New tax slab rates, capital gains taxation, standard deduction NPS: Effective dates of all Budget 2024 income tax changes
Budget 2024 has proposed several changes concerning income tax. These modifications consist of both significant and minor adjustments. Some examples include alterations to the tax slab rates in the new tax system, an increase in standard deduction, modifications to the capital gains framework, elimination of indexation benefit, adjustments to NPS, and various others.#sr_widget.onDemand p, #stock_pro.onDemand p{font-size: 14px;line-height: 1.28;} .onDemand .live_stock{left:17px;padding:1px 3px 1px 5px;font-size:12px;font-weight:600;line-height:18px;top:9px} #sr_widget.onDemand .sr_desc{margin:0 auto 0;} #sr_widget.onDemand .sr_desc{color: #024d99;margin-top:10px;} #sr_widget.onDemand .crypto .live_stock .lb-icon{8px 6px 5px 3px !important} #sr_widget.crypto.onDemand a.text{border-bottom:1px solid #ccc;padding-bottom:5px;display:block;width:100%} #sr_widget.onDemand .sr_desc .text p, #stock_pro.onDemand .sr_desc .text p{font-size:12px;font-weight:400;}
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One has to keep in mind that these changes will come into effect on various dates. However, the proposed changes will be applicable once the Finance bill is passed in parliament.
Let us take a look at the effective dates of various income tax changes proposed in Budget 2024, as per details available in the Budget memorandum.
Tax slabs for assessment year 2024-25
The finance minister Nirmala Sitharaman in Budget 2024 have made relaxation in the income tax slabs in the new tax regime for current FY 2024-25..budget_widget{background-color:#fceae3;padding:15px;box-sizing:border-box;margin:10px 0;} .budget_widget .head_banner{text-align:center;} .budget_widget .head_banner > a{text-decoration:none;} .budget_widget .head_banner > a:hover{text-decoration:none;} .head_banner img{width:85%;height:auto;} .budget_widget .stories_wrap{margin-top:8px;} .stories_wrap .small_story{width:23%;box-sizing:border-box;margin-right:15px;vertical-align:top;display:inline-block;} .stories_wrap .small_story:last-child{margin-right:0px;} .stories_wrap .small_story img{width:100%;height:auto;border-radius:3px;} .artText a{border:none;color:#000;} .stories_wrap .small_story h4{color:#000;font-family:Montserrat;font-weight:normal;font-size:14px;line-height:20px; height: 80px; overflow: hidden; text-overflow: ellipsis; display: -webkit-box; -webkit-line-clamp: 4; -webkit-box-orient: vertical;} .budget_widget .more_wrap{text-align:right;} .budget_widget .more_wrap > a{color:#ed193b;padding-right:20px;font-size:17px;} .budget_widget .more_wrap > a:before,.budget_widget .more_wrap > a:after{content: ''; border-top: 2px solid #ed193b; display: inline-block; border-left: 2px solid #ed193b; position: relative; transform: rotate(135deg); top: -1px; left: 5px; width: 6px; height: 6px;} .budget_widget .more_wrap > a:before{left:92px;}
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More NewsTotal Income (Rs) Rate Up to 3,00,000= NilFrom 3,00,001 to 6,00,000 =5% From 6,00,001 to 9,00,000 =10%From 9,00,001 to 12,00,000 =15%From 12,00,001 to 15,00,000= 20% Above 15,00,000 =30%.The new tax income tax slabs in the new tax regime will be effective from April 1,2024 once the budget is passed by Parliament and receives Presidential assent.New income tax slabs announced in new tax regime in Budget 2024
Standard Deduction and deduction from family pension
Finance minister has announced a hike in the standard deduction amount in new tax regime hiked to Rs 75000 in Budget 2024. Also, standard deduction limit for family pensioners have been hiked to Rs 25,000 from Rs 15,000.Once the Finance bill is passed in the parliament changes will take effect on April 1st, 2025, and the rates will be applicable from the assessment year 2025–2026 onwards.
Budget 2024: Standard deduction limit hiked from Rs 50,000 in new tax regime; check new limit for current financial year
Taxation of Capital Gains
The finance minister Nirmala Sitharaman has proposed following changes in the capital gains taxation regime in Budget 2024:1. Short term gains on listed equity shall attract a tax rate of 20% from 15% currently, while that on all other financial assets and all non-financial assets shall continue to attract the applicable tax rate.
2. Long term gains on all financial and non-financial assets, on the other hand, will attract a tax rate of 12.5%. The proposed rate hikes the tax rate by 2.5% for listed equity from 10% currently but reduces the tax rate by 7.5% for other assets such as house property, unlisted equity shares etc. The indexation benefit has also been removed on all the assets having long-term capital gains.
