Table of Contents
Detailed Analysis and Insights
The Budget for the Fiscal Year 2024-25 has been presented by India’s Finance Minister Nirmala Sitharaman on Tuesday morning (23rd July’24). Several changes had been made in the direct taxation with the primary aim of reducing the tax burden. Also there is a special focus on encouraging savings and investments this time. The Budget 2024 reflects the government’s commitment to promoting economic growth and financial stability.
New Income Tax Regime (Budget 2024-25)
| Income Range | Rate of Tax |
| Up to ₹3,00,000 | NIL |
| ₹3,00,001 to ₹7,00,000 | 5% |
| ₹7,00,001 to ₹10,00,000 | 10% |
| ₹10,00,001 to ₹12,00,000 | 15% |
| ₹12,00,001 to ₹15,00,000 | 20% |
| Above ₹15,00,000 | 30% |
Significant changes to direct taxation
- Under the old tax regime, the salaried taxpayers used to get a standard deduction of only ₹50,000, but now this standard deduction has increased to ₹75,000.
- There is an adjustment of 5% tax slab. In FY 2023-24 their was 5% tax in the income range of ₹3,00,001 to ₹6,00,000. However, this time 1 Lakh relaxation has been provided to the middle-income earners.
Below is the detailed comparison between the income ranges in subsequent years and their corresponding taxation:
| Income Range | FY 2022-23 | FY 2023-24 | FY 2024-25 |
| Up to ₹2,50,000 | Nil | Nil | Nil |
| ₹2,50,001 to ₹3,00,000 | 5% | Nil | Nil |
| ₹3,00,001 to ₹5,00,000 | 5% | 5% | 5% |
| ₹5,00,001 to ₹6,00,000 | 10% | 5% | 5% |
| ₹6,00,001 to ₹7,00,000 | 10% | 10% | 5% |
| ₹7,00,001 to ₹7,50,000 | 10% | 10% | 10% |
| ₹7,50,001 to ₹9,00,000 | 15% | 10% | 10% |
| ₹9,00,001 to ₹10,00,000 | 15% | 15% | 10% |
| ₹10,00,001 to ₹12,00,000 | 20% | 15% | 15% |
| ₹12,00,001 to ₹12,50,000 | 25% | 20% | 20% |
| ₹12,50,001 to ₹15,00,000 | 25% | 20% | 20% |
| Above ₹15,00,000 | 30% | 30% | 30% |
- Tax deduction in family pension has been increased from ₹15,000 to ₹25,000.
- In the Budget 2024, under the National Pension Scheme (NPS), salaried employees will now receive a deduction of 14%. Previously, this rate was 10%, representing a 4% increase.
- Several changes have been done to Capital Gain tax too, lets understand it briefly.
Capital Gains and Securities Transaction Tax (STT)
Several Adjustments have been done in the period of holding, and the tax rated for capital gain have also been modified.
If we look at the listed and unlisted assets, now both will be taxed at a rate of 12.5% on long term capital gains and the advantage of indexation for long-term assets have also been removed.
The “period of holding” refers to how long an investor holds an asset before selling it. Earlier, there were different tax rates based on the duration of holding:
- Short-term capital gains: Taxed according to the individual’s applicable income tax rate, which was typically higher.
- Long-term capital gains: Taxed at a lower rate, typically after holding the asset for more than one year.
But Now, the period of holding has been adjusted which has affected the tax rates.
Uniform Tax Rate for Long-Term Capital Gains:
- Both listed (e.g., stocks) and unlisted (e.g., real estate) assets are now subject to a uniform long-term capital gains tax rate of 12.5%.
- Earlier, the tax rate for listed assets was 10% (without indexation benefit) and for unlisted assets, it was 20% (with indexation benefit).
- Indexing Benefit used to help the investors to adjust the purchase price for inflation while calculating the capital gain, but now this benefit is removed.
Other Information Highlighted in the budget 2024:
- A sum of 4.5 lakh crore rupees has been allocated to the defence sector in the budget 2024.
- A sum of 15 Thousand crore rupees has been allocated for the restoration of the Andhra Pradesh’s new capital ‘Amravati’.
- The expenditure of 17,553 crores has been allocated to the renewable energy sector in the budget 2024, which has increased 2.5 times from the previous year.
- A sum of 1.5 lakh crore rupees has been allotted to the state governments for the long-term interest-free loans so that the resource allocation can be taken care of.
- For the rural development the government has allotted a sum of 2.66 lakh crore rupees in the budget 2024.
- For the agriculture and allied sector a sum of 1.52 lakh crore has been granted.
- A total sum of 1 Thousand Crore rupees has been granted for venture capital fund for the expansion of the space economy in the budget 2024.
Q1. Budget 2024 date of announcement?
Ans1. The budget 2024 – 2025 was announced on 28th July 2024.
Q2. What Are the Major Budget 2024 Highlights?
Ans2. Below are the highlights from the budget 2024 – 2025:
- Previously, salaried taxpayers received a standard deduction of ₹50,000, but this amount has now been increased to ₹75,000.
- Salaried employees’ NPS deduction has increased from 10% to 14%.
- Both listed and unlisted assets now face a uniform long-term capital gains tax rate of 12.5%, up from 10% for listed assets and 20% for unlisted assets, with the removal of the indexing benefit.
