The budget also includes an increase in the standard deduction to ₹75,000 under the new tax regime.

Union Budget 2024-25

On July 23, Union Finance Minister Nirmala Sitharaman presented her seventh consecutive budget, marking the first budget of the BJP-led NDA government since its re-election in June. Ms. Sitharaman highlighted that this budget will prioritize employment, skill development, MSMEs, and the middle class. A substantial allocation of ₹1.48 lakh crore has been set aside for education, employment, and skill development. The Finance Minister outlined nine key priorities for the budget:

Boosting productivity and resilience in agriculture
Enhancing employment opportunities and skill development
Promoting inclusive human resource development and social justice
Advancing manufacturing and services sectors
Supporting the growth of MSMEs
Improving urban development
Ensuring energy security
Upgrading infrastructure
Encouraging innovation, research, and development

Union Budget 2024 Tax Update

Finance Minister Nirmala Sitharaman presented the first budget since the recent Lok Sabha Elections. The Union Budget 2024 introduces several changes in taxation policies. These changes include income tax relief for certain groups to encourage spending, adjustments to the capital gains tax rate, and modifications to the holding period for different assets. The following are the highlights of the tax changes in Union Budget 2024:

Personal Income Tax

To stimulate spending, the government has adjusted income tax rates for certain individuals. The annual income range of ₹3 lakh to ₹7 lakh will now be taxed at 5%, up from the previous upper limit of ₹6 lakh, as announced by Finance Minister Nirmala Sitharaman. Additionally, the tax system introduced in 2020 has been revised. Now, annual incomes up to ₹15 lakh will be taxed between 5% and 20%, while incomes exceeding ₹15 lakh will remain at a 30% tax rate. The standard deduction for salaried employees has also been increased from ₹50,000 to ₹75,000. Moreover, deductions for family pension contributions and non-government employees' contributions to the new pension scheme have been enhanced.

Capital Gains Tax

The government has raised the tax rate for equity investments held for less than a year from 15% to 20%, and for those held for over a year, the rate has increased from 10% to 12.5%. Short-term capital gains tax (STCG) on listed equity, equity-oriented mutual funds, and business trust units has risen from 15% to 20%, while long-term capital gains tax (LTCG) on these securities is set to increase from 10% to 12.5%. Long-term capital gains up to ₹1.25 lakh annually will now be tax-exempt, up from the previous ₹1 lakh. For listed bonds and debentures, the LTCG rate is reduced from 20% to 12.5%, with the STCG rate remaining the same. For unlisted bonds and debentures, LTCG will now be taxed at applicable slab rates instead of a flat 20%. The STCG rate remains unchanged. For other assets like property and gold, the LTCG rate will be 12.5% without indexation benefits, down from the existing 20% with indexation.

Securities Transaction Tax (STT)

To deter retail investors from risky investments, the government has proposed an increase in the securities transaction tax (STT) on futures and options trades. The STT on the sale of an option in securities will rise from 0.0625% to 0.1% of the option premium, and the STT on the sale of futures in securities will increase from 0.0125% to 0.02% of the traded price.

TDS Rate on E-Commerce Operators

The tax deducted at source (TDS) structure has undergone several changes. The rate for e-commerce operators has been reduced from 1% to 0.1%, and TCS credit will now be allowed against TDS deducted on salaries. The Finance Bill aims to simplify the tax regime for charities, TDS rate structure, reassessment provisions, search provisions, and capital gains taxation.

Angel Tax

To strengthen the Indian startup ecosystem, the government will abolish the angel tax for all classes of investors in startups. This move aims to boost entrepreneurial spirit and support innovation.

Corporate Tax

To attract foreign investments, the corporate tax rate for foreign companies has been reduced from 40% to 35%. This reduction applies to income of foreign companies that are not chargeable at special rates. By simplifying and adjusting these tax structures, the Union Budget 2024 aims to stimulate economic growth, attract foreign investment, and support innovation within the country.

