We find out what percentage of our income we pay as tax in the new tax regime. Take, for example, a salaried tax-payer with an income of Rs. 11 Lakhs. After accounting for the standard deduction of Rs. 75,000, the net taxable income is Rs. 10.25 Lakhs. We will not consider any other deductions (like…

In response to our article, Real Estate Taxation Example After Finance Bill 2024 Amendment, a reader asks, “Does the Financial Bill clearly mention that for capital gains taxation at the new 12.5% rate, the cost of acquisition for the property will be the value of the property on April 1, 2001 and not the actual…

A reader says, “I’m 45 and have reached 60:40 Equity: Debt portfolio. I have 15 more years of service and don’t plan to take Early retirement. My target corpus has not yet been reached. I have invested in NIfty 50 and NIfty Next 50 for equity, PPF, NPS, and gilt funds for long-term equity and…

Tax expert Manmohan Sethumadhavan has prepared a downloadable comprehensive capital gains taxation rules ready reckoner for freefincal readers based on the amendments to the Finance Bill 2024. When the budget was presented on 23rd July 2024, it was immediately apparent that the wording obscured the complexity of the changes to capital gains taxation. The following…

Budget 2024 clarified the definition of a specified mutual fund. This definition will be applicable from 1st April 2025. What about the change in taxation rules? When do they come into force? According to Finance Bill 2024 (as passed by the Lok Sabha on 7th Aug 2024), “‘(ii) “Specified Mutual Fund” means,–– (a) a Mutual…

Many readers keep asking variants of this question: How should I design my fixed-income portfolio after Budget 2024? The answer is quite simple. Always follow a simple thumb rule: Saving tax is NOT a priority. Diversifying portfolio risk is THE number one priority. This has to be done regardless of tax rules. So we do…

Taxation on Sales of Real Estate Bought Before April 2001 requires more clarity from the government. Update:  Finance Bil 2024 has been amended. Taxpayers can now choose either 12.5% without indexation or 20% with indexation, whichever is lower for LTCG on property. Are indexation benefits available for selling properties purchased before 1st April 2001? Our…

After the fall in gold prices due to the customs duty cut announced in the 2024 budget, sovereign gold bond investors are shocked, and many have written to us to ask if these investments make sense anymore. There is a lot of speculation as to why the customs duty was cut – “this was done…

Investors seem confused about how gold investments will be taxed after Budget 2024. This is natural since there is still some ambiguity about the holding periods of listed assets like gold ETFs and sovereign gold bonds.  Here is a quick summary. Physical Gold: slab rate (<2Y); 12.5% (>2Y) The tax will be at the applicable…

This article discusses how Balanced Advantage Funds and Dynamic Asset Allocation Funds will be taxed after the 2024 Budget. Dynamic Asset Allocation or Balanced Advantage Fund can invest in equity/ debt that is managed (0% to 100% in equity & equity related instruments; and dynamically 0% to 100% in Debt instruments). So they could be…

This article discusses how multi-asset funds will be taxed after the 2024 Budget. A multi-asset fund should invest in at least three asset classes with a minimum allocation of at least 10% in each asset class. So they could be taxed like equity funds, debt funds or other funds depending on whether they hold 65%…

In this article, we address some more questions readers have asked in response to Budget 2024: FAQ on capital gains taxation. Update:  Finance Bil 2024 has been amended. Taxpayers can now choose either 12.5% without indexation or 20% with indexation, whichever is lower for LTCG on property. Q1: “I understand that if I sold an equity…

Over the last few days, many readers have asked us if the ey should change their return expectations due to the change in capital gains tax announced in budget 2024. The most significant negative changes are: The long-term capital gains for equity investments have increased from 10% to 12.5%. The increase in tax-free limit to…

Budget 2024 has done away with indexation from all capital gains taxation. Two places where this will hurt the most are real estate sales and debt fund investments made before 1st April 2023. The older the investment, the more the impact. Update:  Finance Bil 2024 has been amended. Taxpayers can now choose 12.5% without indexation…

Budget 2024 has revised the real estate taxation rule. Long term capital gains tax has been modified from 20% with indexation to 12.5% without indexation for any sale made on or after 23rd July 2024. Update:  Finance Bil 2024 has been amended. Taxpayers can now choose either 12.5% without indexation or 20% with indexation, whichever…