3. There is a proposal to increase the limit of exemption of capital gains on listed equity and equity oriented mutual funds to Rs 1.25 lakh per year from Rs 1 lakh currently.
4. Listed financial assets held for more than a year will be classified as long term, while unlisted financial assets and all non-financial assets will have to be held for at least two years to be classified as long-term.
5. Unlisted bonds and debentures, debt mutual funds and market linked debentures, irrespective of holding period, however, will attract tax on capital gains at applicable rates.
Note that these proposals are proposed to be with effect from the 23rd of July, 2024.
Capital gains exemption limit hiked to Rs 1.25 lakh for equity; STCG tax rate hiked to 20%, LTCG tax rate made 12.5% for equity, property, others in Budget 2024
Tax Deducted at Source rates
There are various provisions of Tax Deduction at Source (TDS) with different thresholds and multiple rates between 0.1%, 1%, 2%, 5%, 10%, 20%, 30% and above. To improve ease of doing business and better compliance by taxpayers, the TDS rates are proposed to be reduced. However, no change would occur with respect to sections such as TDS on salary, TDS on virtual digital assets, TDS on winnings from lottery etc/ race horses, payment on transfer of immovable property and payments to non-residents, TDS rates for TDS on contracts etc.
The proposed amendment will take effect from October 1, 2024.
TCS of minor can be claimed by the parent
The minor's TCS credits may be adjusted in accordance with the parent's tax liability, according to the budget. There is a catch, though. This is only possible if the parent has joint custody of the minor's income.The amendment will take effect from the 1st day of January, 2025.
TDS on rent paid
A Hindu undivided family or an individual paying rent above Rs 50,000 for a month or portion of a month is required by section 194-IB to deduct TDS equal to 5% of the rent paid as income tax thereon.It is now proposed on lowering the applicable TDS rate from five percent to two percent.
Budget 2024: Rate of TDS on house rent payment of more than Rs 50,000 per month cut to 2% from 5%
Buy-back of shares
The Finance Minister, Nirmala Sitharaman, said on Tuesday that, as of October 1, buyback of shares will be subject to shareholder-level taxes, much like dividends. This will result in a higher tax burden for investors. Additionally, the shareholder's acquisition costs of these shares will be taken into account when calculating any capital gains or losses.STT
The 2024 budget has increased the securities transaction tax (STT) on Futures & Options (F&O) of securities to 0.02 percent and 0.1 percent respectively and income receipts from share buybacks would be taxed in the hands of beneficiaries.This amendment is proposed to be made effective from October 1, 2024.
Budget 2024: Securities transaction tax (STT) on F&O hiked to 0.02% and 0.1%
Income from letting out of house property
"It is proposed that income from letting out of a house or part of the house by the owner, shall not be charged under the head 'profits and gains of business or profession' and will be chargeable to tax under the head 'income from house property' only," Finance Minister Nirmala Sitharaman in her budget speech.
This amendment will take effect from April 1, 2025 and will, accordingly, apply in relation to assessment year 2025-26 and subsequent assessment years.
Aadhaar Enrolment ID
Budget 2024 has proposed to discontinue the provisions allowing quoting of Aadhaar Enrolment ID in place of Aadhaar number, Aadhaar in ITR, PAN application from this date to plug PAN misuse, duplication.
This amendment will come into effect from the October 1, 2024.
TCS on luxury goods
Purchasing high-end products such as Birkin bags, Gucci handbags, Patek Philippe watches, and so on will draw TCS starting in the following year, as long as the item's price surpasses Rs 10 lakh. The government has suggested, in accordance with the Budget Memorandum, to include high net worth individuals' expenses on luxury items under TCS (Tax collected at source) if the cost of the goods exceeds Rs 10 lakh.The proposed amendment will take effect from January 1, 2025.
TDS on sale of immovable property
If the buyer is paying less than Rs 50 lakh, no tax is being deducted, even if the value of the immovable property and stamp duty value exceeds Rs 50 lakh. This is against the intention of the legislature. The amendments will take effect from the 1st day of October, 2024.
Tax Deduction at source on Floating Rate Savings (Taxable) Bonds
The Floating Rate Savings (Taxable) Bonds (FRSB) 2020 have been established by the government. It is suggested to alter Section 193 of the Act to provide the deduction of tax at source when interest payments exceeding ten thousand rupees are made on ––Tax saving on NPS
NPS contribution limit for employer in private sector raised from 10% to 14% of the employee’s basic salary. For both private and public sector employees the deduction limit has been raised from 10% to 14%.This proposed amendment will come into effect from April 1, 2024.
Budget 2024 allows more tax saving on NPS: Tax exempt contribution to NPS for employees by pvt employers hiked from 10% to 14% of salary
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This story originally appeared on: India Times - Author:Faqs of Insurances