Also Check: Tips for Efficient Tax Planning

Union Budget 2024 New Tax Regimes

Check the Union Budget 2024 latest tax regime for FY 2024-25 is given in the table below:

Union Budget 2024 New Tax Regimes
Old Income Slab (Rs)	New Income Slab (Rs)	Tax rate (%)
Up to 3 lakh	0-3 lakh	Nil
3-6 lakh	3-7 lakh	5%
6-9 lakh	7-10 lakh	10%
9-12 lakh	10-12 lakh	15%
12-15 lakh	12-15 lakh	20%
Above 15 lakh	Above 15 lakh	30%

Who Will Benefit From Union Budget 2024 Revised Tax Slabs?

The new tax slabs will benefit individuals with annual incomes up to Rs 7 lakh, reducing their tax rate from 10% to 5%. Additionally, those earning up to Rs 10 lakh annually will gain from the revised slabs. Sitharaman pointed out that the higher standard deduction will save salaried taxpayers up to Rs 17,500 each year. The deduction for family pensions will increase from Rs 15,000 to Rs 25,000, benefiting around four crore salaried individuals and pensioners. Pradeep Gupta, Co-founder & Vice-chairman of Anand Rathi Group, explained that these changes are designed to boost consumer spending and stimulate the economy by providing selective income tax reliefs. However, taxpayers with incomes between Rs 12 lakh and Rs 15 lakh will still pay a 20% tax rate, and those earning over Rs 15 lakh will continue to be taxed at 30%.

Also Check:

Deferred Taxation

Taxation Of E-Commerce

Best Taxation Online Class For CA Inter

How To Prepare For CA Final International Taxation Elective

Union Budget 2024 Tax Update FAQs

What are the new income tax rates for individuals under the Union Budget 2024-25?

The new rates range from 5% for incomes between ₹3 lakh to ₹7 lakh to 30% for incomes above ₹15 lakh.

How has the long-term capital gains tax been adjusted in the Union Budget 2024-25?

The long-term capital gains tax has been increased from 10% to 12.5% for equity investments held for over a year.

What changes have been made to the Securities Transaction Tax (STT)?

The STT on the sale of an option in securities has increased from 0.0625% to 0.1% of the option premium.

How does the new budget impact the standard deduction for salaried employees?

The standard deduction for salaried employees has been increased from ₹50,000 to ₹75,000 under the new tax regime.

What is the new TDS rate for e-commerce operators?

The TDS rate for e-commerce operators has been reduced from 1% to 0.1%.

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Union Budget 2024-25

Boosting productivity and resilience in agriculture
Enhancing employment opportunities and skill development
Promoting inclusive human resource development and social justice
Advancing manufacturing and services sectors
Supporting the growth of MSMEs
Improving urban development
Ensuring energy security
Upgrading infrastructure
Encouraging innovation, research, and development

Union Budget 2024 Tax Update

Personal Income Tax

Capital Gains Tax

Securities Transaction Tax (STT)

TDS Rate on E-Commerce Operators

Angel Tax

To strengthen the Indian startup ecosystem, the government will abolish the angel tax for all classes of investors in startups. This move aims to boost entrepreneurial spirit and support innovation.

Corporate Tax

Also Check: Tips for Efficient Tax Planning

Union Budget 2024 New Tax Regimes

Check the Union Budget 2024 latest tax regime for FY 2024-25 is given in the table below:

Union Budget 2024 New Tax Regimes
Old Income Slab (Rs)	New Income Slab (Rs)	Tax rate (%)
Up to 3 lakh	0-3 lakh	Nil
3-6 lakh	3-7 lakh	5%
6-9 lakh	7-10 lakh	10%
9-12 lakh	10-12 lakh	15%
12-15 lakh	12-15 lakh	20%
Above 15 lakh	Above 15 lakh	30%

Who Will Benefit From Union Budget 2024 Revised Tax Slabs?

Also Check:

Deferred Taxation

Taxation Of E-Commerce

Best Taxation Online Class For CA Inter

How To Prepare For CA Final International Taxation Elective