The Union Budget 2024 introduced significant changes to the capital gains tax structure, impacting See this both individual taxpayers and businesses. Capital gains tax is levied on the profit earned from the sale of capital assets, such as real estate, stocks and bonds.
The new budget has brought about critical changes, particularly in the rates and exemptions associated with capital gains. This blog delves into the key updates and their implications for taxpayers.
Overview of Capital Gains Tax
There are two types of capital gains taxation:
Short-Term Capital Gains (STCG):
These are gains from the sale of assets which you hold for a short period, typically less than 24 months for real estate and less than 12 months for stocks and securities.
Long-Term Capital Gains (LTCG):
These are gains from the sale of assets if you hold these for longer periods. For most assets, the holding period is more than 24 months, but for stocks and securities, it is more than 12 months.
Key Changes in the Union Budget 2024
The Union Budget 2024 introduced several important changes to capital gains tax, which are summarised below:
Hike in Short-Term Capital Gains Tax Rate for Equity Investments
One of the most notable changes in the 2024 budget is the increase in the short-term capital gains tax rate on equity investments. Previously, STCG from listed equity shares and equity-oriented mutual funds had a concessional tax rate of 15%. However, the new budget has raised this rate to 20%, effective from July 23, 2024.
Introduction of a New Holding Period for Real Estate
The 2024 budget has also introduced a revision to the holding period for classifying real estate gains as long-term. Previously, long-term real estate gains were applicable if you were in possession of the property for more than 36 months. However, the new budget has reduced this holding period to 24 months.
Site Title 