Direct Tax Proposals of Budget 2024

Direct Tax Proposals of Budget 2024

Income Tax Proposals of Budget 2024

Anisha Kumari | Jul 23, 2024 |

Direct Tax Proposals of Budget 2024

Direct Tax Proposals of Budget 2024

This article explores new direct tax proposals. The aim is making tax rules easier. Encouraging business growth. Offering tax relief to people.

Rationalisation of Capital Gains

The government plans to change how capital gains are taxed. Here are key points:

1. Short-Term Gains: If you sell financial assets like stocks within short period you’ll pay 20% tax on profits.

2. Long-Term Gains: For assets held longer, both financial and non-financial like property. The tax rate will be 12.5%.

3. Exemption Limit: The limit for tax-free capital gains on financial assets will increase to 1.25 lakh rupees per year. This means you won’t pay taxes on gains up to this amount.

Employment and Investment

To boost job creation and investment several changes are proposed:

1. Angel Tax Abolished: Angel Tax, which applied to investments in startups will be removed for all types of investors. This will make it easier for startups to attract funding.

2. Simpler Tax for Domestic Cruises: Tax rules will be simplified to help domestic cruise businesses grow.

3. Safe Harbour Rates: Foreign mining companies selling raw diamonds will get clear. Predefined tax rates, making it easier for them to operate in India.

4. Corporate Tax for Foreign Companies: Corporate tax rate for foreign companies will be reduced from 40% to 35%. Encouraging more foreign investment.

Simplifying New Tax Regime

The new tax regime is designed to be simpler than the old one. Under old system there were many deductions and exemptions. This made filing taxes complicated. New regime offers lower tax rates but removes most of these deductions. It makes it easier for people to calculate their taxes. It also reduces chances of mistakes. Government is considering making this new regime default option, so more people can benefit from its simplicity.

The new tax regime will be further simplified to provide more benefits.

1. Standard Deduction for Salaried Employees: This will increase from 50000 to 75,000 rupees It means employees can reduce their taxable income by this amount. It lowers their tax bills.

2. Family Pension Deduction: Pensioners receiving family pension will see their deduction increase from 15000 to 25,000 rupees providing them with more tax relief.

In conclusion these direct tax proposals aim to make tax compliance easier, support entrepreneurship and offer significant tax relief to citizens.

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