Budget 2024 Capital Gains Tax Changes: The rules of capital gains tax have been changed in the Union Budget 2024. This change has been made for many reasons. After the change in the rules, people have many questions in their minds. These questions have been answered by the Central Board of Direct Taxes (CBDT) itself. CBDT has answered all the questions through an FAQ.
New Capital Gains Tax Rules: On July 23, Finance Minister Nirmala Sitharaman changed the rules of capital game tax in the Union Budget 2024-25. In this budget, a proposal was presented to change the capital gains tax rate and holding period of many assets along with immovable properties.
Capital gains tax is levied on the profit from any property or asset. After the change in the rules of capital gains tax, many people are very confused about the new rules. In such a situation, to remove their confusion, the Central Board of Direct Taxes (CBDT) issued an FAQ. All the information related to the new rules of capital gains tax has been given in this FAQ.
What are the major changes in tax capital gains?
It was proposed to change the rules to simplify the capital gains tax. The government has paid attention to 5 criteria in their rules.
- The holding tenure has been simplified in the new rules. Now there are only two holding tenures (1 year, 2 years).
- Changes were made to rationalize and make the rates of many assets uniform.
- The rates for calculation have been increased from 12.5 per cent to 20 per cent.
- Changes were also made to bring equality between Indian residents and non-residents.
- No change has been made in the rollover benefit.
When will the new rules be implemented?
The new rules of capital gains tax have come into effect from 23 July 2024. This means that capital gains tax will be levied under the new rules for any transfer after July 23, 2024.
How will the holding tenure be easier?
The holding tenure has also been changed in the budget. Earlier the holding tenure used to be of 3 periods, now it has been made two to make it easier. It has been made one year for listed securities and two years for unlisted securities.
This will benefit the investor, because now the time of 36 months for listed entities like business trusts has been reduced to 12 months. At the same time, the holding of unlisted securities has been reduced from 36 months to 24 months. Let us tell you that there has been no change in the holding period of real estate and unlisted shares. It is 24 months i.e. 2 years as before.
What changes have been made in the rates of paid capital gains tax?
The rates of short-term STT paid listed equity, equity oriented mutual funds and units of business trusts have been changed. They have been increased from 15 per cent to 20 per cent. At the same time, the rate structure of the tenure of long term assets has also been changed. It has been increased from 10 per cent to 12.5 per cent.
The rate of long term capital gain tax has also been changed. It has been reduced from 20 per cent to 12.5 per cent. This decision was taken to simplify the system and calculation of capital gains tax.
What has changed in the exemption limit of long term capital gain tax?
There has also been a change in Long Term Capital Gain Tax (LTCG). In this, the exemption limit of Rs 1 lakh has been increased to Rs 1.25 lakh. The new exemption limit has been implemented for the financial year 2024-25 or subsequent years.
Will the investor get the benefit of roll over benefit?
The investor will continue to get the benefit of rollover benefit. No change has been made in this. The investor can avail the benefit of rollover benefit by fulfilling the conditions.
To avail the rollover benefit, the investor has to invest in a bond under Section 54, Section 54F or Section 54EC. The benefit of rollover will be available only under Section 54, 54B, 54D, 54EC 54F, 54G of the Income Tax Act. Let us tell you that in Section 54EC, rollover benefit of up to Rs 50 lakh is available. The benefit is available under the conditions specified in the remaining sections.
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